Cruise ship visitors browse Skagway shops on a May afternoon. (Emily Files)

Cruise ship visitors browse Skagway shops on a May afternoon. (Emily Files)

Skagway leaders are holding off on approving a budget for next fiscal year because of uncertainty over the state budget — in particular, a measure that would withhold cruise ship head taxes from port communities. If that proposal were to go through during the special session, Skagway would be left without a significant piece of its revenue pie.

If the state were to forgo distribution of passenger taxes, Skagway would lose out on about $4 million.

“That’s a hell of a blow,” said Assemblyman Tim Cochran at a meeting last week.

Normally, passenger taxes the state collects per cruise visitor are funneled to the port communities the ships visit. But a legislative conference committee voted earlier this month to remove key language in the operating budget that allows that distribution to happen. Borough manager Scott Hahn said the assembly shouldn’t just assume things will work out.

“From what I have heard through the grapevine so to speak, they thought it was a lot of bravado,” Hahn said. “And I guess politics is a lot of bravado, a lot of egos and emotions. Maybe something will come around. But at this point in time, I think you have to behave as if you’re not getting the CPV money for next year.”

The assembly agreed. They approved a second reading of the budget, but will delay adoption until the state financial picture is clearer.

Skagway lobbyist John Walsh was on the phone from Juneau. He said he also heard from other cruise ship port community leaders that they think the issue will be resolved.

“I think most people think it’s gonna get worked out, and I trust it will and that’s fine,” Walsh said. “But what if it doesn’t? You are instantly harmed and that’s arguably unnecessary.”

He recommended the assembly send a letter to Gov. Bill Walker urging him to reinstate the passenger tax distribution language, which the assembly did.

The assembly discussed commissioning an updated study of how cruise passenger taxes are spent in the community. The last study was in 2008, and helped justify the municipality using the funds for water, sewer and other utility expenses. Borough staff will look into the cost of an updated study and bring back details at a later meeting.

Aside the passenger tax discussion, the assembly put off action on several items.

One has to do with what steps to take next toward the goal of remediating port contamination and building a new floating dock. The assembly held a work session with the port commission recently. Cochran described the general consensus from that meeting:

“We still need access, so we need to re-engage with White Pass. They’re the main lease holder.”

They decided to schedule another work session to, as Assemblyman Steve Burnham Jr. put it, resolve their ‘indecisiveness’ on the port. In the meantime, the idea of hiring a maritime planner was put on the back burner.

The assembly delayed action on three agreements that would allow companies that sub-lease municipality land from White Pass and Yukon Railroad to use space outside their current contracts.

There were three items set for discussion in executive session with borough attorney Bob Blasco. First, a request from Alaska Mountain Guides to recuperate legal fees. AMG filed an appeal over the Skagway planning commission’s denial of a raptor tour permit in Liarsville. A judge recently found in AMG’s favor and remanded the decision back to the planning commission.

The attorney was also scheduled to give advice about the municipality’s potential purchase of Long Bay property owned by the Matthews family.

And finally, Blasco was to advise on implications of renewing subleases with Alaska Marine Lines and Temsco. Those companies use land included in the municipality’s long-standing lease with White Pass, which is a central issue in discussions about the Skagway port’s future.

The assembly did not take action on any of the three matters. When they came out of executive session after two hours, there was no public discussion of the AMG request, Long Bay property or port subleases.

The next assembly meeting is scheduled for June 2.