City officials in Ketchikan are proposing changes to the city’s per-passenger tax for cruise ship visitors. There’s been pushback from the cruise industry.
The proposal itself wouldn’t raise the amount fees levied on cruise passengers visiting Ketchikan. But it would tweak how the city assesses it. And that’s important. Because according to a Juneau attorney retained by the city council, it could give the city more flexibility on how it spends the millions the city usually collects when there are cruise ships in town.
But the change has been met with opposition from the cruise industry and some local business owners whose fortunes are tied to cruise visitors.
Christa Hagan works for Taquan Air, which runs sightseeing flights out of Ketchikan. She said now isn’t the time to make things more difficult for the industry.
“I think that right now, it’s poor timing. It feels as if it’s [an] attack on the industry that is suffering. And they’re doing everything they can to resume sailings,” she said. “And we want to continue to show partnership, and I think this is in conflict with that partnership.”
CLIA Alaska — the state chapter of the international cruise industry’s trade association — wrote a letter saying it felt blindsided by the proposal.
CLIA Alaska’s Chairman Charlie Ball said the industry is concerned that cruise lines wouldn’t be able to deduct Ketchikan’s head tax from the state passenger fee which is capped at $34.50. That, he said, would add to the cost of cruise ships calling into Ketchikan’s downtown berths by $9 per passenger.
He also disputed Juneau attorney Robert Blasco’s assertion in a written memo to the council that the change would increase flexibility on how head tax money is spent.
CLIA sued the City and Borough of Juneau in 2016 over this very issue. A federal judge ruled that the fees are legal but have to be tied to the marine operations of the vessel. In other words, financing port infrastructure is legal while subsidizing crossing guards to disembarking cruise passengers is not.
The letter ends by suggesting that the city sit down with industry representatives to negotiate an agreement.
Russell Thomas, who runs two local tour companies, suggested the City Council negotiate directly, just as officials in Juneau have done.
“Now that there is an established procedure that appears to be acceptable to the cruise lines and seems to be working for Juneau, wouldn’t that be a reasonable template to approach the cruise lines with for use in Ketchikan?” Thomas said.
He was joined by nearly a dozen other local tourism industry figures in speaking out against the head tax proposal at the meeting.
Royal Caribbean executive Preston Carnahan said the cruise line is willing to sit down with the city and negotiate how port fees and head tax is spent.
“We understand as a company that there are important city matters related to finance, infrastructure and community well-being that are tied to cruising and the impact our guests have on your community,” Carnahan said.
Only one resident, Mary Stephenson, spoke in favor of the head tax proposal. The one-time city council candidate said the cruise lines don’t have standing to say how the money’s spent; because it’s their customers that ultimately pay.
“This fee is not paid by the cruise ships, it is passed along to the passenger under the title of government taxes and fees,” Stephenson said.
Ketchikan’s City Council voted to defer the proposal to give city officials time to meet with cruise industry figures. Neither the city attorney nor Juneau attorney Robert Blasco returned requests for comment on Monday.
Correction: An earlier version of this article incorrectly said the proposal would be debated at a special meeting this week. No special meeting has been scheduled.