Letters to the Editor: Aug. 24, 2009

Alaska travel association scheme on tax credit is just 'welfare grab'

After reading Johanna Jainchill's story on the Alaska cruise passenger tax ["Recession, exodus of cruise ships have Alaskans rethinking head-tax plebiscite," Aug. 10], I have a few comments from an Alaska perspective. 

It was very appropriate to publish the legal analysis from the UCLA tax policy professor, Kirk Stark. Most of us who have read the Polar Tankers decision agree with Stark's analysis. The facts in the Polar Tankers tax case are significantly different from a case over Alaska's passenger excise tax.

Other recent court cases are also instructive. For example, the 2nd U.S. Circuit Court of Appeals recently affirmed a federal district court's ruling in the Bridgeport ferry taxation case. This case stemmed from the tax levied on passengers using the ferry from Bridgeport, Conn., to Port Jefferson, N.Y. The Bridgeport ferry authority was funding 100% of the authority's operations from a passenger fee, including activities that were way outside the scope of ferry operations.

The circuit court's decision actually gives good guidance to those of us involved with revenue issues related to passenger fees. A general rule of thumb, according to these recent court cases, is that if you collect excise fees from commercial ship passengers, then it is best to build primary infrastructure related to passenger/tourism activities, e.g., new wharfs, ramps, sidewalks, seawalks and adjacent marine parks.

Another obvious lesson here is that using cruise ship passenger or ferry passenger excise fees to fund a library far removed from the waterfront is problematic. Alaska is striking the right balance appropriating passenger fee funds within months to cruise ports for capital projects that directly assist ships and passengers.

Regarding Ron Peck and the folks at the Alaska Travel Industry Association, it is obvious that this group is bent on getting their hands on a multimillion-dollar tax credit, in lieu of the cruise lines' corporate income tax. When you get right down to the basics, this is nothing more than a sophisticated welfare grab by a narrow interest group that has not demonstrated much ability to promote tourism. But Peck and his ATIA pals are nothing if not persistent. They've been whining to the Alaska Legislature for years in an effort to obtain state-financed handouts. This latest tax credit wrinkle is a desperate attempt to get more public funding for their operations.

The tax credit scheme promoted by the ATIA is dubious public policy. The kind of public accountability and transparency that should accompany use of public tax funds would be eroded if the ATIA's scheme is adopted. The lack of accountability and transparency in the tax credit scheme, coupled with the ATIA's lack of creative marketing expertise and infirm record of producing genuine results, is part of the reason why long-time tourism observers in Alaska balk at the notion of giving the ATIA wads of public tax money.

The ATIA has been overpromising and underproducing for years in terms of marketing Alaska tourism. The ATIA uses convoluted metrics derived from other tourism sectors (cruisers, most obviously) to pad their anemic results and to then justify their unending demand for more money.

The most telling fact related to the ATIA's marketing skills is that the cruise lines have essentially stopped contributing any funding to the ATIA. Whatever one thinks about the cruise lines, they are extremely good at marketing and filling their ships. The cruise lines appear to understand that the ATIA doesn't deliver value in terms of marketing dollars.

The ATIA is really just a state-subsidized, make-work program that survives on squishy political sentiments about tourism, because few government programs in this modern world are held to any demonstrable standards.

Thanks for balanced coverage.

Joseph W. Geldhof
Counsel for Responsible Cruising in Alaska

Travel dreams are made reality by industry heroes

I read Richard Turen's column about his mother's botched travel dream, directly caused by the incompetent agent [Reality Check: "Weavers of dreams and nightmares," Aug. 3]. 

Of course, my heart ached over it.

Working with so many unheralded travel heroes who do make travel dreams a perfect reality for so many people most definitely fuels my daily existence.

Thank you for your story. No matter what task we perform within our industry, we all play a part in expanding horizons. I relish the fact that people such as Richard choose to be in it.

Keep writing, Richard, as I am one of many readers looking forward to your next installment.

Rose A. Hache, attorney at law

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