Parnell bill would cut head tax by almost 60 percent

March 26, 2010

Cruise ship operators have pulled some of their boats from Alaska's waters, citing the high tax. (File/KTUU-DT)

by Ted Land
Thursday, March 25, 2010

JUNEAU, Alaska -- Gov. Sean Parnell introduced a bill Thursday to reduce the cruise ship head tax, and it goes deeper than some previously thought.

Parnell is hoping for about a 59 percent reduction in the head tax.

He laid out his plans and other priorities for the rest of the legislative session during a wide-ranging press conference Thursday morning.

The bill would reduce the cruise ship head tax from $46 per person to $34. There are further cuts to make up for local head taxes in Juneau and Ketchikan, which would bring the final head tax to $19 per person.

The bill also provides income tax credits to companies that contribute to Alaska tourism marketing.

"You can show a picture of Alaska to almost anybody in the world and it creates the desire to come here and that is what's so important about those marketing dollars," Parnell said.

He says at least one cruise line will hold off on planning next year's routes to see what the Legislature does this session.

Parnell suspects others are doing the same.

A significant number of lawmakers say they just don't buy the notion that cruise ships are avoiding Alaska simply because of the head tax.

Others say the tax is excessive and an easy fix to attract boats during a recession.

Parnell also addressed the multiple natural gas pipeline proposals gaining momentum in the Legislature.

Parnell says he supports House Speaker Mike Chenault's in-state plan and thinks such a project could work in tandem with a large-diameter line through Canada.

"I want to keep both of those paths open until we know that one or the other is not going to work," Parnell said.

He did say that he's concerned about reduced funding for the Alaska Gasline Inducement Act in the operating budget, which is currently in the Senate.

"The result of saying that you're going to set aside a project, the result will be that that pipeline project is gone," Parnell said.

Parnell still wants to change the state's oil tax structure to make it more attractive to producers. The issue has lost momentum among some lawmakers.

"I went to the House Majority this morning and said this is a way that we can move forward and drive economic growth in our state and I asked them to move it," Parnell said.

Contact Ted Land at tland@ktuu.com

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