House vote trounces statewide cruise ship tax

Measure's sponsor says defeat came at hands of lines' lobbyists at the Capitol

Posted: Tuesday, May 10, 2005

The Alaska House on Monday rejected a last-ditch attempt to create a statewide cruise ship passenger tax, meaning that the tax measure will likely go before Alaska voters in August 2006.

The sponsor of the amendment, Rep. Carl Gatto, R-Palmer, pinned failure of the $46-per-passenger tax measure on high-stakes lobbying by the cruise industry at the state Capitol.

"The (cruise lines) have a lot of clout in this town," Gatto said, noting that some of the state's top-paid lobbyists are working on behalf of the industry.

"Obviously ... there are legislators that agree with industry. (The tax) makes Alaska less attractive as a destination," responded Don Habeger, a regional vice president for government and community relations for Royal Caribbean Cruises in Juneau.

Gatto's amendment failed 29-7. He had tried Sunday to insert an amendment into another bill, creating a $50 cruise passenger tax, which also failed.

"You have to admire his tenacity in just bringing it forward," remarked Juneau attorney Joe Geldhof, who created the 2006 ballot initiative including a $46 head tax as well as other taxes and environmental provisions.

Rep. Jay Ramras, R-Fairbanks, was one of several Republican legislators who rose in opposition to Gatto's amendments. He said the tax could cause cruise passengers to spend less money or choose not to visit Interior Alaska.

Gatto responded that cruise ship passengers who visit the Interior are already spending about $4,400 for their Alaska visit and an extra $46 would be insignificant.

Rep. Bill Thomas, R-Haines, said public testimony on the bill in committee meetings this session had logged only opposition.

"What if it does gut my community?" he asked, regarding Haines, which has been eliminated as a cruise destination in recent years after it created its own local cruise tax. "When you pick on one industry in Alaska, you've got trouble," Thomas said.

Rep. Beth Kerttula, D-Juneau, one of seven who voted Monday in favor of Gatto's amendment, said revenue from Juneau's $5 cruise ship passenger tax has resulted in "incredible improvements" to downtown Juneau.

The cruise industry has launched a legal fight with the state Division of Elections over the legality of the planned 2006 cruise ship ballot initiative.

Lt. Gov. Loren Leman added the cruise passenger tax initiative to the August 2006 primary ballot, where it will remain unless a statewide special election is held or the industry's legal challenge succeeds.

The opening volley of briefs in the case is due in the state's Superior Court in Anchorage on July 1.

"We agreed that this is a case that can be resolved as a matter of law (and) anticipate that a trial will not go forward," said Sarah Felix, an assistant attorney general handling the case for the state.

Gatto tried to tack the $46 tax and most other stipulations contained in the cruise ballot initiative to a bill revising Alaska air pollution rules, Senate Bill 144.

That bill passed the House, but without Gatto's amendment.



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