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Cruise tax does effect state tourism future

Posted: Thursday, October 01, 2009

The Empire's "Attack On A Tax" article is a good beginning in educating its readership about the important public debate over our state's cruise tourism future. Sunday's article only scratches the surface of complex public policy as implemented by the Cruise Ship Taxation, Regulation and Disclosure ballot measure of 2006.

For example, the 2006 ballot measure seems to have the unintended consequence of disproportionally shifting port business away from certain municipalities. One would assume that all things being equal, a 15 percent reduction in passengers in 2010 would more or less mean a corresponding reduction in all the ports. However, we learn from Cruise Line Agencies of AK, in a report given at this summer's Southeast Alaska Tourism Economic Summit, that this is definitely not the case. Ports such as Sitka, Whittier, Haines and Wrangell will feel the brunt of these reductions with decreases of 41 percent, 41 percent, 32 percent and 100 percent respectively. These are difficult reductions for communities that have built up businesses around this important industry sector.

Another facet of this public debate is the cumulative effect of Alaska's tax and fee structure. Perhaps Tony Deangelo's comment about the state's $50 "head tax" would be different if the Empire first asked him to consider all of the taxes and fees he paid for on his recent trip to Alaska. For example, if his ship stopped at the ports of Juneau, Ketchikan and Skagway, he'd be paying his share of these local taxes and fees: a marine passenger fee, a port development fee, a port maintenance fee, passenger wharfage fee, wharfage fee, security fees and individual port's dockage fees. Added on to these local costs, he also would be paying his share of the state's excise tax, Ocean Ranger fee, corporate income tax and gambling tax.

Depending on which local port is considered, then allocating the state's 2006 ballot measure taxes and fees to this port of call activity, the 2007 single-season cost increase for doing business at an Alaska port of call for a large passenger ship ranged anywhere from 90 to 5,000 percent.

Perhaps it's these kind of cost increases that Micky Arison has in mind when he says "there is no question that the referendum had a significant impact."

Even these brief comments belie the depth of this issue, the need to continue public debate and the ballot measure's impact on Alaska's cruise tourism future.

Don Habeger

25 years tourism experience in Juneau

Juneau



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