By Mike Bradner
Alaska Legislative Digest

Despite complaints voiced before the brief floor debate, the Senate unanimously passed HB-147, giving the Alaska Travel Industry Association a 20 percent reduction in the matching fund rate it must meet to access $9 million in state marketing support for the coming year. Sponsored by House Speaker Rep. John Harris (R-Valdez), the bill shifts the current 50/50 match to a 70/30 state/industry split for the next three years. This is good news especially for the shore-based tour industry, those not related to the cruise lines, who because of their small size, find the cost of trying to reach and direct travelers to their service beyond their limited means.

Sen. Kim Elton (D-Juneau) said he was voting for the bill reluctantly, and not encouraging others to vote for it, because of the industry’s repeated “excuse” that the passenger head tax imposed last year is a “tax” on the industry. Sen. Lesil McGuire (R-Anch.) called the bill a start toward more tourism marketing, but which may not go far enough.

Our comment: If cruise passengers perceive the tax is a cruise cost then it is a burden on industry in price. The real winners in this cruise ship tax game may be the grant recipient coastal communities. Constitutional litigation may require the state to eventually refund the tax, but to be sure the communities won’t have to refund grants.

State regional cruise impact study: There was $350,000 appropriated to the Department of Commerce and Economic Development for a “cruise ship impact study. There may be two drivers here, both related to possible tax litigation. One is to identify a rationale for the distribution of the “Regional Cruise Ship Impact Fund” into which a portion of the cruise ship tax head tax is paid. A second driver may be the collection of data for the defense of collection and distribution of the tax to points some distance from vessels.

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