The cruise lines that operate in Alaska will contribute less money this year to the Alaska Travel Industry Association, so the association is turning to the state legislature to pick up the slack.

The ATIA has asked the legislature to help bring the association to its previous budget level by increasing the amount it contributes to the ATIA's fiscal 2009 budget, which begins July 1.

The decrease in funding from the cruise lines is due to the additional taxes slapped on the industry by a citizens' ballot initiative in 2006, the ATIA said.

Ron Peck, president and COO of the ATIA, said that the cruise lines are contributing to the ATIA's marketing programs and sponsorships at higher levels than they previously did but that their voluntary contributions will decline in fiscal year 2008 by two-thirds, to just over $611,000.

"Because of the Cruise Ship Ballot initiative passed in 2006, the industry will be taxed approximately $60 million to $100 million," Peck said. "It is understandable why the cruise lines would not continue with the voluntary cruise participation. Four years ago there was not a single targeted statewide tax on the visitor industry.  Today there are not one or two but five."

In August 2006, voters narrowly approved a ballot measure that levied a $50 head tax on cruise passengers sailing in Alaska waters and also subjected the cruise lines to a host of new taxes and environmental rules. The levies included a 33% tax on onboard gambling operations in state waters, a state corporate income tax on marine revenue and an ocean ranger tax, which provides for Alaska ocean rangers to monitor and enforce environmental statutes.

Peck also cited a tax on the car rental industry.

"Our position is that in light of the spate of additional taxes, it is altogether important and appropriate for the State of Alaska to, in fact, readdress the funding model for tourism marketing and reinvest a portion of the taxes that they are now collecting from the visitor industry," he said. 

Peck said that the ATIA has asked the state legislature to change how much the state gives in private industry matching contribution levels, which are currently set at 50-50.

Peck said that the ATIA would raise about $2 million in private contributions in fiscal 2009 and is asking the state to contribute $8 million to the core marketing program, or an 80-20 match.

Marketing help continues

The cruise industry gave the ATIA $624,939 to participate in the association's marketing efforts, advertising and participation in public relations efforts. 

Peck said that cruise lines collectively are the single biggest private sector participants to these efforts. He said the money also goes to sponsorships, including the ATIA's annual convention and donations of cruises to a number of fund raisers.

Due to federal law and cruise ship initiative ballot language, only one of the taxes being collected from the cruise industry could theoretically be disbursed for ATIA's marketing programs, the corporate cruise income tax.

Peck said that the state currently identifies car rental taxes as revenue that could be put toward the group's core marketing program.

The ATIA president said he hoped that the Alaska legislature makes a decision by the end of March.

To contact reporter Johanna Jainchill, send e-mail to [email protected].


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