Juneau to receive $6 million from Legislature's distributed unspent cruise ship tax funds

The Celebrity Summit docks in Juneau on July 7, 2026. (Jasz Garrett / Juneau Independent)

By Jasz Garrett

Juneau Independent

Juneau’s $6 million from state cruise ship passenger tax will be subject to Assembly review and appropriation. 

The state had $37.5 million in its account of unspent tax it collected over several years, with legislators sending the funds this year to 16 communities based on their cruise visitor counts. 

Cruise traffic to Juneau is projected to be roughly the same as last year, with about 1.7 million cruise passengers.

Juneau also collects two local fees, the $5 Marine Passenger Fee and the $3 Port Development Fee for a total of $13 per passenger. 

The capital city expects to receive about $27.5 million in fiscal year 2027, including the $6 million windfall from the state, according to Alix Pierce, Juneau’s visitor industry director.

“Staff is planning to recommend that the Assembly put the funds towards the Seawalk project as an immediate and pressing need,” Pierce wrote in an email Wednesday. “Because this is an appropriation outside the budget process, and because State CPV funds are not subject to the ordinance that requires the Marine Passenger Fee budget to follow a defined public process, we will follow the regular Assembly process for approval and appropriation.”

She added the city is excited and appreciative of the unexpected opportunity to advance a major project.

The legislative appropriation also directs $9 million to Skagway, $6.875 million to Ketchikan, $375,000 to Wrangell, $4.5 million to Sitka and $3 million to Hoonah, among the larger distributions.

“It didn’t serve a public purpose building up an account balance,” Sen. Jesse Kiehl, D-Juneau, told the Wrangell Sentinel about the money sitting unused in the state’s commercial vessel passenger tax account.

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. He had not proposed spending from the account, leaving it to accumulate. 

“The $37.5 million basically empties the account,” Alexei Painter, director of the Legislative Finance Division, told the Wrangell paper.

The account was at zero in 2022, with no withdrawals since then, he said.

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 — including Juneau — and the state keeps the other half. 

The tax originated with a citizens initiative approved by Alaska voters 20 years ago after lawmakers failed to approve similar legislation, prompting the ballot measure so that the public could decide.

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.”

Any municipal spending needs to be related to services or facilities used by cruise ships and their passengers, Kiehl explained.

Those same restrictions apply to the funds shared with municipalities — both the annual state allocation of $5 per passenger and this year’s $37.5 million one-time cash-out of the account.

• Contact Jasz Garrett at jasz@juneauindependent.com or (907) 723-9356. The Wrangell Sentinel contributed reporting about the legislative details of the state’s cruise tax collections to this story. Larry Persily’s original story is available here.