Tax the tourist?

By Anita Dunham-Potter

Travel columnist

updated 1:36 p.m. ET July 28, 2006

The scenes are breathtaking: blue glaciers, gigantic snow-capped mountains and soaring bald eagles. They are picture-perfect images of Alaska, and tourists love them. But are cruise visitors willing to pay more taxes for the experience? Some political and environmental activists in Alaska say, ”Yes.”

On August 22, Alaska voters will go to the polls to vote on Ballot Measure 2, more commonly referred to as the “cruise ship tax,” a proposal to significantly increase taxes on cruise lines and their passengers vacationing in the state. If the measure passes, it could add hundreds of dollars to every passenger’s cruise bill. The measure has divided the electorate and is being closely watched by cruise lines, tour operators and their employees, who vehemently oppose it.

Thank you for visiting, now pay up

Ballot Measure 2 qualified for the August 22 ballot when California-based environmental group Bluewater Network gathered the necessary number of signatures from Alaska voters. The measure is also sponsored by Responsible Cruising in Alaska, a Juneau-based group; the Campaign to Safeguard America’s Waters, an Alaska-based project of the Earth Island Institute; and Karen Jettmar, director of Equinox Wilderness Expeditions.

The goal of the initiative, sponsors say, is to protect Alaska’s water quality, fisheries, port communities, and maritime infrastructure and to establish what they call a “fair taxation policy.” At the core of Ballot Measure 2 is a group of four tax measures:

• The first measure would impose a $46 tax on every cruise passenger to improve port and harbor facilities and to support commerce and regional tourism.
• The second measure would impose an additional $4 tax on every cruise passenger to cover the cost of an “Ocean Ranger” on each ship to monitor emissions.
• The third measure would impose Alaska’s 33 percent gambling tax on cruise ships’ gambling operations while in state waters.
• The fourth measure would subject cruise lines to state corporate income tax.

The head tax has been proposed before, most recently in 2002 when former governor Tony Knowles unsuccessfully called for a $30 head tax to help balance the state’s budget. According to the North West CruiseShip Association, if the head tax passes this time, Alaska will become the only state in the union to charge people for visiting.

“Trojan horse” provisions

“This measure is nothing more than a special interest effort to attack Alaska’s economy,” says Robert Scherer, owner of the Great Alaska Lumberjack Show in Ketchikan. Scherer points out that Alaska businesses have thrived since the cruise industry expanded its operations in the state.

MSNBC.com Travel   Had a good cruise lately? An awful one? What's your dream cruise? Share your story.

Scott McMurren, publisher of the Alaska Travelgram and “The Great Alaskan TourSaver” and a weekly travel columnist at the Anchorage Daily News, says the initiative is a classic case of taxing the other guy, and he disputes the suggestion that the cruise lines neglect the environment. “When it comes to environmental standards, cruise ships have higher wastewater standards than the state’s ferries and many coastal communities in southeast Alaska,” McMurren says. He calls the bill a “Trojan horse” full of provisions that create more government bureaucracy and a lot of collateral damage.

Indeed, the “Ocean Rangers” provision would create a new state jobs program, a program that would be redundant since it would duplicate the work of the Commercial Passenger Vessel Compliance Program, a state environmental initiative that is already funded by the cruise lines. And it is true that Ballot Measure 2 contains some very odd provisions. One would require the cruise lines to disclose any markups or commissions they receive when passengers book a shore excursion through the cruise line. McMurren sees this as an attempt to encourage passengers to book excursions direct from the local tour operator, and he worries that this practice could result in visitors unwittingly hiring tour operators who do not carry the mandated liability insurance.

Scherer is equally perplexed by the disclosure provision. “It goes against basic free-market principles,” he says. “This would be similar to walking into a store and seeing the price the store paid and the price you as the consumer pays.”

Another disturbing section of the bill would allow Alaskans to report violations of the law and receive up to 50 percent of any fines collected. Worse, when citizens succeed in collecting the money, they would have to split it 50-50 with the lawyers who file the suit. “Clearly, this is an incentive for frivolous lawsuits against cruise lines,” McMurren says. “There’s something in the bill for everyone to hate — except lawyers, who authored the bill.”

MORE FROM CRUISING

Cruising Section Front

Luxury cruising, up a notch Top 10 river cruises around the globe Aye, aye cap’n! You can’t refuse these bargains Costa Cruises new dynamic duo Cruising for commitment phobes Noisy Carnival ship ruins family cruise Surprise flight changes separate cruising family Top 5 cruise ship spas Swine flu, fear spread aboard cruise ship Oh, baby! Cruise takes a pregnant pause Cruising Section Front   Add Cruising headlines to your news reader: