Cruise ship tax headed for '06 ballot

Measure institutes $50 head tax plus 33 percent tax on onboard gambling

Posted: Sunday, December 19, 2004

A citizen's initiative to tax the cruise ship industry and enforce stricter environmental standards has been approved by Lt. Gov. Loren Leman for the August 2006 primary.

The initiative would institute a $50 head tax and a 33 percent tax on onboard gambling revenue, and would subject the industry to Alaska's corporate income tax.

It also increases fines for illegally dumping waste from $500 to $5,000 and requires cruise ships to hire marine engineers to monitor wastewater treatment and pollution control equipment.

Joe Geldhof, an initiative sponsor, estimated the tax could raise between $40 million and $65 million annually.

Geldhof said he expects certification of the initiative will prompt discussion of the issue in the Legislature next year. Lawmakers could pass a similar version of the proposal and remove the initiative from the 2006 ballot.

"The cruise ship industry might litigate whether you can even do this," Geldhof said, adding that he believes a judge would be reluctant to deny citizens the right to vote on the proposal.

Geldhof is legal counsel to a marine engineers' labor union, but he is not acting for it on this issue.

Taxing the industry could lead to a decline in cruise ship travelers visiting the state, according to John Hansen, president of the North West CruiseShip Association.

"We're very concerned about the elements of the initiative," Hansen said. "We believe it has significant implications for all of Alaska."

The industry has no plans at this time to challenge the initiative in court, he said, but added that he will talk to the Division of Elections to determine if the 23,312 signatures submitted to the state are valid.

The cruise industry sends about $800 million to the state annually through taxes, sales, shore excursions and visitors staying in hotels, Hansen said. The industry also is a good marketing tool for the state, he said.

"A lot of people first visit by cruise and then they come back," Hansen said.

House Majority Leader John Coghill, R-North Pole, said proposals last year to tax the industry didn't make it far, but the initiative might spark more discussion.

A bill last year by Rep. Carl Gatto, R-Palmer, would have instituted a $100 head tax and Gov. Frank Murkowski submitted a $5-per-day tax, but neither was approved by the Legislature.

"The petition drive itself might be enough to give it legs," Gatto said, adding that he doesn't support the industry tax but is open to discussion. "If we're going to say come to Alaska, and just tax one segment, I don't know if that's wise."

• Timothy Inklebarger can be reached at

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