http://www.juneauempire.com/stories/030408/sta_253600132.shtml
Tuesday, March 04, 2008
Story last updated at 3/4/2008 - 9:55 am
Senate mulls head tax change
By Kate Golden | JUNEAU EMPIRE
Alaska senators are considering a bill that would alter a cruise ship
head tax citizens approved in 2006.
Critics complain the tax is being changed even before the first
revenue from it has been distributed.
"They're trying to roll back the initiative," said Juneau attorney Joe
Geldhof, who was one of its sponsors. "It's at least premature."
On the Senate floor Monday, legislators amended the bill so it would
be effective in 2009 instead of being retroactive and returned it to
the Rules Committee.
As a result of the cruise ship ballot initiative, the state collects
$50 per passenger from cruise ships that visit Alaska. Of that
revenue, $4 pays for an Ocean Rangers environmental monitoring
program. Another $5 per passenger goes directly to each of the first
five ports visited. The rest goes into the general fund and is
intended for cruise-ship-related infrastructure improvements. Juneau
and Ketchikan opted out of receiving those state funds, and instead
levy their own head taxes on top of the $50 state tax. They charge $8
and $7 per passenger, respectively.
Last year about 1 million cruise ship passengers stopped at Alaska
ports, so the state collected $50 million.
Senate Bill 168 effectively caps the total passenger tax at $50, and
cities such as Juneau and Ketchikan would be paid out of that money
for the passenger taxes they levied themselves. The bill sets the
maximum rebate to cities at $10 a passenger.
The bill is sponsored by the Senate Finance Committee, which is
chaired by Sen. Bert Stedman, R-Sitka.
Other supporters of the bill include the mayors of Juneau and
Ketchikan, the cruise ship industry and Alaska cities such as Seward,
which hopes to levy its own head tax in the future.
Supporters say it's too difficult for cities to obtain funds from the
state revenue pool created by the tax, partly because federal
legislation limits how cruise ship taxes can be spent. Communities
that don't get cruise ship visits yet and want to build infrastructure
to invite them might not be eligible for the money.
Ketchikan Mayor Bob Weinstein told the Senate last year the cruise
ship money was idling in the general fund as a result.
The problem is hypothetical so far. Since last year was the first in
which the money was collected, none has been appropriated yet for
projects.
Of last year's pot, $744,000 has been distributed directly to ports,
according to Jerry Burnett, director of administrative services for
the Department of Revenue.
The Department of Revenue opposes the bill because it would reduce the
total amount of tax money the state has to spend, Burnett said.
Sen. Hollis French, D-Anchorage, agreed that the general fund money
should be easier to access. But he said this bill was the wrong
solution to that problem because of its other consequences.
His worry is that cities that get cruise ships now would impose head
taxes or raise the ones they have, and the money would be taken out of
the state fund until there was little or nothing left for other
cities.
"Communities that don't get direct visits will quite likely not get
any direct impact aid," he said.
Opponents of the bill say it would ultimately cause infighting among
cities, which might try make sure they attract cruise ships with the
lowest taxes. Creating a state revenue pool allows cities to create a
unified front against the cruise lines that might threaten to leave a
town if passenger taxes are raised, according to critics.
"That's one of the reasons we wrote the initiative, to avoid the
competition between ports," Geldhof said.
He cited the example of Whittier, which repealed a $1 head tax in
April 2003, after Princess Cruise Lines told the city it would stop
visiting if it had to pay the tax.
• Contact reporter Kate Golden at 523-2276 or
kate.golden.RemoveThis@juneauempire.com.
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