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City's port plan in strong position

The Legislature's head tax vote and appropriations set the city up to move ahead with Panamax docks

Posted: Thursday, April 22, 2010

Legislative decisions on the state's cruise passenger head tax place Juneau in a strong position to pursue the two new Panamax docks the city wants to develop in the downtown port, city officials said.

Michael Penn / Juneau Empire File
Michael Penn / Juneau Empire File

Lawmakers on Sunday passed a reduction in the state head tax but wrangling among them in the last days of the session turned out positively for Juneau, which will get $13 per passenger between its own taxes and those imposed by the state.

In addition, the Legislature passed Senate Bill 230, which appropriates $9 million in collected head taxes to Juneau this year. The city had asked for $10 million.

City officials were looking for a signal from state lawmakers about whether they would support port infrastructure projects in Juneau, Mayor Bruce Botelho said.

The cruise industry had cautioned the city against new development because of the recession.

Botelho said the Legislature's decisions "create the possibility" that Juneau could develop its port. The $40 million project would be funded with revenue bonds.

Port Director John Stone said he would likely meet with the Assembly in the next month to review financing in light of the Legislature's decisions.

"It definitely looks good for doing the two new Panamax berths for sure," he said.

Gov. Sean Parnell has about a month to strike items from the capital budget, which he already has said is too high. His budget proposal allocated $4.5 million this year for Juneau's port project, but the figure was doubled in the House.

The Legislature had $49 million to allocate from past cruise passenger tax collections. Lawmakers designated every penny of it.

Head taxes in Juneau's future

Fighting at session's end over SB 312, the head tax reduction, occurred mainly among Southeast representatives about which communities would get what cut. Lawmakers representing small ports such as those in Haines and Kodiak maneuvered against the interests of the busier destinations of Ketchikan and Juneau.

Under the final bill, Juneau gets $5 per passenger from the state. It already collects $8 per passenger in city taxes and fees, bringing Juneau's total to $13. Ketchikan, under a similar situation, gets $12 per passenger.

The final bill gives 53 percent of head tax collections to Juneau and Ketchikan. The remaining amount will be split among nine smaller ports.

Chip Thoma, president of Responsible Cruising in Alaska and co-author of the initiative that instituted head taxes in the first place, called the outcome fair. Thoma lives in Juneau.

At 850,000 passengers, Juneau and Ketchikan will collect about $10 million each per year.

"That's adequate money to be able to do what they need to, and smaller ports will have a fund to tap into from time to time," Thoma said.

Under the new tax structure, Juneau would have received $4.5 million in state tax collections this year instead of the $9 million it's likely to get. However, the new system provides more certainty and does not require the city to go back and make Legislative requests every year, Stone said.

"We're trading more certainty for the potential for more money," he said.

Juneau's port plans

The city wants to redevelop the Steamship Wharf so that it can accommodate two Panamax ships, bringing Juneau's ability to dock the largest of the industry's ships to four at a time. It can now dock three; two at private docks and one at the city-owned Steamship Wharf.

The city-owned dock is too short to accommodate two Panamax ships at a time. Plans are to extend it from shore diagonally into the harbor.

City officials considered several options about where the expansion could occur but preferred an alternative known as 16B, the Steamship Wharf expansion. Other options would have involved private landowners at Gold Creek or the Merchants Wharf.

Another choice is to fix existing docks with no expansion. There's corrosion and the design was not made for today's ships, Stone said.

"They were done 20 years ago, in 1990, when they were projecting ships half as heavy as they are today," he said.

Skagway and Ketchikan both have four Panamax docking spots.

"I think we're just trying to make ourselves catch up to other ports," Stone said.

In Juneau, ships sometimes have to anchor in port, forcing passengers to lighter to shore. Some passengers think that's a hassle and choose to not go ashore under those conditions.

• Contact reporter Kim Marquis at 523-2279 or kim.marquis@juneauempire.com.



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