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Alaska Head Tax

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Governor Sean Parnell’s head tax initiative has now passed both houses of the Alaska Legislature.  In 2011 the new rate will go into effect and cruise lines will see a reduction in their per-passenger costs on Alaskan cruises.  Now we’ll have to wait for the cruise lines’ responses.  It is almost certain that deployment in Alaskan waters will increase.  But will the number of cruises return to previous levels?  Not so certain.

Throughout the debate, there appeared to be an odd dis-connect in the Alaskan world view.  There was very little to suggest that Alaskans and their elected representatives recognize that they have a product to sell.  The cruise lines are their customers and, difficult as it may be for the citizenry to believe, there are actually competitors for the cruise lines’ commerce.  One got the impression that there exists a fanciful notion that the cruise lines are in thrall to Destination Alaska.  The fact is that there are other destinations, no less attractive to large numbers of cruisers, that are more profitable for the cruise lines.

The cruise lines, like all profit centered businesses, will shift their assets to more profitable avenues when the opportunity presents itself.  In this case we are, after all, talking about ships.   They are mobile.  The cruise lines have already demonstrated that they can and will redeploy their ships to other destinations.

The governor’s successful proposal is far from universally welcomed.  If Alaska back peddles on this issue, an event not beyond the realm of possibilty, the current reduction in cruises might become permanent.

Now I in no way dispute Alaska’s taxing power or its right to maintain its infrastructure and protect its environment.  I am, however, concerned at the prospect of fewer cruisers having the opportunity to experience the Great Land, as the native Aleuts call it.  Burned into my memory is a day spent in Glacier Bay that can only be characterized as glorious.  It was a true blessing.  I hope that those of you who haven’t experienced Alaska will one day be so blessed.

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