Cruise executive blames head tax for revenue drop

Ballot author calls Holland veep's attack 'Chicken Little politics'

Posted: Friday, July 31, 2009

A cruise line executive attacked the cruise ship initiative Thursday that imposes fees and environmental regulations on the industry.

Ralph Samuels, vice president of government and community relations for Holland America, said the costs of Ballot Measure 2 exacerbate declining revenues for cruise lines operating in Alaska.

The measure was approved by voters in 2006.

Dropping revenue margins will cause cruise lines to pull ships out of the state, Samuels said during his presentation at a Juneau Chamber of Commerce luncheon. And they'll take their marketing dollars with them, he added.

"Instead of pictures going out of a bear and a glacier, it's a piña colada and a beach," he said.

Alaska's passenger berths sold this spring at 30 to 40 percent discounts while prices in the Caribbean took only a 12 to 15 percent hit, he said. To fill berths, he said Princess sold some seven-day trips for $299.

"You can see the revenue dropping and you can see why the ships are heading out," he said.

Joe Geldhof, a Juneau lawyer and author of the ballot initiative language, called presentations like Samuels' "Chicken Little politics."

"People run around saying, 'The sky is falling, the sky is falling,' and after the chamber lunch, people say, 'The sky is falling we have to get something done,'" Geldhof said. "Ralph is trying to create hysteria, to stampede legislators over the cliff and repeal the head tax."

Samuels, a former state representative, acknowledged that a repeal of the initiative would be politically challenging but hoped to engage the governor's office and Legislature to find a compromise.

Voters approved Ballot Measure 2 in 2006. It imposed the head tax, added income and gambling taxes, and put regulations on ship wastewater discharges.

Cruise lines have complained the environmental regulations are too strict, and Samuels said Thursday the cost of compliance is too high and not part of doing business in other markets.

Four cruise lines operating in Alaska announced they would redeploy ships or change itineraries in 2010. The effect will be about 140,000 fewer passengers in Juneau next year, but impacts will be greater in Southcentral and the Railbelt, Samuels said.

With many business owners feeling the pinch of the economic downturn, Samuels' comments could hit a nerve.

Chamber member Murray Walsh recognized the recession is causing most of the hurt, but he said it is exacerbated by Ballot Measure 2.

Walsh said given another chance, voters might say, "Oh my God, we've screwed ourselves," and vote to repeal it.

• Contact reporter Kim Marquisat 523-2279 or e-mail

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