Win Gruening: Juneau Assembly decision to reduce cruise ships risks sending taxes higher

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Juneau

By WIN GRUENING

During a Nov. 6 Committee of the Whole meeting, Juneau Assembly members voted informally on whether the city should pursue cruise passenger reductions. The resulting 6-3 vote favoring cutbacks was unofficial and formal action has yet to materialize, but it’s an indication of the Assembly’s direction.

Paradoxically, the Dec. 4 Juneau Empire story reporting on a recent statistically valid community survey showed that 48% of Juneau residents say overall impacts remain positive (with 22% reporting negative) even after a record-high passenger season.

Considering the responses in the City-sponsored survey, the Assembly’s action seems misguided.

Demographic changes in Juneau’s population reflect that younger residents and their family members now number fewer than those over age 60. Student populations have declined precipitously. Housing and food prices remain among the highest of any urban center in Alaska. Property taxes have risen dramatically over the last several years. It’s clearly becoming more and more expensive to live in Juneau, so why would city leaders lean toward stifling economic growth and its benefits?

Juneau needs working families and young people to stay or relocate here so our schools will be full, our employers can rely less on non-resident labor, and Juneau’s tax burden will be spread more broadly among residents. 

Which brings me back to the cruise industry that last year generated over $34 million in sales tax and passenger fee revenue that flowed directly into Juneau city coffers. That doesn’t count the average $232  each cruise passenger spends in shops, restaurants, bars and on tours, meaning one cruise ship can translate into as much as $1 million in local sales on the day it spends in port.

If cruise ships are curtailed, do Assembly members have a plan to replace that lost revenue? 

It also seems apparent that the majority of Assembly members are willing to abandon their own collaborative process. After spending months working in concert with a citizen task force to formulate visitor impact mitigation measures, why throw in the towel before any of the changes are fully implemented?

Further, why continue the Assembly’s foot-dragging on Huna Totem Corporation’s Aak’w Landing dock project which promises to inject $150 million in private investment into the community? Has the Assembly identified another entity willing to invest that much in Juneau?

Yes, cruise passenger numbers increased this year, but the Assembly’s knee-jerk reaction ignores the financial context that taxpayers should understand. The taxes and passenger fee revenue we collect each year support the hospital, our fire and police department, city administration, streets, parks, and a variety of core municipal services.

Losing a portion of that revenue inevitably means that the Assembly will be forced to trim programs, or taxpayers will have to make up the difference. Even with higher revenues from visitors last season, the Assembly is facing a $1 million deficit in their draft FY 2025 budget, requiring an increase in the property tax millage rate. How is that possible given the city’s record tax receipts this year? The Assembly’s appetite for spending seems insatiable and if cruise passenger numbers decline, they’ll have no compunction making local taxpayers pony up.

The anti-cruise crusaders say that cruise passenger numbers will continue unchecked. That simply isn’t possible. The five-ship limit and rule against “hot-berthing” recently imposed will limit passenger volumes. Furthermore, Juneau’s dock infrastructure and Gastineau Channel’s restricted maneuvering room cannot support the larger ships now being built. 

Ironically, Huna Totem Corporation’s dock project would have a negligible effect on passenger numbers but would help ease congestion by removing substantial passenger traffic from the downtown core outbound past the Willoughby district. Furthermore, project upland improvements would add park space, underground parking, and community meeting and cultural amenities to supplement our convention and cultural venues.

It’s been over four years since the dock project was announced and today there is no end in sight to the delays and stall tactics. Predictably, appeals and lawsuits will run their course. The temptation to cave to anti-cruise demands will be intense.

Now, more than ever, Juneau’s city leaders need to acknowledge the risk in promoting actions that will result in municipal revenue reductions. Juneau’s long-term economic health is too important not to be working together with the industry to meaningfully address community concerns.

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.

7 COMMENTS

  1. Win, the obvious solution would be to curtail some spending….You know, stop buying pig in a poke items like gondola ski lifts, unneeded high schools, new swimming pools, new libraries, skating rinks…..

  2. It doesn’t matter how many cruise ship passengers we have. Property taxes will continue to rise in the name of equity and equality. Just look at Juneau’s commercial real estate, it’s rapidly becoming gov’t owned.

  3. Well Juneau voted for this so they need not to cry just step up and pay for government they voted for and got.
    Enjoy

  4. These “elected” buffoons have no shame, because nowadays shame isn’t painful enough (or at all). Let’s go back to locking up irresponsible public officials in stocks and pillories on full display so we can throw rotten vegetables, fish guts, etc. at them. Let the ravens peck at them and crap on their heads. Heck, post them up in Marine Park and charge tourists to throw stuff at them too; help generate some of the plunder they so blatantly like to spend like drunken sailors.

  5. The only thing that makes sense is the Faux Junta want to cripple the community. They actively are trying to run us into the ground.

    The only thing unique to us is Mendenhall. Everything else can be provided by any other community in the Inside Passage.

    Make life tough enough, they’ll take their business to Hoonah, who will be happy to have them.

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