Juneau starts collecting cruise ship head tax

Posted: Thursday, May 11, 2000

JUNEAU (AP) -- As the first cruise ships dock in Juneau, municipal leaders are deciding how to spend the city's new $5 passenger head tax.

Nearly 70 percent of the municipality's voters said yes last October to an initiative requiring the tax. The fee kicked in when the first major cruise ship docked on Saturday.

''The law is in effect,'' said City Manager Dave Palmer. ''It's accruing. They have 60 days to send in the checks.''

The tax is expected to generate $3 million from approximately 600,000 cruise ship passengers and initiative sponsors say they're generally pleased with the results.

''The sound of the cash register for the city and borough government is always pleasant, as long as it's not coming out of residents' pockets,'' said Greg O'Claray, business agent for the Marine Engineers Beneficial Association, which represents city employees.

The city is deciding how the money will be spent. Palmer will submit a project list to a passenger fee proceeds committee. That committee will submit its suggestions to the municipal assembly.

In response to the head tax, Holland America Line Westours last November halted a giving program that handed out about $300,000 to Juneau charities over the past 10 years. Also, Princess Cruises announced it would shorten its ships' visits in Juneau in response to the head tax and other community concerns.

However, a threatened legal challenge to the tax has not materialized.

John Hansen, president of the North West CruiseShip Association in Vancouver, British Columbia, last year questioned how the city could legally charge a passenger fee without providing a direct service in return. He also said the city had singled out cruise ship passengers while exempting riders on Alaska Marine Highway ferries.

Hansen on Wednesday said the association is waiting to see how the city will spend the money.

''We agree with the legal counsel for the city of Juneau about his interpretation on how the money should be spent on infrastructure to deal with the impact of the industry and on things that make the visit more attractive,'' Hansen said.

According to language adopted by the assembly, proceeds from the head tax must address impacts caused by the cruise ship industry.

That could include capital improvements, operating funds for services received by passengers, beautification to enhance city cruise ship facilities, or analyses to manage the impact of passengers.

That language irks another of the initiative sponsors, attorney Joe Geldhof.

He said the money does not have to be spent close to the docks to be legally defensible. Geldhof believes the city is free to spend the tax any way it likes, just like an excise tax on cigarettes.

''It doesn't mean 100 percent of the tax has to go for treatment for people with nicotine addictions,'' Geldhof said.

Geldhof said ideal projects in his mind would be a downtown visitors center or a golf course, which the cruise ship industry has requested in the past. Geldhof said he does not play golf, but a course would benefit both visitors and residents.

Tax collection will fall to the Juneau harbormaster, who already oversees collection of docking and port fees.

Cruise ships will be required to submit a report listing the number of paying passengers. The city will not collect for passengers boarding at Juneau, crew members or nonpaying passengers.

Finance Director Craig Duncan said many of the cruise ships already report lists of passengers to the National Park Service for cruise ships that enter Glacier Bay. Duncan said the city has the right to compare the list with the passenger manifest to ensure accurate reporting.

Ships with accommodations with for 40 or fewer passengers are exempt from the tax, as are noncommercial ships.

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