Tourism industry leaders lash out at permit fee increase proposal
January 31, 2019
Borough Manager Debra Schnabel opened Tuesday night’s commerce committee meeting with an assurance to the tourism industry that “this administration is ready to work with you” and a request not to leave with an arrow in her back.
More than ten tour operators attended the meeting ready to protest Schnabel’s proposed permitting code. The new permit fee would cost tour operators between $100-$1,250 annually, up from $25, depending on total daily guests and years in business. A third-year tour operator hauling between 100 and 999 guests per day would pay $250 for their yearly permit.
Operators called the price hike “radical” and “detrimental” and beseeched the borough to “tone it down.” One operator threatened a lawsuit against the borough.
The back-and-forth between administration and operators over permit costs began last month when Schnabel proposed to increase the fee from a $25 permit to a $250 permit, then the Tourism Advisory Board (TAB) cut it in half, and Schnabel negotiated their original cost down.
“Now, we have come back with ‘OK, how about $50 a year for first two years, $150 a year for the next two years, and $250 for the next two years.’” Schnabel said she proposed the increase to generate revenue for the borough’s general fund in a community that thrives on tourism.
But operators were still dissatisfied.
“It feels like you’re penalizing those who have been in the industry for years who are experienced, and it should be flipped,” TAB member Barbara Mullford said.
Committee chair Sean Maidy said the more established a company is, the more it can afford the overhead.
Long-time tour operator of Chilkat River Adventures, Karen Hess, threatened a lawsuit against the borough if the permit fee increase passes. Hess said her company won a similar case against the Department of Natural Resources to exempt them from paying client fees. Their lawyer determined that operating on private property and navigable waterways freed them from owing money for their vessels, Hess said.
“This is the same thing and it’s applicable the same way.” Hess said, “I just called my attorney today.”
Many operators said increased permit fees harm their businesses.
“The idea that $1,250 is going to hamstring your business or the economy begs credulity,” Committee member Tom Morphet said to Hess.
Absorbing the cost of a higher permit rate from a “ridiculously low” fee is reasonable, and the cost of doing business, Morphet said.
Gaffney said that assumption is wrong.
“We’re a large tour operator and I feel like you look at me and say ‘Oh yeah you can afford it,’” and that is not accurate,” Gaffney said.
Hess suggested that the borough take time implementing an increased fee and not rush to implement it four months before the start of the season.
“I’m not opposed to an increase,” she said “Please make it simple and reasonable.” She suggested increasing the fee from $25 to $50 for the current season.
Schnabel closed the meeting with an agreement to re-evaluate the cost.
“I learn things from you,” Schnabel said. “Hopefully you learned things from me, mostly about how difficult it is to figure out what everybody wants,” she said, “We hear what you say. We’ll come back.”
Haines is the only community in Southeast Alaska that, by code, requires a public hearing and assembly approval of a commercial tour permit, according to a CVN informal survey of Skagway, Ketchikan, Sitka, Juneau, Petersburg, Wrangell and Craig.
The commerce committee will meet again on Feb. 19 to discuss the permit cost.