Should Cruise Ships Pay For Puget Sound?
Update: A version of this post appeared in Real Change News.
Let's say, just hypothetically, that Washington were facing a ginormous budget shortfall. And let's also say that the state had made an ambitious -- but mostly unfunded -- commitment to cleaning up Puget Sound. That would be a real pickle. But do you know what I'd do?
I'd levy a tax on the cruise industry, that's what.
Washington's cruise ships are only lightly regulated, sometimes to the detriment of the local marine environment. And cruise ships visiting Washington do not pay head taxes as they do in Alaska, which means that Washington is missing out on badly-needed revenue that can be used for environmental protection and oversight. Consider how they do it up north:
- Ketchikan levies a $7 per passenger tax on cruise ships that visit the port.
- Juneau levies a $8 per passenger tax.
By contrast, Seattle -- now the most popular point of departure in the Northwest -- levies nothing. But if the city were to to charge a comparable fee on the roughly 886,000 cruise passengers that left Seattle in 2008 it would have netted around $7 million. Granted, that's not going to fund the complete restoration of Puget Sound, but it might fully fund an important program or two -- the very sorts of programs on the chopping block of budgetary constraints.
But that's not the half of it. The state of Alaska also levies a $50 per passenger tax. What would happen if Washington did that?
At $50 per passenger, Washington would pull down $44 million per year even if you count only the passengers that embark from Seattle. Once again, that's not the whole price tag for Puget Sound, but now we're talking about real money that could be put to good use in shoreline restoration, contaminated sediment clean up, spill response teams, or dozens of other uses.
For a variety of reasons it might make more sense to structure Washington's charge as a fee rather than a tax. Among other things, that would keep the money out of the general fund and necessitate using the funds on projects related to the cruise industry. Given the serious environmental impacts of the cruise industry -- see this Crosscut article by Fred Felleman, for example -- finding a nexus between the fee and the revenue use shouldn't be difficult at all. Puget Sound has many financial needs and a cruise industry tax can plug a few holes at least.
Better still, a cruise ship tax isn't regressive -- in fact, it's explicitly a tax on the well-heeled. It doesn't discourage small businesses or home ownership and it doesn't annoy property owners, as other fees and regulations are sometimes alleged to do. In fact, a cruise fee would mostly be paid by people from out of state.
It's possible, I suppose, that a cruise ship fee could result in some ships diverting to Seattle's main competitor, Vancouver, BC. But given the similar funding needs for marine protection in British Columbia, I'm sure the state and the province could work out some mutually agreeable solution such as, say, a $50 per passenger fee in BC too. That would keep the playing field level and boost environmental efforts in the shared waters of Puget Sound and the Straight of Georgia.
Alaska's cruise ship tax, which was the product of a citizen's initiative, does even more. It also levies a corporate income tax on the cruise line earnings and it taxes the gambling profits that occur while the ships are in Alaska waters. That's yet more revenue and a tighter leash on an industry that sometimes has trouble playing by the rules.
It's not often that the Evergreen State takes environmental cues from Alaska, but this may be the rare instance where it makes sense.
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