Parnell targets cruise ship projects for vetoes

Posted: Sunday, June 06, 2010

Southeast legislators are questioning Gov. Sean Parnell's vetoes of several Southeast projects funded by cruise ship head tax revenues - money that can only be spent on visitor-related projects.

Parnell cut more than $6 million from the budget, all in Southeast. Others, including top priority items such as docks in Sitka and Ketchikan, the state's top cruise destinations, were approved, however.

In Juneau, Parnell vetoed $1.2 million in improvements to Centennial Hall for use as an emergency evacuation center. The money would have paid for a backup generator and other improvements for use as a shelter.

In 2008, Centennial Hall was used as an emergency shelter after the grounding of the Empress of the North in Icy Strait. City Manager Rod Swope said that was the fourth time the building had been used as an emergency shelter or had been on stand-by after a cruise ship grounding.

The cut was questioned by Juneau Reps. Cathy Muñoz, a Republican, and Beth Kerttula, a Democrat.

Muñoz called the Juneau veto "interesting" following an extensive legislative debate over cruise ship passenger funding.

Parnell's Office of Management and Budget Director Karen Rehfeld said four of the five had been identified in a Department of Law review as being potentially inappropriate uses of head tax money because they weren't connected enough to the cruise ships or passengers.

"They could certainly be considered in a future budget with a different funding source," she said.

State Rep. Kyle Johansen, R-Ketchikan, said he too was surprised by the cuts to projects funded by the head tax, especially after last year.

In 2009, then-Gov. Sarah Palin vetoed several Southeast cruise ship projects, but approved others in Anchorage and Wasilla.

"I'm not sure what the motivation was on the cruise ship stuff," Johansen said. "After last year's discussion of how close to the ports projects need to be, we were pretty careful as to ... what the federal law said."

Kerttula said that Parnell's action could undermine the head tax.

"That makes it seem like we're not using the fund, and that will be the argument for getting rid of the fund," she said.

Last year, after Palin blocked spending of the cruise ship money in Southeast, Holland America Line vice president Ralph Samuels challenged the legality of the head tax because it wasn't being fully spent. Samuels is now a Republican challenger for governor.

Parnell this year abandoned his previous support for the voter-approved cruise ship head tax, and successfully persuaded the Legislature to reduce the tax.

The fifth project vetoed by Parnell was a Haines tourist vessel, Rehfeld said.

There, $2 million would have been spent to purchase the Chilkat Portage Dock and the M/V Chilkat Express for cruise ship passenger access.

"The concern was that the project would then be in competition with a private business that is running a route between Haines and Skagway," Rehfeld said.

That project was less likely than the others to be a recipient of future funding from other sources, she said.

• Contact reporter Pat Forgey at 523-2250 or

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