Veto blocks cruise funding for Marine Exchange

Marine Exchange technicians Jason Hort, left, and Rick Sypek work a July 22 morning shift monitoring ships across 1.5 million square miles of Alaska waters. (Photo by Jacob Resneck/CoastAlaska)

Alaska’s primary provider of real-time marine vessel tracking has lost 11% of its funding. That’s following a line-item veto by Gov. Mike Dunleavy in the 2020 capital budget.

After Gov. Dunleavy’s first round of vetoes, the legislature re-inserted the $400,000 in cruise ship passenger revenue to support the Marine Exchange of Alaska’s network of ship tracking stations. That money was to be drawn from the $34.50 head tax paid by every cruise ship passenger that visits Alaska.

The second time around, the governor vetoed it again.

“There’s an examination happening on all types of spending,” Dunleavy’s spokesman Matt Shuckerow told CoastAlaska. He says the Marine Exchange has received about $2.8 million in head tax since 2013 and the governor feels it should look elsewhere.

“This is one organization that, while they have done good work, they seem to be an organization that has unspent funds that can begin looking at new ways to operate,” Shuckerow said.

He suggested that the head tax revenue be redirected in future years to port projects across coastal communities.

But that $400,000 isn’t going to be used elsewhere in the state’s budget any time soon. That’s because head tax money is restricted and has to be appropriated by the legislature.

“If we don’t spend the money, it doesn’t go anywhere, it just sits and piles up,” said Ed Page, the Marine Exchange’s executive director. “It’s not a fund that could be used for other public services or for schools or for housing or drug programs or what-have-you, it’s restricted to maritime application.

The Marine Exchange offers real-time vessel tracking — for a fee — to the maritime industry. That’s everything from cargo ships, to cruise liners, to oil tankers and the fishing fleet.

The vetoed state funding would have been used to upgrade its roughly 140 existing tracking stations.  It would also add additional transmitters to reduce the number of dead zones where vessel tracking is spotty or non-existent.

Page says the Juneau-based nonprofit will avoid layoffs by digging into savings. But the funding loss will also delay upgrades to its infrastructure.

Marine Exchange of Alaska’s Executive Director Ed Page says the nonprofit planned to use the $400,000 to upgrade its roughly 140 ship tracking stations. (Photo by Jacob Resneck, CoastAlaska – Juneau)

The cruise industry hasn’t weighed in publicly over whether it supports head tax funds going to the Marine Exchange.

Cruise Lines International Association Alaska President John Binkley told CoastAlaska it’s understandable for the Dunleavy administration to press the Marine Exchange to rely more on member fees.

CLIA’s members are already dues-paying members.

“We think it’s beneficial to the state and to maritime commerce and that’s why all of our members are participants in it,” Binkley said.

Shuckerow, in the governor’s office, also noted the Marine Exchange has cash reserves on hand to draw from.

“A lot of people candidly have said that they’re very happy to see that they’re able to afford a very nice facility that they have, and a lot of people see it as time that these funds go back into the communities as they were intended,” he said.

Page says the nonprofit does have about $2 million in savings. It recently dug into reserves during the federal government shutdown when the U.S. Coast Guard stopped paying its contractors. He says they shouldn’t be punished for fiscal responsibility.

Unlike state and federal government agencies, Page says nonprofits don’t zero out their fund balances at the end of each year.

“It’s the worst budget model possible,” Page said. “We carry reserves so we can ride through the storms, you don’t hope that a budget is going to be passed, and whether you’re going to exist the future.”

The Marine Exchange’s annual budget is about $4 million. Nearly half of its funding comes from dues paid by private industry. The U.S. Coast Guard makes up the rest.

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