Anchorage, Alaska – Attorney General Dan Sullivan said Friday the Department of Law already is carefully reviewing the lawsuit by the cruise ship industry challenging the legality of the passenger excise tax enacted by citizens initiative in 2006. The lawsuit, Alaska Cruise Association v. Patrick Galvin, was filed Thursday in the U.S. District Court for Alaska.

“The cruise ship industry and the 1 million passengers who come to Alaska every summer contribute significantly to Alaska’s economy,” the attorney general said. “The Parnell administration will continue to work with the industry and Alaska businesses on ways to increase tourism and the economic opportunity it provides for Alaskans.”

Attorney General Sullivan said, “Today’s lawsuit, however, does not come as a surprise. The cruise ship industry has been threatening to sue the state ever since Alaska citizens voted to require passengers to pay their fair share of the costs of services and facilities provided to host them. The Department of Law will vigorously defend the state in this lawsuit.”

The Alaska Cruise Association filed the complaint with the United States District Court in Alaska seeking relief from a $46 fee imposed on the passengers of its member cruise lines as a condition of their entry into Alaska (the “Entry Fee”). The Alaska Cruise Association is an Alaska-based, not-for-profit organization. Information provided on its website states the association was established to build strong partnerships between local businesses, communities and cruise companies. Led by life-long Alaskan John Binkley, the goal of the association is to work with businesses and public leaders to improve community relationships, increase economic benefits for Alaskans and address environmental concerns.

The Alaska Cruise Association released prepared statements on how Alaskan businesses believe the $46 entry fee has affected them.

“Alaska is throwing road blocks while other countries around the world are opening up their doors. People don’t realize that these actions can be the tip of the iceberg and the industry can decide that they don’t need to come here anymore,” said Shuana Lee, Shore Excursion and Marketing Manager for The Great Alaskan Lumberjack Show in Ketchikan.

Steve Hites, President of Skagway Street Car said, “Absolutely negative. It has affected my business dramatically. We are losing three big ships and that will have a dramatic affect on my business for the 2010 season. The head tax has made Alaska less of a competitor all over the world. We have made it very difficult for the cruise ships to make any profit here. This is not because of the down economy; this is because we are no longer competitive with the rest of the world. The people who voted for this cruise ship head tax did not understand this industry.”

“We are down 20 percent. I believe it’s directly related to the $50 head tax. We have a lot of families who take our tour. Now people are not apt to take the tour we offer because it causes an additional expense,” said Karen Hess, Vice President, Chilkat River Adventures, of Haines.

Peggy Ann McConnochie, ACH Consulting, in Juneau, said, “The tourism economy is already in so much trouble. We can’t wait to do something. If cruise lines could see something being done on a local basis with head taxes, there is
potential for (a turn-around) in 2011.”

“The head tax is affecting Alaskans who sell services and products to cruise passengers. It’s onerous and the state should address it,” said Ron Peck, President, the Alaska Travel Industry Association.

Dave Kasser, Vice President of the Anchorage Convention & Visitors Bureau, said, “This industry needs to be coveted and accorded like any new industry that we would be attracting to Alaska. The state should be trying to make Alaska as attractive a destination as possible.”

Joe Mathis, Owner, Montana Creek Campground, of Susitna Valley said, “Every business person knows there’s a tipping point and we’ve reached it with the cruise ship passenger head tax. It’s driving visitors away from Alaska and that hurts small businesses like me. The downturn in overall visitor numbers, especially from cruise and the RV industry, has had a dramatic negative impact on Montana Creek Campground to the point that we are showing significant losses.”

The case is 3:09-cv-00195-RRB
Download Alaska Cruise Association v. Patrick Galvin (16-page pdf)

Source: Ketchikan Daily News

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