Key Performance Indicators

Department of Revenue

Mission

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

Key Performance Indicators

FY2023 Management Plan as of 05/30/2023 (in thousands)
Department of Revenue Totals	Funding					Positions
	UGF Funds	DGF Funds	Other Funds	Federal Funds	Total Funds	Full Time	Part Time	Non Perm
	$27,201.1	$3,219.5	$370,920.2	$175,591.4	$576,932.2	826	24	18

1:	Funds Collection Collection activities for the Department of Revenue include but are not limited to: Child Support Services collecting from obligors, Alaska Housing Finance Corporation collecting rents and mortgage payments, and the Tax Division collecting state taxes owed.	Funding					Positions
		UGF Funds	DGF Funds	Other Funds	Federal Funds	Total Funds	Full Time	Part Time	Non Perm
		$20,708.9	$1,156.8	$44,457.9	$84,626.3	$150,949.9	402	10	8

Target: Conduct five new compliance projects to identify non-filers.
Target: 90% of existing taxpayers file their tax returns and make tax payments timely.
Target: Increase child support collections by 1.0%, to include Permanent Fund Dividend collections.
Target: 1,000 hour increase in audit hours over prior year.

2:	Funds Distribution Distribution activities for the Department of Revenue include but are not limited to: Permanent Fund Dividend Division distribution of Permanent Fund Dividends to eligible Alaskans, Child Support Services distributing payments to the custodial parent, and Tax Division distributing shared taxes to communities.	Funding					Positions
		UGF Funds	DGF Funds	Other Funds	Federal Funds	Total Funds	Full Time	Part Time	Non Perm
		$4,579.1	$1,063.9	$52,891.4	$70,384.7	$128,919.0	284	11	6

Target: Increase disbursements of child support payments by 0.5%.
Target: Maintain or reduce administrative costs from year to year.
Target: Increase Senior Housing units
Target: Increase Multi-Family units

3:	Funds Investment Funds Investment activities for the Department of Revenue include but are not limited to: Permanent Fund Corporation investment of the fund, Treasury and Alaska Retirement Management Board (ARMB) investment of the state"s funds and retirement systems, and Alaska Mental Health Trust Authority (AMHTA) and Alaska Housing Finance Corporation (AHFC) cor	Funding					Positions
		UGF Funds	DGF Funds	Other Funds	Federal Funds	Total Funds	Full Time	Part Time	Non Perm
		$1,380.4	$998.8	$273,151.9	$20,580.4	$296,111.6	134	3	4

Target: For the funds under the fiduciary responsibility of the Commissioner of Revenue, exceed the applicable 1-year target returns.
Target: A long-term 5% real rate of return
Target: Formal visit, bond issue update, or updated document template sent or presented to ratings agencies at least four times per year.
Target: 100% of new financings will result in savings or diminished administrative effort.

4:	Safety for Alaskans The Long Term Care Ombudsman is located with the Alaska Mental Health Trust Authority and performs investigations of complaints regarding Alaskans in long term care who may be experiencing a negative care situation.	Funding					Positions
		UGF Funds	DGF Funds	Other Funds	Federal Funds	Total Funds	Full Time	Part Time	Non Perm
		$532.7	$0.0	$419.0	$0.0	$951.7	6	0	0

Target: 90% of all complaints received by the LTCO program are resolved to the satisfaction of the resident or their representative.

Performance Detail

Priority 1: Funds Collection

Target #1: Conduct five new compliance projects to identify non-filers..

Compliance Projects Conducted

Fiscal Year	# of Compliance Projects	# New Taxpayers
FY 2022	180	11
FY 2021	207	18
FY 2020	250	22
FY 2019	72	11
FY 2018	73	45
FY 2017	67	27
FY 2016	27	15
FY 2015	12	18
FY 2014	15	11
FY 2013	8	62

Analysis of results and challenges: The Tax Division encourages voluntary compliance as the most effective tool for collecting tax revenues. An important aspect of voluntary compliance is for taxpayers to believe that they are paying about the same amount in taxes as other similarly situated taxpayers. Seeking out and finding new taxpayers and bringing them into compliance assists the Tax Division both in long-term voluntary compliance as well as bringing in the revenues from the new taxpayers. The Tax Division does not believe there are any major oil and gas taxpayers not filing. Therefore, the Tax Division focuses its compliance efforts on other tax types. This target and measure do not include federal or multi-state compliance programs in which the Tax Division currently participates.

Compliance projects include analyzing databases of other states, the federal government, and local agencies to ensure that a person engaged in a taxable activity is filing required tax returns. In the past, the Tax Division has also conducted taxpayer outreach and education through attendance at industry meetings and conferences.

Target Last Modified: 11/01/2022

Target #2: 90% of existing taxpayers file their tax returns and make tax payments timely..

Taxpayers Filing and Paying Taxes Timely

Fiscal Year	% of Timely Filers
FY 2022	85.8%
FY 2021	83.2%
FY 2020	88.8%
FY 2019	88.2%
FY 2018	88.8%
FY 2017	87.4%
FY 2016	89.7%
FY 2015	89.0%
FY 2014	98.5%
FY 2013	98.5%

Analysis of results and challenges: The Tax Division completed its final rollout of its Tax Revenue Management System (TRMS) in FY2017. The new system replaced many outdated legacy systems and allowed us to get more accurate information from tax returns. While the above graph and table report a decrease in timely filing and paying of tax returns beginning in FY2015 (the year of our first rollout), we believe the higher numbers in earlier years were not correct, but a flaw in our previous system reports. We have checked with other states and they have told us that their timely filing rates are below 90 percent (some are far below). We feel the new system is giving us more accurate information. It should be noted that certain assumptions had to be made to produce the number provided. For example, only returns and payments that have been received are considered in the calculation. There may be returns and payments that will be late but have not yet been received. One of the primary functions of the Tax Division 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 the Tax Division actively looks 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 Tax Division makes it relatively easy to file returns and pay taxes. As such, the most effective way to measure performance is to look at the percentage of known taxpayers who timely file their returns and pay their taxes.

TRMS has a public facing component which allows taxpayers to file and make payments online. The Tax Division has had great success with this system and believes it is a factor in the performance reported.

Target Last Modified: 11/01/2022

Target #3: Increase child support collections by 1.0%, to include Permanent Fund Dividend collections..

Percent Change in Total Child Support Collections for a Fiscal Year

Fiscal Year	% Change
FY 2022	-5.7%
FY 2021	-8.02%
FY 2020	15.6%
FY 2019	0.60%

Analysis of results and challenges: FY2022 collections including Permanent Fund Dividends (PFDs) decreased by 5.70% over FY2021.

The division did meet the target of a 1% increase over FY2021. This is due to the ending of the CARES stimulus payments as well as the increased Unemployment Insurance Benefit payments. This is an increase from where the division was prior to the CARES stimulus funds and collections will normalize over the next reporting period. The goal for the next fiscal year remains a 1% increase.

Target Last Modified: 11/02/2022

Target #4: 1,000 hour increase in audit hours over prior year..

Change in Audit Hours over Prior Year

Fiscal Year	# of Hours	Target
FY 2022	-316	2000
FY 2021	-2,083	2000
FY 2020	963	2000
FY 2019	455	2000
FY 2018	-92	2000
FY 2017	-2,670	2000
FY 2016	4,168	2000
FY 2015	-1,102	2000
FY 2014	-11,582	2000
FY 2013	-4,957	2000

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, therefore, the Tax Division needs to increase its audit numbers.

The Tax Division strives to increase its year-over-year audit hours in an effort to be more efficient with its time and spend auditor time on things that will generate the greatest benefit to the State. The Tax Division began design and development of its TRMS in April of 2013. In order to ensure that implementation was successful, the Tax Division deliberately cut back on the number of audits conducted and diverted those resources to the implementation of TRMS. Full implementation of TRMS was completed in February of 2016. The project took a lot of our audit staff time in design and testing at various stages. The decrease in audit hours in FY2013 - FY2015 is a result of diverting resources to TRMS. The decrease in hours in FY2017 - FY2018 can partially be explained by the fact that there have been significant changes in the oil and gas production tax regime which has required programming changes to TRMS. The oil and gas production tax and corporate income tax Audit Groups remain current on all oil and gas audits. This past year resulted in a slight decrease in overall audit hours. This decrease is primarily due to vacant positions and challenges in recruitment. The expectation is that these numbers will reverse and increase for the next annual period.

Target Last Modified: 11/01/2022

Priority 2: Funds Distribution

Target #1: Increase disbursements of child support payments by 0.5%..

Methodology: % change from the prior year

Disbursements of Child Support Payments

Fiscal Year	% Change
FY 2022	-4.4%
FY 2021	-4.54%
FY 2020	11.79%
FY 2019	1.21%

Analysis of results and challenges: This measure has a direct correlation to the amount of collections received in the fiscal year: when collections increase, disbursements also increase.

Due to the CARES Act and enhanced unemployment payments ending, overall collections decreased by 5.07% while disbursements decreased 4.40%. This is still a substantial increase from where we were before the CARES Act funding was implemented. The collections are normalizing and will continue to do so.

The division is focused on improving processes and implementing technology to meet our target increase of 0.5% in child support disbursements.

Target Last Modified: 11/02/2022

Target #2: Maintain or reduce administrative costs from year to year..

Methodology: Calendar/dividend year is used for Permanent Fund dividend (PFD) application and payment statistics. Appropriations are based on state fiscal year and become effective on July 1 of the dividend year shown.
*Total PFD appropriation includes funding for fiscal notes, prior year supplementals, and new capital appropriations.
**Number of applications received by the Permanent Fund Dividend Division at time of dividend calculation. at time of dividend calculation.

Estimated Cost per Dividend Paid

Fiscal Year	Dividend Year	Total PFD Appropriation*	#Applications Received**	Estimated # PFD's Paid	Estimated Cost Per PFD
FY 2022	2021	$8,241,200	664,282	634,368	$12.99
FY 2021	2020	$8,249,400	672,277	634,831	$12.99
FY 2020	2019	$8,329,400	678,287	638,414	$13.04
FY 2019	2018	$8,323,000	670,759	639,247	$13.02

Analysis of results and challenges: Paper applications have steadily decreased over the past three years. The increase in web applications has created efficiencies throughout the application and eligibility determination process. As online activity has increased the division has been able to reallocate resources which prioritize Alaskans personal data security, and fraud protection.

Target Last Modified: 11/01/2022

Target #3: Increase Senior Housing units.

Analysis of results and challenges: The Alaska Department of Labor and Workforce Development (2020) estimated that the senior population (65+) in Alaska could grow from 12,000 to 22,000 by 2045 (low/high forecast scenario). In terms of total population, this represents a total senior population increase of 5-6% over the next 25 years.

Senior housing remains a high priority for the Corporation. While funding for senior housing has remained stable in recent years, the Alaska senior population continues to grow. This places a demand on communities throughout the State to fund the growing gap between housing need and availability, in a market where there is also a gap between the rents achievable and the cost of building new senior housing units.

Note: Although AHFC provides mortgage financing for assisted living facilities, those developments report beds rather than units; consequently, the data above excludes AHFC mortgages to assisted living properties.

Target Last Modified: 10/06/2022

Target #4: Increase Multi-Family units.

Analysis of results and challenges: Affordable rental housing remains in demand and vacancy rates were down across the state. The production of multi-family housing activity is subject to interest rates, local economic conditions, and other volatile market factors. New construction across the state continues to face marginal feasibility due to high construction costs and the persistent gap between achievable rents and those required to support the high development costs.

Target Last Modified: 10/06/2022

Priority 3: Funds Investment

Target #1: For the funds under the fiduciary responsibility of the Commissioner of Revenue, exceed the applicable 1-year target returns..

Methodology: FY2022 one-year return data is for the period 7/1/2021 through 6/30/2022.

One-year Return Data for Funds Managed by the Treasury Division

Fiscal Year	Fund	Actual Return	Target Return
FY 2022	Gen Fund/Other Non-segregated Fu	-1.47%	-1.44%
FY 2022	Public School Trust Fund	-13.44%	-13.49%
FY 2022	Intl Airports Revenue Fund	-1.49%	-1.44%
FY 2022	Const Budg Resv Fund-Main Acc	0.12%	0.17%
FY 2022	Retirement Hlth Ins Fund-LongTer	-12.98%	-12.94%
FY 2022	Retirement Hlth Ins Fund- Maj Me	-0.12%	0.17%
FY 2022	Power Cost Equalization Fund	-12.86%	-12.80%
FY 2022	Illinois Creek Reclamation Fund	-13.45%	-13.49%
FY 2022	Alaska Higher Education Fund	-13.47%	-13.49%
FY 2022	Gen Fund/Other Non-segregated II	-3.61%	-3.53%

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 fund"s 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. Due to rising rates at the end of FY2022, many of the investments fell below targets for the year however performance has improved in FY2023 and all investments beat their 5 year targets.

Target Last Modified: 11/01/2022

Target #2: A long-term 5% real rate of return.

Rolling 10-year real rate of return; annualized returns for periods ended June 30

Fiscal Year	Fund Total Return	APFC Inflation Rate	Fund Real Return	Long-Term Real Return
FY 2022	8.9%	1.9%	7.0%	5.0%
FY 2021	9.0%	1.7%	7.3%	5.0%
FY 2020	8.3%	1.8%	6.5%	5.0%
FY 2019	9.2%	1.5%	7.7%	5.0%
FY 2018	6.5%	1.7%	4.8%	5.0%
FY 2017	5.0%	1.8%	3.2%	5.0%
FY 2016	5.4%	2.0%	3.5%	5.0%
FY 2015	6.4%	2.3%	4.1%	5.0%
FY 2014	7.0%	2.4%	4.6%	5.0%
FY 2013	6.8%	2.5%	4.4%	5.0%

Analysis of results and challenges: Alaska Statute 37.13.120 defines APFC"s responsibilities for the investment of the Fund. The statute requires that APFC"s Board of Trustees apply the Prudent Investor Rule standards, emphasizing diversification and long-term goals in asset allocation strategy when making investment decisions. The Board authorizes APFC staff to make investment decisions to maximize the risk-adjusted return of the portfolio.

The Board of Trustees" long-term investment objective for the Fund is to generate total returns in excess of Inflation/CPI plus 5%, with acceptable levels of risk. The Board has defined an approved risk guideline to delineate the absolute and relative risk staff may take to achieve these investment objectives. The Fund is invested across eight asset classes in both public and private markets to achieve this goal. The portfolio is designed to deliver compelling long-term returns under a variety of potential market conditions.

The Alaska Permanent Fund"s (APFC) long-term rolling 10-year Real Rate of Return for the fiscal year period (FY) 2013-2022 was 7.0% with an inflation rate of 1.9%, and the Total Rate of Return for the same period was 8.9%. The Fund"s annualized total return for 38.5 years, ended June 30, 2022, was 8.8%.

For FY2022, the Fund ended the year with a value of $76.3 billion in assets under management (AUM). This is comprised of $60.2 billion in the Principal of the Fund and $16.1 billion in the Earnings Reserve Account (ERA). The portion of dedicated State of Alaska revenues deposited into the Fund"s Principal (or "corpus") is based on mineral prices and production. In FY2022, this amount came in at $549 million, well above FY2021"s deposits of $320 million.

Target Last Modified: 11/01/2022

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

Fiscal Year	# of Updates
FY 2022	7
FY 2021	9
FY 2020	7
FY 2019	7
FY 2018	6
FY 2017	7
FY 2016	16
FY 2015	11
FY 2014	5
FY 2013	4

Analysis of results and challenges: Presentation and discussion with ratings agencies ensures the proper context is given to the State"s revenue, economic, and debt profile to support the State"s credit ratings.

Target Last Modified: 11/01/2022

Target #4: 100% of new financings will result in savings or diminished administrative effort..

New Financings That Resulted in Savings

Fiscal Year	Percent	Aggregated Savings
FY 2022	100%	$3.7 million
FY 2021	100%	$51.7 million
FY 2020	100%	$1.0 million
FY 2019	100%	$4.3 million
FY 2018	100%	$3.4 million
FY 2017	100%	$41.2 million
FY 2016	100%	$75.3 million
FY 2015	100%	$25 million
FY 2014	100%	$12.7 million
FY 2013	100%	$19.6 million

Analysis of results and challenges: In each fiscal year shown, all authorized Alaskan borrowers that borrowed funds through the Alaska Municipal Bond Bank Authority are projected to be paying less debt service (realized savings) than they otherwise might have using other means of financing their project or diminished the administrative burden of their staff.

Target Last Modified: 10/06/2021

Priority 4: Safety for Alaskans

Target #1: 90% of all complaints received by the LTCO program are resolved to the satisfaction of the resident or their representative..

Complaints Resolved to Satisfaction or Partial Satisfaction of Complainant

Federal Fiscal Year	Complaints Received	% Resolved
FFY 2021	292	82%
FFY 2020	374	80%
FFY 2019	583	97%
FFY 2018	631	98%
FFY 2017	508	98%
FFY 2016	662	95%
FFY 2015	880	96%
FFY 2014	1150	95%

Analysis of results and challenges: During FFY 2021, this target was not met. The Long-Term Care (LTC) Ombudsmen remained limited to in-person visits due to federally mandated visitation restrictions during the first half of FFY 2021. In-person visits gradually resumed in March of 2021 in a very limited fashion while our team continued to follow COVID 19 protocols. The LTCO Ombudsmen did not visit facilities with known COVID cases which also hindered our ability to complete in-person visitations. The LTCO program receives many of our complaints from in-person visitations with residents. Due to our limited in-person visits, the program recorded fewer complaints. The data revealed that the LTCO program received 122 fewer complaints in FFY 2021 as compared to the previous federal fiscal year. Approximately 82% of the 292 complaints were resolved to the satisfaction of the resident. The goal of the investigation process is to maximize resident participation and determine the wishes of the resident with respect to the resolution of the complaint. The LTCO complaint process begins with the resident and ends the resident. The resident determines if they are satisfied with the outcome of the complaint.

Who filed complaints to the LTCO program in FFY 21: 48% of complaints received were from residents in facilities; 19% of complaints were reported by resident representatives, or family members; 14% of complaints were initiated by representatives of other agencies and all other complaints came from facility staff, friends of residents and other concerned citizens of the community.

Target Last Modified: 11/01/2022

Last refreshed: 05/30/2023 05:00 pm