Alaska Legislature Approves Bill to Lower Cruise Head Tax

April 16, 2010
Alaska Head Tax (8 p.m. EDT) -- Just four days before it's scheduled to adjourn for the year, the Alaska state legislature Wednesday approved a bill that will lower the controversial head tax from $46 to as little as $19.50 per person.

Although the base head tax will only be lowered to $34.50 per person, Terry Harvey, a spokesman from State Rep. Cathy Munoz's office, says cruise lines will be reimbursed an additional amount each time a ship calls in Juneau, Ketchikan or both. Refunds will total $7 per person for calls in Ketchikan and $8 per person for calls in Juneau; if a sailing calls in both ports (which 75 percent of Alaska cruises do), $15 per person will be refunded to the line, thus reducing the amount from $34.50 to $19.50 per person.

A representative from Princess Cruises tells us that, once the bill is signed by the governor, it won't go into effect until the end of October, meaning none of the passengers booked on this year's itineraries will be affected by the change. However, beginning with the 2011 Alaska season, the line hopes to avoid charging the additional $7, $8 or $15 to passengers in the first place. Royal Caribbean and Holland America both echoed those sentiments.

Last month, Alaska Governor Sean Parnell proposed the agreement to persuade several major cruise lines -- which claimed the tax was unfair and possibly illegal -- to drop a lawsuit they had filed against the state to contest the tariff, which was passed in a 2006 vote by Alaska residents as part of a larger initiative.

According to the Juneau Empire, the most recent bill passed in a 17-3 vote; the majority seems unsurprising, though, given the fact that Alaska expects to see 140,000 fewer passengers this year than it did last year.

Major lines like Royal Caribbean, Princess and Holland America have pulled ships from the region in the past couple of years -- a decline that could seriously impact already-suffering small businesses in the region. Juneau alone is expected to lose more than $25 million in revenue in 2010.

However, in spite of the change, the Juneau Empire also reports that not everyone is happy. Because other factors -- including a lack of proper marketing and promotion for the region, as well as the recently lackluster economic climate -- have also been blamed for Alaska's decline, it remains to be seen whether tourism (cruise tourism, in particular) will pick up in coming years.

But, Harvey is optimistic and states that the cruise lines have officially dropped the suit. He adds, "The next question is: Will we see some redeployment of vessels for 2012?" The agreement between Alaska and the cruise lines encourages, but does not require, lines to return cruise ships to the region.

We'll keep you updated.

--by Ashley Kosciolek, Copy Editor