Last session I sponsored legislation, HB 207, to tax cruise ship passengers at $100 a head. This tax raises $71 million to be used as follows: $10-12 million to Southeast cruise ship ports, $10 15 million to promote Alaska as a tourist destination, and the remainder to provide sorely needed help to education. My arguments in favor of my cruise ship head tax are straightforward and strictly financial.

• The cruise ship industry pays similar fees to foreign ports. For instance, local advertisements indicate that cruise ship passengers pay a tax of $115 to cruise the eastern Caribbean, $99 for the western Caribbean and $78 for the Mexican Riviera. They pay nothing for Alaskan destinations.
• Alaska is arguably the most beautiful place on the planet, and the cruise ship industry for years has visited the state and made a lot of money doing it. The cruise ship companies examined their own data and distributed a report claiming that cruise ship operations put their profits back into our local communities. Do they? A check reveals that much of the money reportedly generated by the influx of cruise passengers goes right back to the industry. Most of the money exits our economy in what the cruise industry calls "leakage."
• Let's follow the money. All or nearly all of the tours that the ships' passengers pay for are controlled directly by the ships' owners. In fact, Alaska tours are advertised on board the ship the previous day and the money for the tour is paid to the cruise ship purser before the ship even docks. Those Alaska businesses not on the cruise ship-approved list may be listed as "not recommended' and, therefore by implication "risky." The "approved" tours, those recommended by cruise ship owners, get charged a substantial fee (kickback) by the cruise owners. The ship owners state that their fee is reasonable since they collect the money for the operators. But the cruise owners decide which excursions and businesses get their recommendations. Those not recommended almost never get a single dollar from any cruise passenger. That leaves the cruise owners to control even the land revenue generated by the ship. Any businesses that complain are dropped like a stone from the recommended list.
• Next, the cruise ship lobbyists tell me that cruise owners are experiencing a net loss in profits, reportedly because of cancellations and decreased trip fees resulting from the events of Sept. 11, 2001. Again, is this truth or distortion? To get the facts, I checked the annual financial reports obtained from the industry leaders operating in Alaska. The reports show that while a net loss is true in some cases, the major owners are reporting a gross increase in revenues.
• So what happened to the money? It's simple. New boat orders are eating into their profits. For example, Royal Caribbean has commissioned five new vessels, Celebrity has commissioned one, and Princess Cruise Lines is anxiously awaiting the delivery of its Diamond Princess, expected to create an 18 percent increase in gross revenues. Furthermore, all of these industry leaders report plans to increase passenger space to Alaska, stating that there is an increased passenger demand for this destination compared with foreign destinations. It appears that any dollars reportedly lost by the industry are likely the result of paying for new ships, and their investment will undoubtedly be recovered by future operations.
• We should note that Alaska tourism organizations annually ask for increased state dollars for tourism marketing. But the cruise ship industry pays no corporate state income tax. Industries like oil, fishing, timber and mining pay an income tax. Phillips Cruises, operating out of Whittier, pays the tax, but the cruise ships, using the same waters, do not.
• Finally, I interviewed cruise passengers on the streets of Juneau, in the Capitol Building, and on Alaska Airlines flights when passengers returned home. Note a single passenger said a tax would have stopped them from traveling to Alaska.

It's time for cruise ships to pay their own way.

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