Haines economy weathers loss of cruise ship traffic

Tax receipts increase, building permits on the rise

Posted: Sunday, October 14, 2001

HAINES -- A pair of business indicators shows the Haines economy is doing better than some had expected, given this summer's sharp downturn in cruise ship dockings.

The borough's August sales tax report shows a 10 percent increase in combined city and borough tax receipts compared to the same period last year, and the city is on track to issue a record number of building permits, according to a report in the Chilkat Valley News.

The $338,454 taken in by city and borough businesses includes $55,285 in new tour and lodging taxes. Without the new revenues, combined borough and city tax receipts would have been down 5 percent compared to the same period last year.

The figures seem to counter predictions of a major slump in the economy as a result of the loss this year of 52 Royal Caribbean cruise ship visits.

Last November, the company announced it wouldn't return for a third season. The company brought 79 percent of Haines cruise ship visitors in 2000.

Banker Dick Flegel said although businesses dependent on cruise passengers are hurting, others apparently aren't.

"The only thing I can think of is there are specific, very focused tourist businesses that did get hit hard, but maybe as a part of the whole it's not that cataclysmic."

Others are skeptical of using sales tax receipts as an indicator of the health of the economy. Borough Assembly member Terry Pardee said he doesn't trust analysis of the numbers.

"Figures can lie and liars can figure. The people I talk to are hurting," Pardee said.

Flegel said demand for new loans is down slightly at First National Bank, but that loan delinquencies have not increased.

"People are making their payments," he said.

Flegel said bank business has increased this year due to a drop in long-term interest rates for home loans, leading to a surge in refinancing home loans.

Tour and bed taxes drove a 63 percent increase in borough sales tax revenues in the August report. The borough's base sales tax rate is 1.5 percent. It collects an extra 4 percent on tours and lodging.

The special 4 percent taxes accounted for $55,285 of the $137,326 in borough revenues received in the August sales tax report.

The $45,306 in reported tour taxes indicates that local operators took in $1.13 million during the heart of the season. The bed tax took in $9,979, on $249,475 in revenues.

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