By Barbara Haney, Ph.D.
Alaska families learned the hard way— twice in recent memory— just how fast grocery shelves can go bare. When the 2018 magnitude 7.1 Southcentral earthquake struck, ports, roads and supply lines shattered. Stores emptied almost overnight. Then COVID-19 hit and national supply chains seized up, sending prices soaring and forcing Alaskans to scramble. Wildfires, volcanic ash clouds, brutal winter storms and flooding have driven the same point home again and again: we import roughly 95 percent of our purchased food.
Stores and distributors keep only 3–7 days of inventory (sometimes stretching to ten) in a fragile “just-in-time” system that depends almost entirely on barges and container ships steaming through the Port of Alaska. This is not a theoretical risk. It is our everyday reality. And it is exactly why I strongly support Senate Bill 200.
SB 200 modernizes Alaska Statute 29.45.060 and our Farm Use Land Assessment Program. It is fiscally responsible, economically smart, and one of the most practical steps we can take right now to strengthen local farms, protect rural communities, and start reducing our dangerous dependence on distant supply lines.
Why Use-Value Assessment Makes Sense
Right now, many working farms get taxed as if they are future subdivisions or strip malls. That is not just unfair; it is economic suicide. It discourages real farming, speeds up the loss of agricultural land, and keeps us locked into importing billions of dollars worth of food every year.
Use-value assessment fixes that. It taxes farmland based on what it actually produces for the dinner table, not on some speculative “highest and best use” that the farmer never intends to pursue.
Peer-reviewed studies, including Nickerson and Lynch (2001), prove these programs work: they slow farmland conversion and help farms stay viable. In Alaska the case is even stronger. We already spend about $1.9 billion a year on imported retail and grocery food alone— closer to $3 billion when you count the full food system. That money leaves our state instead of circulating here. Meanwhile, our local farms punch way above their weight: direct farm-to-consumer sales per farm are thirteen times the national average, and the entire food sector generates more than $5 billion in statewide economic activity.
We can do better. SB 200 gives us the tools.
Common-Sense Reforms That Actually Help Real Farmers
The bill requires annual applications with solid IRS Schedule F proof and a modest $2,500 sales threshold— simple proof that you are really farming. It opens the door wider for new farmers with provisional entry, expands qualifying uses to cover livestock, hay, flowers and conservation practices, and finally brings S-corporation farms into the program.
That last piece matters more than most people realize. S-corps are the normal way serious farms organize. Excluding them created a ridiculous two-tiered system where two identical operations get completely different tax treatment just because of paperwork. SB 200 ends that nonsense. Without these changes, small, new and diversified farms— the ones already operating on thin margins— stay hammered by taxes based on phantom development value. That drives more land out of production and leaves Alaska even more dependent on outside food.
Real Numbers, Real Returns
The current program already delivers $802,773 in annual tax relief to 404 parcels covering 10,753 acres. With SB 200, I project 20–30 percent growth in participation over the next three to five years. That means:
- $160,000 – $240,000 more tax relief for farmers each year
- $320,000 – $480,000 in new direct farm output
- $576,000 – $1.2 million total annual economic boost once multipliers kick in
- 3–8 additional rural jobs (on-farm plus processing)
Even tiny reductions in food imports (just 0.05–0.15 percent) would keep $1.5–$4.5 million circulating in Alaska’s economy every year. The cost-benefit math is overwhelmingly positive: $2 to $3 or more in economic return for every dollar of local tax relief.
Zero State Cost, Built-In Safeguards
SB 200 carries a zero state fiscal note. Cities and boroughs can handle the paperwork within existing budgets. The local tax-base impact is tiny: less than 0.05 percent. And strong recapture rules (back taxes plus interest) prevent anyone from gaming the system. Most of the benefit flows to the Matanuska-Susitna Borough, with solid gains for Kenai and Fairbanks North Star. Anchorage keeps its opt-out. Everyone else sees little or no direct effect.
This Is Smart, Targeted Economic Development
SB 200 is not a handout. It is a practical correction that rewards productive land use, keeps more dollars and jobs in Alaska, and builds real resilience against the next earthquake, pandemic or supply-chain meltdown. The payoff, which will continue compounding for decades, is more local food on Alaska tables, stronger rural economies, and greater peace of mind for every family.
The Legislature should pass SB 200 without delay or dilution.
Public Testimony Hearing Tomorrow
The Senate Community and Regional Affairs Committee will take public testimony on SB 200 tomorrow, Thursday, May 7, 2026, at 8:00 a.m. Written testimony can be sent to [email protected]. If you want stronger local farms and real food security for Alaska, submit testimony today.
Barbara Haney is an economist specializing in public finance, land-use analysis, and regional economics.
