Foes debate head tax for cruise ships

Panel members insist industry is not paying its fair share of taxes

Posted: Wednesday, March 23, 2005

A representative of the cruise ship industry said Alaskans would harm their economy if they approve a citizens' initiative to tax passengers.

Others on a panel at the Southeast Conference's mid-session gathering in Juneau on Tuesday said the state has a right to some of the money generated by its resources.

Don Habeger of the NorthWest CruiseShip Association asked Alaskans not to tax his industry. But the panel insisted companies were not paying a fair share for using state resources.

Companies will pass the costs down to their customers, Habeger said.

"Is that going to discourage people from coming to Alaska?" he said. "It will decrease the likelihood or attractiveness for coming here."

He added that New England cruise routes also featuring whale watching are gaining popularity.

The Southeast Conference, a regional organization of business and civic leaders, continues its conference today from 8 a.m. to 6 p.m. at Centennial Hall, and Thursday from 8 a.m. to noon. Today's discussions center on natural resources and transportation issues.

The tax topic is timely. Besides the initiative slated for the August 2006 primary, two state representatives are proposing bills this session to tax cruise ship companies at least $50 per passenger.

"They are using resources the state has and making money," said Carl Gatto, R-Palmer. "I would like to recoup some of the generated profits."

He cited that one cruise ship company's profits increased 56 percent last year.

This is Gatto's second attempt to pass a head tax on passengers. His first bill was stuck in the Economic Development, International Trade and Tourism Committee for two years before being killed by Chairwoman Cheryll Heinze. Now Gatto said his chances are better because his bill is in a committee headed by someone else.

Gatto's bill differs from the initiative by putting half of the money in the general fund and then $5 will go to each of the first five ports of call.

Another bill also introduced by Rep. Seaton, R-Homer, asks for $75 per passenger and splits $25 of that amount among all ports of call.

The initiative asks for additional measures such as a 33 percent tax on gambling in Alaska waters and requiring ships to hire marine engineers to monitor wastewater treatment and pollution control equipment. The initiative was approved by Lt. Gov. Loren Leman in December.

"This is not a vendetta against the industry," said attorney Joe Geldhof, sponsor of the initiative. He wants the money to be spent on infrastructure to accommodate more ships and their passengers so that the tourism is sustained.

Juneau and Ketchikan already charge taxes at $5 and $4 a person, respectively, and higher sales taxes. Chris Wyatt of the Juneau Chamber of Commerce said the cities enjoy having control of that money to maintain facilities that accommodate the ships and tourists.

Cruise ships brought 883,000 passengers to Juneau last summer, and they spent some $160 million, according to 2004 figures from the Juneau Visitors and Convention Bureau.

• Andrew Petty can be reached at

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