By Max Mertz and Linda Thomas
If the cruise initiative supporters are successful, we will have, at best, 370,000 cruise passengers per year. The last time Juneau had fewer than 370,000 cruise ship passengers was 1994, over a quarter of a century ago. We generated $26.8 million from our 5% sales tax, and our property tax mill rate was 14.02. Total tourist spending in Juneau was $107 million back then. Our State government was robust with 28% of total employment.
By 2019, CBJ experienced a 15% decrease in state employment from 1994. State employees are now 20% of our local employment and still a critical sector of our economy, but economic diversification has enabled us to support Juneau as a capital. We have almost doubled our sales tax without a rate increase, up to $49.2 million and our property tax mill rate decreased 24% since 1994. How did that happen? In large measure we can thank the growth of our tourist sector and its now $329 million in total spending.
The initiative supporters say that they support “appropriately-sized” tourism, but by whose definition? They don’t define what that means, but most importantly you haven’t had a say in it. Our assembly appointed a visitor industry task force that recently completed its work. Whether today or tomorrow, our public policy around our economy, and certainly tourism, needs to be managed by our local government as directed by our elected leaders. The proposed initiatives undermine all of the work of the task force and TBMP (tourism best management practices) to help ensure that that the cruise impact on Juneau is as positive as possible for all of us.
During the early 1980s and early 1990s our city leaders recognized the need to diversify Juneau’s economy away from state government and we embraced the opportunity that cruise tourism presented. Certainly, there has been bumps in that growth, but Juneau has enjoyed tremendous value that the growth in tourism has brought to our community in the last 27 years. Where would we be without tourism? What would you pay in property tax? Would our hospital be as viable as it is? Our docks and harbors? Would we enjoy the dining opportunities we have? Would we enjoy the shopping opportunities? Would we enjoy the access opportunities afforded by Alaska Airlines’ frequent service? Would our streets and sidewalks be in the reasonably good shape they are in today?
Over the past twelve plus months of this pandemic, massive amounts of federal stimulus have indeed significantly reduced the impact of the pandemic. But that stimulus will soon come to an end. The CBJ government normally enjoys over 20% of its sales tax, better than $10 million, from tourism. An additional $16 million comes in the form of passenger fees and other taxes. Much of all of these funds support the general government. Take this away? Be ready for cuts in our government services.
And what about the restaurants and shops we all enjoy? Do you think the restaurants will survive if the cruise ships all leave port by 7 p.m., and their passengers have to leave to get on the boats two hours earlier to allow for the ships to phase out of the harbor? And in 2026, when the entire 100,000-plus ton fleet is barred from our port, the damage will be even greater. What will happen to our economy if we lose say $200 million in tourism spending? No part of Juneau will be unaffected. Independent tourism won’t put even a small dent in reducing the effect.
We suppose the sky may not seem to be falling if you aren’t supporting your family directly or indirectly because of the cruise industry, or are an employee of our local government who could stand to lose their job if the revenue disappears. But for them, and much of Juneau who thrives on our economy, these are very scary prospects.
We, and the members of Protect Juneau’s Future, hope to engage in continuing respectful dialog now and for years to come to help manage tourism. Effectively eliminating it through these initiatives is not the way to do it. And you can help. Please don’t sign these initiatives.
• Max Mertz owns Mertz CPA and Advisor and has called Juneau home for nearly 30 years. He currently serves on the Steering Committee for Protect Juneau’s Future. Linda Thomas is CEO of Alaskan Brewing Company and a longtime Juneau resident. Columns, My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire. Have something to say? Here’s how to submit a My Turn or letter.
