Wrangell is in a Goldilocks situation when it comes to tourists.
Too many is no good. It would leave the town feeling stuffed.
Too few is what we have, leaving the town hungry to fill its economic bowl.
Just enough more visitors to warm up the economy would be the right amount.
Too bad it’s not as easy a choice as Goldilocks picking which porridge to bear down on.
Wrangell is not a tourism-dominated community like Skagway or Juneau. Nor does it want to be. But a little more sales tax revenue would be a good thing, particularly if those sales tax dollars come from visitors rather than from local residents.
And more business from more visitors would help the town’s shops and tour operators make it through the slow winter months.
Sales tax collections are the largest single source of revenue for the borough, but those receipts are beginning to backslide a bit. The budget for the new fiscal year that started July 1 projects a 4.6% decline in sales tax revenues from what the borough had estimated for last year.
Part of the reason is the uncertainty of the U.S., state and local economy, and people cutting back on spending to manage their household budgets. And part of the reason is not enough visitors, of which close to 90% come aboard cruise ships and tour boats.
An annual economic report prepared for the borough had estimated Wrangell might have seen as many as 31,000 cruise passengers this summer, if all the berths were full. But several canceled cruises — some due to a bankruptcy, others switching to different ports — have lowered the summer’s maximum passenger count to about 23,000.
In the porridge world, that is too cold.
Remember that sales taxes aren’t just about running City Hall. The borough dedicates 20% of the tax receipts to the school district, and sales tax dollars go into the same general fund that subsidizes the Parks and Recreation budget and Nolan Center operations.
Wrangell is not alone in Southeast in counting sales taxes as the largest source of revenue for the municipal budget. Juneau this year is expecting more than $71 million from its 5% sales tax; Sitka is counting on more than $20.5 million. What makes Sitka different is it charges a 5% tax in the fall and winter, then ups the rate to 6% in the spring and summer.
Collections have been so strong in Sitka, as the town grows its tourism industry, that the assembly in that community voted to credit $300 to every residential utility customer on their December 2023 bill, distributing about $1 million from the bounty of sales tax dollars.
Of course, Sitka and Juneau run up those tax numbers with throngs of cruise passengers walking through town.
A record 1.67 million passengers visited Juneau last year, with roughly the same number forecast this year. Sitka went from 385,000 in 2022 to 585,000 in 2023, with slightly more expected this year.
Both towns are encountering community opposition from residents who think the porridge is too hot. A ballot initiative to reduce the days and limit the visitor numbers in Juneau is headed for the October municipal election. A similar effort in Sitka to restrict the number of visitors is embroiled in a legal dispute with borough officials, who have denied efforts to get on the ballot.
Wrangell does not need ballot initiatives, legal fights over petitions or hundreds of thousands of visitors. But the community’s economy needs more visitors. It needs to find that right temperature. More tourists will not change the town, but a weak economy will.
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