Marine tax shift could help local harbors

Posted: Friday, January 28, 2000

It wasn't a new tax, but a new way of distributing an old tax that kept the House Transportation Committee busy Thursday.

The panel is considering a measure that would take 3 cents of the current 5-cent-per-gallon marine fuel tax out of state hands and deliver it to the municipalities where boats top off their tanks before hitting open water.

House Bill 243, which was introduced at the end of the 1999 legislative session, is intended to keep tax money in the hands of those towns that have to pay for harbor maintenance. However, the Department of Revenue called the idea ``unworkable'' because the state would have to re-vamp the way it collects boat fuel taxes.

The measure is the brainchild of Seward City Manager Scott Janke. His town took over its harbor from the state and is looking for a way to help pay for the $3 million annual cost to run and maintain it, he said. Janke figures the new tax scheme would raise $150,000 for his town's harbor.

``We want to have a known source of income to help pay for our harbors,'' he told the committee. He said the remaining 2 cents of the tax would go to the state, which could use that money for towns that don't benefit from the bill.

Rep. Al Kookesh, an Angoon Democrat, said the state has paid towns taking over state-owned harbors for deferred maintenance. That cost Alaska money - in Seward's case nearly $3 million - and now, he said, it appears Janke wants more.

The marine fuel tax collected $6.6 million in 1999 and the bill would reduce state revenue by about $3.8 million, said Brett Fried, an economist with the Department of Revenue.

Juneau Harbormaster Joe Graham said the bill would probably be a boon for local harbors. But he's concerned the measure would leave other harbors high and dry. He'd prefer to see the Department of Transportation spend the tax on harbors based on need.

``We would probably benefit from it,'' he said. ``I think the haves would continue to have and the have-nots would continue to be without solutions. I have a real problem with that.''

Fried said the marine tax is collected from wholesalers now. That system would have to be dramatically changed to assure the towns where the fuel is bought are properly credited. Also, he said, boats don't necessarily use the harbors where they buy gas. He noted Unalaska gets a lot of port traffic, but not that many boats stay in slips at the Southwest Alaska town's relatively small harbor.

Rep. Andrew Halcro, an Anchorage Republican and chairman of the committee, said he liked the bill and thought tax collection problems could be worked out. He said he intended to move the measure out of committee next week.

As far as he's concerned, municipalities that take on the liability of a harbor should get the money.

``If you're willing to accept that (responsibility), I think we should give it to you,'' he said.

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