By WIN GRUENING
The recent failure of activists in Juneau to gain sufficient signatures to put yet another anti-cruise initiative on the ballot in October is evidence that local residents recognize the economic value of the industry.
This latest effort, to place a hard cap on cruise visitors, had legal, even constitutional issues, and undercut voluntary agreements between the city and the industry that were reached after years of citizen involvement and fruitful negotiations.
It wasn’t that long ago many believed there was no way Juneau could possibly support more cruise visitors, and that the community had finally reached an absolute limit. Since then, cruise visitation has more than doubled. Through technological improvements that limit ship emissions and voluntary mitigation strategies such at Tourism Best Management Practices, the City and Borough of Juneau has become a leader in managing visitor impacts.
Anti-cruise ship crusaders’ mantra has been that passenger numbers are unsustainable and will creep even higher. That simply isn’t possible. The five-ship limit, the rule against “hot-berthing,” and agreed-upon daily passenger limits, will prevent that. Furthermore, Juneau’s dock infrastructure and Gastineau Channel’s restricted maneuvering area cannot support the larger ships being built.
City and industry collaboration is the best way to enhance the benefits to our community while mitigating any social and environmental impacts.
The economic benefits of cruise visitors have become so embedded in the community that many residents may be unaware of them or just take them for granted. But they are significant and the Assembly ‘s penchant for spending can’t be satisfied without those dollars.
In 2023, Juneau commissioned a study by McKinley Research Group that outlines the economic impacts of cruise visitors. In that year alone, the cruise industry accounted for $375 million in direct spending in Juneau, $320 million of which is attributable to passenger spending; $39 million to cruise line spending; and $16 million to crew member spending. Expenditures were approximately evenly split between tour activities and retail/hospitality sectors.
Including direct and indirect impacts, Juneau’s cruise industry supported 3,850 jobs, $196 million in labor income, and total spending of $490 million in 2023.
But that isn’t all.
CBJ collected an estimated $22 million in cruise-related fees such as moorage and head tax revenues in 2023. The Assembly just approved a significant increase in docking fees that will raise an additional $2.5 million per year.
While some dock fees and head taxes are slated for cruise-related bond retirement and port improvements, a significant amount supports CBJ operation and administration. The CBJ FY26 draft budget includes millions of cruise dollars allocated to municipal departments such as Fire/EMS ($781,000), Parks & Rec ($862,000), Police ($1.3 million), and City Transit ($1.0 million) with lesser amounts to the Mayor’s Office, City Manager’s Office, Finance, Streets, and city harbors.
Additionally, an estimated $18 million in sales tax revenues resulted from overall cruise industry spending. Even though cruise ships visit only half the year, they now account for 25% of all sales taxes collected annually in Juneau.
While Assembly members can spend sales tax dollars on anything they choose to fund, it is unfortunate that they have done so, in some cases, contrary to wishes of voters. Voters have taken notice and have until May 30 to sign petitions now being circulated for three initiatives designed to restrain Assembly spending.
Not included in these numbers is the sizable amount of property taxes that are collected from visitor-related businesses that cater to the ships. Restaurants, tour companies, retail stores, and more pay property tax and, in many cases, would not be open year-round, if not for the visitor industry.
Indeed, the increase in revenues from cruise ship visitors has far outpaced Juneau’s population growth. So why must the CBJ Assembly now increase debt and taxes on its residents?
It’s past time to look at the fallacy of the Assembly’s method of basing its annual budget on last year’s expenditures as a starting point. A critical review would find that CBJ doesn’t have a revenue problem, it has a spending problem.
At the very least, it would confirm that the cruise industry has earned and proven its value to the Juneau community.
After retiring as the senior vice president in charge of business banking for Key Bank in Alaska, Win Gruening became a regular opinion page columnist for the Juneau Empire. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is involved in various local and statewide organizations.
