Some residents opposed $2 million in state funding for Klukwan’s purchase of the Chilkat Cruises dock and vessel and $277,000 for renovation of the fair’s Harriett Hall as a convention center, staff to Gov. Sean Parnell’s budget director said this week.
State Rep. Bill Thomas, R-Haines, submitted the two requests to be funded from cruise ship head tax regional impact money. The requests were approved by the Alaska Legislature but vetoed last week by Parnell.
A Department of Law review of funding requests flagged those two as potentially open to a legal challenge, according to Tyson Gallagher, assistant to Parnell budget director Karen Rehfeld.
"They didn’t meet the proper funding parameters," Gallagher said. Cruise industry officials in recent months have threatened court action against expenditures of head tax revenues they say go beyond restrictions on use of the money.
At press time Wednesday, Gallagher was unable to reach higher-ups for approval to release the names of residents who opposed the local requests or their comments. But in an interview this week, tour operator Karen Hess acknowledged she e-mailed the state concerns about the source of funding for the projects.
Hess said she wasn’t opposed to the two projects receiving state money, but she didn’t think it should come from the cruise ship head tax. Her understanding of the maritime law that governs the funds is that they must be used for servicing ships that come into port or passengers on the ship, she said.
"I know that cruise passengers go out there (to the fair) but that doesn’t qualify it for cruise ship head tax money. I take cruise ship passengers to my river dock, but I don’t qualify," Hess said.
Cruise ship dock improvements qualify, she said, and projects like a sea walk that would connect to the dock and direct passengers into town also may qualify, Hess said.
Hess, who is a partner in a privately-owned shuttle boat that ferries cruise passengers and others between Haines and Skagway, said she opposed the Chilkat Cruises dock funding because she believed the dock and vessel would be used to move only cruise passengers touring the village of Klukwan, making it a private enterprise that didn’t provide a general service to the ships.
Phone messages left for officials with the Chilkat Indian Village and Klukwan, Inc. were not returned this week.
In its funding request to the state, the fair said the fairgrounds was "a large attraction to cruise ship passengers all summer long." But renovating the fair hall with cruise ship funds "created an issue for a lot of constituents," Gallagher said.
Parnell’s office also received correspondence from residents supporting and opposing state funding for the village of Klukwan to purchase the Chilkat Cruises dock and boat from village Native corporation Klukwan, Inc., Gallagher said.
In addition, Parnell vetoed the cruise dock and vessel expenditure because he didn’t want to give the idea the state was helping one business over another, Gallagher said, in an apparent reference to Hess’ shuttle ferry.
The three Haines projects Thomas submitted for funding from the regional impact fund approved by the legislature were the Chilkat Cruises dock, Harriett Hall renovation and $2.9 for improvements to the Port Chilkoot Dock. The Chilkoot dock request was funded.
On Tuesday, fair manager Kelly Hostetler secured $175,000 for the hall project from the Haines Borough Assembly. She declined comment for this story.
Besides the Port Chilkoot Dock upgrade, projects that survived Parnell’s budget pen included $270,000 for completion of a raptor center at the American Bald Eagle Foundation; $325,000 for a retaining wall, drainage and pavement at Haines Assisted Living; $1.1 million for replacing the Lilly Lake transmission line; $180,000 for Mosquito Lake School heating upgrades; $80,000 for emergency slide repairs at 19 Mile; $63,000 for a new roof and bus wheelchair lift for the Haines Senior Center; and $33,000 for a garbage truck in Klukwan.
Federal transportation funds in the final budget approved by Parnell include $7.4 million for repairing the Haines airport and $1 million for replacing Wells Bridge and four miles of adjacent road work.
Rep. Thomas said he was disappointed in Parnell’s cuts, but said Haines did relatively well. According to state figures, Thomas’ legislative district received $42 million in capital funds, including $37 million for infrastructure, $1.58 million for education improvements and $3.9 million for public safety and health upgrades.
Thomas said Parnell cut $14 million in requests from the district.
Thomas said he had a 20-minute meeting with Parnell about requests from his district after the legislature adjourned. "We told them everything in there created jobs. I don’t know what his idea of creating jobs is. We were looking at jobs on the local level… I told him we didn’t put (projects) in there unless we need them."
Thomas said he would have preferred Parnell cut large federal appropriations, as bigger projects are more likely to go to non-resident contractors and employ fewer residents. Capital spending last year was limited to cruise ship head tax revenues and federal pass-throughs, he said.
Dan Hart, acting raptor curator at the bald eagle foundation, said their appropriation will allow full completion of the master mew and will effectively create a new job at the center after the number of resident birds increases to 10 from four birds there now.
"We already have some birds being held for us. We’re pretty excited. When we get that work done, we’ll move those birds in immediately," he said. "This completes our 10-year goal for a fully completed live-bird program."
Board member Jim Studley said most of the $350,000 Haines Assisted Living was receiving would pave driveway and parking lots at the building. The money also will go for storm drainage work and for burying electrical lines after transformers at the site from the former Food Center grocery store are removed.
The money also will go for landscaping and for a retaining wall on the east side of the property that’s already been built, Studley said.
Parnell made cuts of $380 million or about one tenth of the $3.8 billion capital bill approved by legislators. Parnell and many legislators, including Thomas, are seeking re-election in the fall.