Alaska Passes Reduction in Controversial Cruise Tax

Alaska Governor Sean Parnell signed legislation lowering the state's tax on cruise passengers in a move aimed at bringing more ships back to Alaska and settling an industry lawsuit over the fee.

The Alaska Cruise Association has blamed the $46 head tax and the state regulatory climate, at least partially, for the loss of three ships—and an estimated 140,000 passengers—this season.

With Parnell's signature, the head tax will drop from $46 to $34.50, with deeper offsets for ships stopping in at least one of two popular ports, Juneau and Ketchikan. Voters had approved the tax in 2006, with supporters seeing it as a way to help cover the cost of infrastructure needed for large ships coming to port.

But the cruise association argued the tax is onerous and unconstitutional, and sued the state. The legislation signed Thursday addresses how infrastructure money is divvied among ports of call, winning over some early critics who didn't want infrastructure to suffer. It also calls for the cruise association to drop the suit.

Tourism and industry officials called the reduction an important first step, and John Binkley, president of the Alaska Cruise Association, cautioned against expecting too much, too fast.

Cruise lines have already made their plans for next year. And while there are some bright spots—three lines, including Disney, have announced plans to bring in new ships—the lineup for 2012 won't be finalized for months.


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