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 nonfilers, 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.
In FY2013, 98.5% of known taxpayers voluntarily filed their tax returns and paid taxes due at the time required by law. This is an increase from FY2012 and significantly above our goal of 90%. This indicates that the Tax Division is doing a good job at educating taxpayers on their responsibility to file tax returns and pay taxes due. This is also an indication of whether taxpayers have problems when filing their tax returns or making tax payments. 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. 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 nonfilers. 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: FY2013 collections net of Permanent Fund Dividends (PFDs) decreased by 2.2% over FY2012. Collections in all categories (including PFDs) decreased 5.1% in FY2013.
Continued high staff turnover has resulted in a lack of experience among front line staff. This lack of experience has resulted in a decrease in collections and several other performance measures. Staff turnover this past year was 46.7%. Currently more than 46% of the front line staff has less than 1.5 years in their current jobs.
Because the economic outlook is still uncertain as far as employment numbers are concerned, which could have a negative impact on collections, the target will be 1% for the current year and will be reevaluated again next year.
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.
The reduced collections resulted in reduced distribution. Overall collections decrease by 5.1% while disbursements decreased only 4.2%
Because the economic outlook is still uncertain as far as employment numbers are concerned, 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 this year while reducing the cost per dividend. Dividend applications were relatively flat year over year and the resultant workload was manageable with the existing budget.
Target #3: Increase Senior Housing units by 5%
Senior Housing Units
Analysis of results and challenges: The change in unit production is a function of award criteria modifications made by AHFC 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, increased unit production was delivered by leveraging the incentives used in the competitive allocation process where $3.50 in subsidy is requested for every $1 available.
Although AHFC provides mortgage financing for assisted living facilities, the methodology for reporting those developments counts beds rather than units; consequently, AHFC mortgages to assisted living properties are excluded from these data. Seniors continue to be the fastest growing segment of the population. In large part, the number of units added each year depends primarily on AHFC's annual Capital budget appropriation. The gap between the need and what is developed grows each year. The number of persons with mental and physical disabilities has also been increasing over time. 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 FY12 is a function of rate competitiveness, development costs and flat funding. The national secondary market for multifamily is stabilizing as more of the population moves from homeownership to rental housing, but 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 FY2004 Ė FY2013 was 4.4%. This performance period includes the challenging markets of 2008 Ė 2009. The Fund's annualized real return for 29.5 years, ended June 30, 2013, was 8.8%.
Alaska Permanent Fund returned 10.9 percent for the fiscal year 2013 ended June 30, with a closing balance of $44.4 billion.
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.
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 November 4, 2013