The mission of the Department of Revenue is to collect, distribute and invest funds for public purposes. Alaska Constitution Article 9; AS 25.27, AS 37, AS 43
- Funds Collection
- Funds Distribution
- Funds Investment
- Safety for Alaskans
|A: Result - Department Result|
|A1: Core Service - Funds Collection|
Target #2: 90% of existing taxpayers file their tax returns and make tax payments timely.
Taxpayers Filing and Paying Taxes Timely
Analysis of results and challenges: The Tax Divisionís primary function is to encourage voluntary compliance by all taxpayers across all tax programs. This is achieved in a variety of ways, i.e. taxpayer education and outreach programs, compliance activities where we actively look for non-filers, and collection activities. Taxpayers are more apt to voluntarily comply if they believe that everyone else is paying their fair share and the Division makes it relatively easy to file returns and pay taxes. As such, the most effective way to measure our performance is to look at the percentage of known taxpayers who timely file their returns and pay their taxes.
During the last few years, the Division has focused on making it easier for taxpayers to file returns and pay taxes due with an online payment system. We have had great success with this system and believe it is a factor in our ability to achieve this performance goal. At the end of FY2014 the Division introduced an improved online payment system for corporate income and excise taxpayers to file returns online. The new online services are part of the Revenue Management System the Tax Division has been developing since FY2013. The Division is currently developing the Revenue Management System for oil and gas property and production taxes which is scheduled to be implemented in FY2015. The Division expects improved compliance due to the ease of filing and paying online. Although this measure looks specifically at known taxpayers, it is important for the Division to continually update its existing taxpayers on changes to tax statutes and regulations while also looking for non-filers. We will strive to retain a 90% or better level of compliance by existing taxpayers in future years.
Target #3: Increase child support collections by 1.0%, net of Permanent Fund Dividend collections.
Percent Change in Total Child Support Collections for a Fiscal Year
Analysis of results and challenges: FY2014 collections net of Permanent Fund Dividends (PFDs) increased by .222% over FY2013. Collections in all categories (including PFDs) increased .3% in FY2014.
Continued high staff turnover has resulted in a lack of experience among front line staff, with more than 42% of the front line staff having less than 1.5 years in their current jobs. Staff turnover this past year was 42.3%.
The division exceeded last yearís target of 1% and the target for the next fiscal year is 1%.
Target #4: 1,000 hour increase in audit hours over prior year.
Change in Audit Hours over Prior Year
Analysis of results and challenges: Although voluntary compliance remains our best tool for effective tax collection, that voluntary effort is enhanced by an audit presence, and therefore, we need to increase our audit numbers.
In FY2013, the Division began implementing an integrated tax revenue management system. In order to ensure that implementation is successful, the Division deliberately cut back on the number of audits conducted and diverted those resources to the implementation of the new system. Full implementation of the system will take approximately 3 years and the Division expects that the number of new audits and the number of audit hours will continue to decrease over previous years until the system is fully operational. The Production Audit Group remains current on all oil and gas productions audits.
|A2: Core Service - Funds Distribution|
Target #1: Increase disbursements of child support payments by 0.5%.
Disbursements of Child Support Payments
Analysis of results and challenges: This measure works with the amount of collections received in the fiscal year; if collections have increased then disbursements should also increase. This measure also works in conjunction with the "money on hold" measure (see CSSD strategy A2, measure #2); if there is less money on hold then disbursements should also increase.
Overall collections increased by .3% while disbursements decreased only .04%
As the economy continues to improve, the target will be an increase of 0.5% for the current year and will be reevaluated again next year.
Target #2: Maintain or reduce administrative costs from year to year.
Estimated Cost per Dividend Paid
Analysis of results and challenges: The Division was successful in operating the PFD program with only seeing a nominal increase in the amount per dividend. Although the overall number of applicants slightly decreased, the costs associated with other Division services to prior and future applicants remain constant.
Target #3: Increase Senior Housing units by 5%
Senior Housing Units
Analysis of results and challenges: The recent unit production is a function award criteria modifications made by AHFC since 2010 for rental development subsidies and match funding included in projects funded. While development costs remain high, rating criteria revision have reduced cost escalation trends in funded projects and increased the incentives for leverage / match funding included proposed developments. Although program funding has remained flat in recent years and historical match sources have been reduced, the unit production goal was realized by leveraging the incentives used in the competitive allocation process where $3+ in subsidy is typically requested for every $1 available.
Although AHFC provides mortgage financing for assisted living facilities, those developments report beds rather than units; consequently, AHFC mortgages to assisted living properties are excluded from these ďunitĒ data. AHFC's annual Capital budget appropriation is responsible for 93% of the units added this year. The gap between the need and what is developed grows each year. Senior and special needs housing remains a high priority for the Corporation.
Target #4: Increase Multi-Family units by 3%
Analysis of results and challenges: The change in unit production from FY13 is a function of rate competitiveness, development costs and flat funding. AHFC remains challenged by the federal governmentís access to less expensive capital through Fannie Mae and Freddie Mac, and increased warehousing of multifamily loans by large, national lenders. AHFCís programs offer advantages, such as assumability in a rising interest rate environment and longer terms that may increase production in the upcoming fiscal year.
Multi-family housing activity is subject to interest rate fluctuations, local economic conditions and other unpredictable market influences Ė including rehabilitation activities utilizing AHFC funds which are omitted from these data by methodology. Affordable rental housing remains in demand and benefits markets by freeing proportional household income to be spent in the community. However, new construction faces marginal feasibility due to the spread of achievable rents and rents needed to supporting development costs. Unit production will remain a challenge due to high development costs, flat funding and reductions in match funding available for AHFC funded projects.
|A3: Core Service - Funds Investment|
Target #1: For the funds under the fiduciary responsibility of the Commissioner of Revenue, exceed the applicable 1-year target returns.
One-year Return Data for Funds Managed by the Treasury Division
Analysis of results and challenges: A combination of investments that is expected to produce the highest investment return for a given amount of risk is known as a "point on the efficient frontier." Each fiduciary for a fund reviews points on the efficient frontier and selects the combination of investments consistent with their appetite for risk and return of the fund. This selection is known as the target asset allocation. Target returns assume the total rate of return of passively managed indexes invested in the same proportions as the target asset allocation. A fundís investment return will differ from its target return if its asset allocation differs from the target asset allocation or if the returns of the underlying investments differ from those of the passively managed indexes.
Target #2: A long-term 5% real rate of return
Analysis of results and challenges: The Alaska Permanent Fundís long-term real rate of return for the period FY2005 Ė FY2014 was 4.6%. This performance period includes the challenging markets of 2008 Ė 2009. The Fund's annualized real return for 30.5 years, ended June 30, 2014, was 9.0%.
The Permanent Fund recorded another year of positive performance, up 15.5 percent for fiscal year 2014, ending the year with a value of $51.2 billion. This is the first time that the Fund has ended a fiscal year above $50 billion, and is a $6.3 billion increase over the closing value for the prior fiscal year. The Fundís return trailed the composite benchmark return of 15.7 percent, a result of taking on less risk in the Fundís investments than this benchmark and other public funds.
The Board of Trustees strategically allocates the Fund among stocks, bonds, real estate, and alternative investments. Different types of assets are influenced differently by factors such as the economic cycle, interest rates, inflation and fiscal policy. This creates a mix of asset types whose returns move out of sync with one another, moderates the Fundís total volatility, and increases the possibility of achieving a positive return.
All of the Permanent Fundís asset classes produced positive returns for the fiscal year, from 5 percent gains for the bond portfolio, to almost 30 percent returns on the Fundís U.S. stock holdings. While it does happen at times, it is not usual for all of the Fundís asset classes to be in positive territory, and it certainly contributed to the strong total return for fiscal year 2014.
Target #3: Formal visit, bond issue update, or updated document template sent or presented to ratings agencies at least four times per year.
Updates Provided to Ratings Agencies
Target #4: 100% of new financings will result in savings.
New Financings That Resulted in Savings
Analysis of results and challenges: In each fiscal year shown all communities that borrowed funds through the Bond Bank are projected to be paying less debt service (realized savings) than they otherwise might have using other means of financing their project.
|A4: Core Service - Safety for Alaskans|
Target #1: 90% of all complaints received are resolved to the satisfaction of the resident or complainant.
Complaints Resolved to Satisfaction or Partial Satisfaction of Complainant
Analysis of results and challenges: In FY2013, 2% of cases were not resolved to the satisfaction of the complainant or resident and 4% were either referred to another agency, resolved, withdrawn or required no action.
Current as of September 18, 2014