City to get state head tax money

Gov. Bill Walker may not be wild about the compromise budget approved by state lawmakers on Tuesday, which fails to fix the state’s $4 billion budget deficit, but there’s at least one provision that Juneau city officials can get behind.

After some back-and-forth, the Legislature has included in its budget language that ensures municipalities will get their share of state cruise ship head tax money. The Legislature simply included “boiler-plate language” consistent with state statute, dictating how the head tax money is to be appropriated and spent, according to Juneau Assembly member Jesse Kiehl.

“The language had been in the budget, then it had been out,” Kiehl said. “When they finally figured out what they were doing with the budget, it was in.”

The state currently collects a marine passenger tax of $34.50 per passenger. That money goes into an account within the state’s General Fund. The first seven towns in which a cruise ship docks then get $5 per passenger from that state fund.

Counting on that money, Juneau city officials functionally appropriated about $4.6 million worth of expected state head tax money in their budget for Fiscal Year 2017.

“Assuming the governor signs the budget, those funds will come, and they are scheduled to fund the cruise berth improvements,” Juneau Assembly member Jesse Kiehl told the Empire.

Had the Legislature not including the head tax revenue sharing in its budget, the city still would have been able to fund the new cruise berth project, but it would have had to use its contingency funding. That would have required the city’s Docks and Harbors division to foot most of the bill, the city’s Finance Director Bob Bartholomew said.

The $4.6 million in funding is subject to change slightly, however, as the state head tax money is appropriated based on the actual number of cruise passengers who visited each port during the previous year — running from July 1, 2015 to June 30, 2016.

Kiehl said some city officials estimate that number could be closer to $4.8 million when the final count is set. The money, he said, would help advance the paydown of the ongoing 16B cruise berth improvements downtown, which will allow the city to accommodate two cruise ships of more than 1,000 feet in length.

“That’s a huge dollar amount overall for Docks and Harbors, so being able to get that for the dock was great,” Bartholomew said. But he also acknowledged that there’s still one last step in the budgetary process before the city can be sure it will get those funds. The governor has to approve the budget.

At a press conference Wednesday, Walker expressed his concern with the Legislature’s failure to close the states $4 billion budget gap. He doesn’t plan to veto the entire budget, but still has line-item veto power over specific budget appropriations. He hasn’t said whether he will use it.

• Contact reporter Sam DeGrave at 523-2279 or at sam.degrave@juneauempire.com.

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