The state had been sitting on $37.5 million it collected but never spent over several years from its cruise ship passenger tax. The Legislature decided this was the year to put the money to good use. Lawmakers drained the account and sent the funds to 16 communities, based on their cruise visitor counts.
Wrangell will receive $375,000, which it can spend on waterfront projects or other infrastructure and services that would benefit cruise ships and their passengers.
“It didn’t serve a public purpose building up an account balance,” Juneau State Senator Jesse Kiehl said of the money sitting unused in the state’s commercial vessel passenger tax account.
Gov. Mike Dunleavy had not proposed spending from the account, leaving it to accumulate since 2022.
Kiehl is a member of the Senate Finance Committee, which added the spending to the state budget in May. The governor signed the spending bill last month for the fiscal year that started July 1.
“The $37.5 million basically empties the account,” said the director of the Legislative Finance Division.
The state collects a tax of $34.50 per passenger from cruise ships of more than 250 passengers. Half the money is shared with cruise-destination communities which receive $5 per passenger, which includes Wrangell, and the state keeps the other half.
The tax originated with a citizens initiative approved by Alaska voters 20 years ago.
Under state law, the money can only be used “for projects to repair, maintain and upgrade port facilities and harbor infrastructure, enhance passenger safety and provide services to vessels and passengers.”
Those same restrictions apply to the funds shared with municipalities — both the annual allocation of $5 per passenger and this year’s $37.5 million one-time cash-out of the account.
In addition to $375,000 coming to Wrangell, the legislative appropriation directs $9 million to Skagway, almost $6.9 million to Ketchikan, $6 million to Juneau, $4.5 million to Sitka and $3 million to Hoonah, among the larger distributions.
