Proposed cargo tax would mean higher costs for Alaskans

Washington state bill charges extra $50 per 20-foot container

Posted: Friday, February 16, 2007

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Angry Alaska lawmakers and industry experts sounded off Thursday about Washington state plans for a cargo container tax that could increase the cost of most basic goods by as much as 10 percent.

The Washington tax bill, authored by Sen. Mary Margaret Haugen, would require marine operators to pay an extra $50 per each 20-foot container or its equivalent as it enters - and again as it exits - any port in the state.

"I know this is a mom-and-apple pie issue for almost everyone in this room here," said Don Kubley, a lobbyist from Ketchikan.

During an Alaska House Transportation Committee meeting, Kubley called the measure offensive and supported an Alaska legislative resolution that opposes it. He spoke on behalf of Samson Tug and Barge and Southeast Alaska Pilots Association.

Since the bulk of containers shipped from Alaska are 53 feet, the tax would add $265 to the cost of each, said Everett Billingsley of Lynden, which owns Alaska Marine Lines.

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The Washington tax would cost the company roughly $6.2 million annually, he estimated, and the company would have to raise its rates by 10 percent or more.

Statewide, the tax could cost Alaska freight companies an estimated $40 million per year. The Alaskan counter-resolution says 97 percent of all goods shipped to Alaska, as measured by weight, come in by water.

"In essence this will affect everybody in the state of Alaska in one form or another," said Mark Neuman, a Wasilla Republican and vice chairman of the Transportation Committee.

Small Southeast communities with high unemployment could be crippled, said Rep. Bill Thomas, R-Haines, who introduced the Alaska resolution.

Representatives of the fishing industry, which ships most of its frozen product to Washington state, also said their shipping costs would rise dramatically.

In 2003, Alaska was Washington's fifth largest trading partner. Lawmakers Thursday acknowledged that the tax was not aimed specifically at Alaskans, but at the growing Asian trade.

"My understanding is they are trying to target in and out (cargo) coming in and out of Japan and China. They probably didn't look as far down as five to see what the impact is on us," said Rep. Craig Johnson, R-Anchorage.

"The impact on Alaska I think was unintended consequences. We are a little different from the typical state," Billingsley said.

"I think Alaskans should not be bearing the burden," he said.

The tax bill was heard in Washington state's Senate Transportation Committee Jan. 24, but no decisions were made. Senate staff in Olympia said Thursday that Haugen was working with stakeholder groups to find compromise on a variety of issues, including the rate and the date it would become effective, if passed.

Ninety percent of the new tax revenue would go into a "freight congestion relief account." The remaining 10 percent would remain with the port terminal operators to cover administration costs.

The account would be used to pay for infrastructure improvements to support Washington's growing cargo industry.

The House Transportation Committee in Juneau also discussed possible measures in case the tax proposal passes.

"We are not ready to retaliate. We are just looking at responding. We are hoping that the state of Washington will kill this or sit on it," Thomas said. "We have talked about adding taxes on oil, but it hasn't gotten serious."

The Alaska counter-legislation is scheduled for a hearing before the House Labor and Commerce Committee on Monday.

• Brittany Retherford can be reached at brittany.retherford@juneauempire.com.



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