Empire editorial: Cruise ship initiative a measure of fairness

Posted: Sunday, August 20, 2006

Ballot Measure 2, which Alaska voters will decide on Tuesday, has come to be known as the bill that has it all, kitchen sink included.

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The initiative is also one that has enormous implications for the cruise ships that bring almost a million worldwide visitors to our state each year. It's equally important to Alaska's ports of call and their residents, and the private businesses large and small that work with the cruise ships and their passengers.

Ballot Measure 2, which would impose a $50 tax for each passenger traveling on a cruise ship, is ultimately about fairness and what is right for the residents of this state, and it is a bill whose time has come.

The cruise companies have spent more than $1 million fighting this initiative, but it's a tax they won't even pay themselves. That entire cost will be passed directly to their passengers, as the cruise industry has admitted in its argument that the additional $50 may cause passengers to curtail discretionary spending while in port. That seems unlikely for folks who, on average, will spend some $3,000 per head for their trip.

Measure 2 also will help level the playing field in terms of actual taxes the cruise companies pay at the state and local levels, and provide more disclosure about the on-board promotions that are paid for by local tour providers, trinket shops, bus lines and the like.

The cruise industry is taking credit for paying some $42 million a year in state and local taxes, but that number has been grossly exaggerated. For the years 2003 and 2004, the Northwest CruiseShip Association paid a total of $273,000 in state taxes, according to the Alaska Department of Revenue, and that amounts to but $136,500 for each of those years. The industry does pay several million a year in local property and sales taxes, but the bulk of the rest of the taxes for which it takes credit is paid by cruise passengers and crew. That hardly seems fair for companies whose annual profits are in the billions.

Measure 2 may reach too far with its stringent disclosure requirements for on-board promotions, but at the very minimum it seems fair for passengers to know the cruise companies recommend and promote specific shoreside companies because they are paid to do so - not because of the quality of goods and services that are offered. In Juneau, many smaller, privately owned businesses feel shut out - if not downright bullied - by the cruise companies because they simply can't afford to pay what they say is the industry's very high price of admission.

Buyers of homes, autos and investment services know exactly where their money is going, and that's not at all unreasonable with regard to consumer protection. Even the purchaser of a refrigerator expects a certain degree of protection for his investment. If Measure 2 passes, however, the Alaska Legislature may need to tweak this requirement at its first opportunity.

Measure 2 also calls for the cruise ships that visit Alaska to meet the same clean water standards that other industries must meet and that is only reasonable. Cruise ships are not required to have the same discharge permits that other businesses must have. The ships are monitored for fecal coliform and suspended solids, but oversight is minimal for other contaminants such as heavy metals, hydrocarbons and other substances found in items such as lubricants and solvents - especially compared to the far more rigorous standards that mines, fish processors and municipalities face.

Measure 2 isn't an attack on the cruise industry, as the industry has characterized it with ads suggesting that local schools will have fewer tax dollars for education if the measure passes. How would Measure 2 make for fewer tax dollars at the local level? Are the cruise lines going to stop coming to Alaska? Highly unlikely. Are they going to no longer stop in Ketchikan or Juneau? Highly unlikely.

The bill that voters will decide on Tuesday contains a lot and it is far from ideal as even its framers will admit. But with the Legislature as unwilling as it to has been to make the cruise industry pay its fair share, it's up to voters to take action.



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