JUNEAU, Alaska -- As expected, Alaska Gov. Tony Knowles submitted a bill to the state Legislature that would impose a $30 tax on passengers on all cruise ships in Alaska waters.

Knowles said he hopes to collect an annual $20 million in revenue from the cruise industry as part of his plan to balance the state's budget, which faces a gap of $1.2 billion this year.

The bill includes a provision that would impose a corporate income tax on the cruise industry if an approved passenger tax is struck down by the courts.

The tax would apply to passengers who stay overnight in Alaska on commercial ships, but not to vessels with less than 12 berths or to state ferries.

Knowles likened the proposed tax to a hotel bed tax, describing it as "a reasonable way for a state to recoup some of its expense in maintaining the infrastructure that helps serve the visitor industry."

Michael Crye, president of the International Council of Cruise Lines, asked, "What services are being rendered by the state of Alaska that would justify the $30 per passenger head tax?"

"I think it's unfortunate that the governor would choose to balance the state books on the backs of the cruise-ship passengers," he said.

State Senate majority leader Loren Leman (R-District G) acknowledged there might not be sufficient support in the Senate to pass the bill this year, although "it probably would be in the best interest of the industry to accept this rate."

Leman, who opposed a $50 per-person tax when it came to the Senate a couple of years ago, supported a compromise $10 per-person tax last year.

John Hansen, executive director of the North West CruiseShip Association, said his organization has been talking to legislators, stressing "the total amount of economic benefit that the cruise industry brings to Alaska -- about $700 million per year."

"We don't feel the additional head tax is justified," he said.

A spokesman for the Senate majority said its president, Rick Halford, supported a head tax in the past and believes a cruise-ship passenger tax might be one of the more palatable new taxes this year.


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