Phillips vows to kill cruise ship tax

Posted: Sunday, April 23, 2000

JUNEAU -- A House lawmaker who recently proposed imposing new taxes on the public and the state's industries promised Friday to kill a proposed $50 head tax on cruise ship passengers, calling it a horrendous attack on a single industry.

The tax passed the Senate this week after Senate President Drue Pearce accused the cruise industry of killing her proposal to bring its ships under the state's oil spill response law.

''I look at that as a very regressive attack on one industry,'' said Gail Phillips, R-Homer, who plans to bury Senate Bill 308 in her Special Committee on Economic Development and Tourism. She decorated the door of her office with a 4-foot-long banner that read: ''SB 308 has run aground.''

The committee is not expected to meet before the Legislature's scheduled adjournment next week.

Earlier in the session, Phillips called for new taxes to extract $100 million from industry and $250 million on the public as part of a plan to fill the state's budget gap. She offered no specifics then, although she said Friday that a seasonal sales tax was a more appropriate tax on tourism than a $50 head tax.

''You don't extort an industry that's just getting started,'' Phillips said. Cruise ships now bring more than 600,000 tourists to Alaska each year.

Phillips' announcement drew a sharp response from Pearce, who warned that ''nothing is dead until sine die,'' referring to the Latin phrase used to end the Legislature's session.

''This is an industry that pays no taxes in Alaska, using a resource that we receive no royalty on,'' said Pearce, R-Anchorage.

The tax would be comparable to fees charged by ports elsewhere in the world, Pearce said, because it would cover several ports visited on a given voyage. Her proposal would preempt local charges such as the $5 head tax approved by Juneau voters last year. The state would kick back $5 to each of the first five towns a passenger visited.

The tax would raise more than $30 million, with the state's share earmarked for the operation of ports and harbors.

Pearce also noted that cruise ships charge hefty commissions for selling shore-based tourist excursions such as helicopter sightseeing tours.

''Alaska businesses are having to pay the cruise ships 20 to 25 percent to allow their passengers to come through their doors,'' Pearce said.

If Phillips succeeds in killing the tax, she would also kill the rest of Senate Bill 308, which would require cruise ship vessel owners or operators to give the state monthly reports on treatment, storage and release of air contaminants, sewage, solid waste and hazardous materials.

However, even if the tax dies this session, it will likely resurface. Phillips is not running for reelection this year, while Pearce and other senators who support the tax as a way to ease the state's budget problems without taxing Alaskans will be back next year.

''Our comfort level goes up a lot when we tax people we don't know,'' said Sen. John Torgerson, R-Kasilof, who supported the bill.



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