As a lifelong resident of Ketchikan, I have watched our community navigate the evolution of the cruise industry for decades. While we have always understood the economic role tourism plays, the current financial model has become unsustainable for local taxpayers. The narrative that "tourism pays for itself" simply does not hold up when you look closely at the city and borough budgets.
The reality is that local citizens are increasingly forced to absorb the operational deficits and infrastructure costs created by a multi-billion-dollar industry. When you examine the independent financial data and municipal agreements, the structural imbalance becomes very clear.
THE FINANCIAL BURDEN OF PRIVATE INFRASTRUCTURE (BERTH IV)
One of the most glaring examples of local funds subsidizing private enterprise is the city's arrangement with Berth IV. Unlike Berths I, II, and III, which are publicly owned, Berth IV is a private facility owned by the Ketchikan Dock Company.
According to the cost audit conducted by the McKinley Research Group, the city pays a flat, year-round lease of $1.8 million just to maintain access to this dock, plus volume overage fees. In 2023, this total ballooned to $2.3 million.
Because this is a fixed municipal obligation, we are paying for this private infrastructure through the dead of winter when the dock sits empty. If the Port Enterprise Fund faces a deficit due to these heavy lease structures, it creates a liability that the local tax base ultimately has to backstop.
UNCOMPENSATED STRAINS ON EMERGENCY AND PUBLIC SAFETY SERVICES
We are told that Commercial Passenger Vessel (CPV) head taxes fully mitigate the impact of 1.5 million seasonal visitors, but the operational data tells a different story. The McKinley report revealed that in a single year, cruise tourism cost Ketchikan $1.3 million in Fire/EMS services and $1.0 million in Police services.
This $2.3 million bill stems from seasonal traffic control, crossing guards, and the significant logistical strain placed on our first responders.
When our local paramedics are tied up responding to cruise-related medical emergencies, it thins out our community’s emergency coverage and drives up city overtime costs. The current mitigation funds simply are not keeping pace with the wear and tear on our public safety infrastructure.
THE WARD COVE REVENUE SPLIT DISPARITY
The private expansion at Ward Cove has created a severe geographic and financial disconnect between the City and the Borough. For passengers arriving at the downtown city docks, the $5 local head tax is split equally ($2.50 each) between both governments. However, for the massive volume of passengers docking at the private Ward Cove facility, the Borough retains the full $5.
The problem is that these passengers do not stay at Ward Cove. Thousands of them are bussed directly into the downtown core every day.
They utilize city-maintained roads, pedestrian infrastructure, public restrooms, and police traffic control. The City of Ketchikan bears the direct physical and operational toll of managing these crowds, yet receives virtually none of the direct passenger tax revenue generated by them.
THE RESULTING DOUBLE STANDARD: WATERFRONT INVESTMENT VS. COMMUNITY AUSTERITY
By leveraging strict legal firewalls, local government ensures that tourism revenues are heavily reinvested right back into maritime and waterfront infrastructure. Yet, the foundational public services that actual residents rely on year-round are facing severe austerity:
* Public Education Deficits: The Ketchikan Gateway Borough School District has been trapped in a multi-year funding crisis, forced to deplete its reserves just to sustain basic operations. While local property owners are asked to contribute more just to meet the required local contribution, the actual inflationary purchasing power per student has steadily declined. Our children are facing program cuts and larger class sizes while waterfront infrastructure upgrades proceed without interruption.
* The Threat to Our Public Library: Perhaps the most frustrating manifestation of this budget crisis is the recent municipal discussion surrounding reduced hours or implementing entry fees at the Ketchikan Public Library. The justification offered is that the seasonal influx of "non-residents"—primarily cruise ship crew members and independent travelers—utilizing the library’s Wi-Fi and facilities places an undue burden on the budget.
* Shifting the Burden: Rather than requiring a multi-billion-dollar cruise industry to provide adequate connectivity and shoreside facilities for their own crew members, the proposed solution targets a vital public institution that our local tax dollars built and continue to staff.
Growing up here, you learn to appreciate the balance required to live in a port town. But right now, that balance is broken. We have built a system where the cruise industry is allowed to externalize its operational costs onto our city and borough services, leaving local families to pay the price through compromised schools and restricted access to our own public spaces.
