Head Tax and the Cruise Ship Industry.

• Author: ORR, VANESSA

This year alone, over 630,000 passengers will travel to Southeast Alaska on a cruise ship. Arriving in the port cities of Haines, Ketchikan, Juneau, Sitka, Skagway and Wrangell, the ships will spend $10.2 million in local fees and taxes, support 4,154 jobs and finance an $81.1 million payroll. Over $179 million in sales revenue will be spread throughout the region.

But this influx of business has costs as well. Police and emergency services must be staffed to deal with the increasing number of visitors. Docks and harbors require increased personnel, as do city and state facilities like libraries and museums. Hospitals and clinics see more patients; recreational facilities receive more traffic.

While some communities view these expenses as the cost of doing business, others, like Juneau, have taken steps to raise the additional funds needed by taxing cruise lines--the industry that has the biggest effect on the city's infrastructure. In early October of 1999, Juneau voters adopted an initiative establishing a cruise-ship passenger fee of $5 per person, known as the Marine Passenger Fee, or "head tax." On the state level, the legislature recently looked at adding an excise tax for travelers on commercial passenger vessels of $50 per head.

Why the $5 Fee?

According to Juneau's Revenue and Taxation Code, the purpose of the fee is to "address the costs to the city and borough for services and infrastructure usage by cruise ship passengers visiting Juneau, including emergency services, transportation impacts and recreation infrastructure use, and to mitigate the impacts of increased utilization of city and borough services by cruise ship passengers."

"Essentially, the tax is supposed to go toward things nautical," summarized Jack Cadigan, president of the Destination Juneau Association. "A portion of the money will go into the General Fund for police and fire services, but beyond that, it is to be used directly for projects that ease and further enhance what the cruise ships use themselves."

According to Cadigan, this year's passenger fee will tally over $3 million. The money will be spent on items recommended by a five-person committee, made up of one person from the cruise ship industry, two members of the general public, and two nominees of the Alaska Docks and Harbors Board.

"I think that as long as what the fee s used for isn't pushed too far out of line, the cruise ships will bite the bullet and go along with it," said Cadigan. "But the...