While city leaders debate raising taxes for cruise ships, another question needs to be answered: Who should be in control of Juneau's waterfront?
The outcome of the controversy over raising cruise-line fees will help determine who is really shaping the development of Juneau's waterfront.
The city has long been planning changes to the downtown waterfront - including a seawalk, expanded green spaces and more room for 1,000-foot cruise ships - ultimately making Juneau a more attractive place for residents and visitors. These projects will cost tens of millions of dollars over the next couple of decades, so the Juneau Assembly is working to find ways to pay for them.
The city is looking at increasing the port development fee by $1 per passenger, per day this year and next. Some cruise lines pay 18 cents per passenger now, while others pay $2.18, based on a plan worked out among the cruise ship companies themselves. Then in 2007, when debts on certain projects are paid off, the city would charge all of the cruise lines $3 per passenger per day. These fees are in addition to a $5 head tax and other taxes.
The industry, however, is none too pleased about the proposal. Its representatives argue that the industry doesn't want to have to pay for projects that aren't clearly defined yet and that aren't of benefit to cruise ships. But federal law prevents the city from levying cruise ship taxes that don't address safety or business issues related to the industry.
The city should not have to go to the negotiating table with the industry every time it wants to make public improvements that will be used by cruise ships and their passengers. It makes far more sense for the city to come up with a long-range development plan for the waterfront - as it has - and then look at a comprehensive, rather than a piecemeal, way to pay for it. This proposed fee hike helps do that. It allows the city to be in control of the future of the waterfront, rather than quibbling over each piece of the plan with the cruise lines.
Cruise-line officials also argue that the industry is already paying its fair share. Indeed it is paying millions of dollars in taxes statewide. But one needs to look at the numbers to figure out what's fair. The proposed port development fee hike would generate an estimated $900,000 in 2005 and $950,000 in 2006, divided between more than half a dozen cruise ship companies.
While the cruise lines vary in size, the larger ones are enormous corporations making huge profits. Carnival Corp.'s net income for 2004, for instance, was $1.85 billion. Royal Caribbean's net income rose 66 percent to $500.5 million in the first nine months of 2004, with revenues of $3.59 billion. The city's port development fee hike is not too much to ask of these lucrative companies, especially when it means helping Juneau remain attractive to the cruise ship industry's customers.
Raising the port development fees to fund upcoming projects does shift the power in waterfront negotiations and allows the city to have a continued source of funding for long-term planning. Cruise-line representatives should be a part of the discussion on fee changes and the future of the waterfront. But the people of Juneau need to be the ones who have the final say. The proposed fee hike helps ensure that the waterfront is developed not just for one industry, but for the good of the entire community.