A marriage of convenience: government and cruise industry form lucrative bond despite some community protest.

• Author: Christianson, Susan Stark

Although a favorite pastime of some Alaska residents is to com- plain about tourists invading their favorite camping spot or watering hole, a recently released report painted a positive picture of the cruise industry's impact on Southeast Alaska.

A significant conclusion was that Southeast Alaska's local governments recur relatively few expenses when providing services to cruise lines, passengers and crew. In general, communities are able to provide basic services within their existing staffing and service infrastructure.

The report, prepared by the Juneau consulting and research firm McDowell Group, Inc., showed that cruise passengers spent about $160 million in Southeast Alaska in 1997. About $120 million of that was taxable spending in the communities of Ketchikan, Juneau, Wrangell, Petersburg, Sitka, Haines and Skagway, as well as the Ketchikan and Haines Boroughs.

"The bottom line is that the industry doesn't have dramatic impacts on local governments," said Jim Calvin, managing partner at the McDowell Group. "In fact, local governments are able to provide goods and services within the infrastructure that is developed to provide the same services to residents. In the larger communities, revenues exceeded local government cost by 3 to 1."

Region-wide, local government revenue generated by the cruise industry totaled $10.2 million in 1997, while related local government cost totaled $3.3 million, according to the McDowell report. Only Wrangell spent slightly more on visitors than the community took in from industry related revenues.

"The reason Wrangell was the exception," Calvin said, "was that a large portion of cruise visitors stay there only a short time."

In addition to passenger spending, the report showed that crew aboard the ships generated an additional $10 million in taxable spending region-wide in 1997. Taxable spending in support of cruise line operations totaled just under $10 million in 1997, with another $18 million spent on maritime services, medical services, state/federal government fees and other non-taxable services.

Sales tax revenues generated as a result of all cruise-related spending totaled $7 million during that same year, while port fees brought another $3.2 million into government coffers.

McDowell prepared the report at the request of Southeast Conference, a consortium of the region's governments. According to Berne Miller, executive director of Southeast Conference, the study was ordered after a...