The $50 head tax issue was before a House Judiciary Committee meeting in Anchorage, a meeting which included extensive discussions in an executive session with State Attorney General Dan Sullivan and other attorneys. Of significance is that the “political freeze,” around the tax issue and its legality (constitutionality) seems to have thawed.

  • Despite the legal issues, and prospects of repayment (refund), the issue was treated as “not to be discussed,” by Gov. Palin, and legislators requesting formal input from the attorney general found themselves blocked by Palin.
  • Note: The AG did communicate unofficially with the Finance Committees regarding projects in past budgets, which perhaps is indicative of the Department of Law’s concerns with the legal issues of the tax and its funding.

However, the testimony prior to that executive session turned a lot of cards face up on table, providing a pretty good read of how this poker game might progress, and including that all parties agreed there are substantial legal issues with the head tax. The discussion reflected that considerable talks between the parties had already taken place.

Note: The Alaska Cruise Association has challenged the legality of $46 of the entry fee in Federal District Court.

Given that this tax challenged well-recognized constitutional prohibitions, it is interesting that it escaped discussion for so long. However, all initiative-passed laws are touchy for lawmakers to alter. Politicians know the public needs time to grasp an issue.

The industry suit cites as causes of action: (1) violation of the tonnage clause of the Constitution, (2) violation of the Supremacy Clause, and (3) violation of the Interstate Commerce Clause. The action also says “motivation” behind the tax is clear from statements of the proponents, and also say it is applied unequally between cruise ships and others, i.e. our large state ferry Kennecott.

The initiative proponents (Responsible Cruising in Alaska) were present at the Judiciary Committee session, and presented material that surprisingly agreed with substantial portions of the complaint, especially with regard to the uses of proceeds for projects. One document they presented was a letter to Gov. Sarah Palin just prior to the end of the legislative session this year (April 10), in which they listed projects in tiers of qualifying, (1) qualifying with federal criteria, (2) projects problematic (3) those that may be inconsistent with the law, and (4) projects obviously likely to be inconsistent with federal law.

Source: The Bradner Report

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