Alaska Shipping Tax, Ballot Measure 2 (August 2006)

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The Alaska Shipping Tax Initiative, also known as Ballot Measure 2, was on the August 22, 2006 primary election ballot in Alaska as an initiated state statute where it was approved.
  • Yes: 81,693 (52%) Approveda
  • No: 75,432 (48%)

Ballot Measure 2 imposed a new $46 per voyage tax "on large cruise ships to pay for vessel services".[1][2]

A group called "Responsible Cruising in Alaska" supported Measure 2.

Aftermath

In 2009, an executive from Carnival Cruises said that the company is thinking about suing the State of Alaska over Measure 2. Carnival Cruises and others believe that the head tax imposed via Measure 2 is driving cruise ships out of Alaska and into waters that are more profitable because the cruiselines don't have to pay the extra tax.[3]

Cruise West, Princess, Royal Caribbean and Holland America have said that for the 2010 cruise season, they are redeploying ships from Alaska. 1,800 tourism-related jobs based in Alaska will be lost if this happens.[3]

Patti Mackey, executive director of the Ketchikan Visitors Bureau, believes the Measure 2 tax is hurting their economy. "I think Alaska has become a more difficult place for the cruise lines to do business. The tax and all of the associated regulations that were part of the ballot initiative are all part that equation, and certainly the economy right now isn't helping."[3]

Chip Thoma, president of Responsible Cruising in Alaska, and Joe Geldhof, a driving force behind Question 2, believe that Measure 2 is a net benefit to the state.

Ralph Samuels, vice president of government and community relations for Holland America stated that costs for Measure 2 "exacerbate" declining revenues that should be repealed. At a presentation given at Juneau Chamber of Commerce luncheon, Samuels said that declining revenue margins will result in cruise lines pulling their ships out of the state. Juneau Lawyer Joe Geldhof, author of the ballot measure, stated that Samuels was using "Chicken Little politics" by stating such ideas.

Gedhof elaborates: "People run around saying, 'The sky is falling, the sky is falling,' and after the chamber lunch, people say, 'The sky is falling we have to get something done'. Ralph is trying to create hysteria, to stampede legislators over the cliff and repeal the head tax."[4]

According to the state attorney general on September 22, 2009, a court challenge would not shake the foundations of the ballot measure, but could change the way the state legislators spend revenue from the tax. The attorney general made his comments before the legislative session began, and after cruise ship operators filed the lawsuit hoping to ban the tax on September 18, 2009. Cruise ship operators claim that the ballot measure is unconstitutional, citing a violation of prohibition against restraints on interstate commerce. According to the attorney general, "The economic benefits of the cruise ship industry to Alaska are clear, but so are the passenger impacts on the state. The 1 million visitors a year this industry brings is a huge influx in a short period of time. The state and local communities spend significant amounts of money to host these visitors."[5]

In a letter published by the Juneau Empire, Don Habeger, who claims to have “25 years of tourism experience”, states that the measure negatively effects Alaska’s tax and fee structures. Also among the concerns in the letter to the newspaper publication was that businesses would also feel the pressures of the measure when it came to tourism. Habeger states: “Ports such as Sitka, Whittier, Haines and Wrangell will feel the brunt of these reductions with decreases of 41 percent, 41 percent, 32 percent and 100 percent respectively. These are difficult reductions for communities that have built up businesses around this important industry sector.”[6]

The measure was again brought up towards the tail end of the 2010 legislative session, with questions arising if the tax should be reduced, cut, or simply kept the same. The $50 tax may be lowered to $46, if opponents get their way. According to reports, the Alaska Cruise Association has a lawsuit pending in the U.S. District Court over the issue.[7]

On June 24, 2010, Governor Sean Parnell signed legislation that lowered the $46 tax to $34.50, with additional savings of $15 for ships that stop in certain places in Alaska.[8]

Text of the proposal

The text of the proposal was as follows:

This initiative would impose a $46 per person per voyage tax on large cruise ships to pay for vessel services. It would provide for the proceeds from the tax to be deposited in the state general fund and, subject to appropriation by the legislature, distributed to municipalities. It would levy a tax on cruise ship gambling activities in state waters. It would change the way cruise ship corporate income tax is calculated. It would require cruise ship operators to gather and report more information, and get a new type of permit for sewage, graywater or other wastewater before discharging in state marine waters. It would assess a $4 per passenger berth fee and require large cruise ships to have state-employed marine engineers (Ocean Rangers) licensed by the Coast Guard to observe health, safety and wastewater treatment and discharge operations. It would authorize citizen lawsuits against an owner or operator of a large cruise ship, or against the Department of Environmental Conservation, for an alleged violation of any permit condition, provision of environmental statutes or performance of duties. It would also enable a person who provides information leading to enforcement of the law to receive 25 to 50 percent of fines imposed. It would impose additional requirements on disclosures about on-ship promotions of shore-side businesses.

Campaign expenditures

The group in favor of the shipping tax was called "Responsible Cruising in Alaska." They raised and spent just $8,497.

The group opposed to the shipping tax was called "Alaskans Protecting our Economy." They raised and spent $1,357,924, with the largest single donation of $1,344,244 coming from the Northwest Cruiseship Association.[9]

See also

Additional reading

References