Container tax is a direct hit on Alaska economic prosperity
Even as the bill may change through the legislative process, Alaska businesses need to be heard clearly that we oppose any container tax whatsoever. Hundreds of thousands of those containers are headed to and from Alaska via the ports in Puget Sound. The container tax under study will raise the cost of moving goods and materials to Alaska, and increase the cost of day-to-day living for all Alaskans.
Washington state Sen. Mary Margaret Haugen, the drafter of the bill, has called it “a shot across the bow to get everyone to pay attention.” While it may have been intended only as a shot across the bow, any container tax will be a direct hit on Alaska’s economic well-being.
Alaska depends on Puget Sound ports for the delivery of essential items like food, medical supplies and building materials. We are a state geographically 2 1/2 times the size of Texas, but with road access to just 2 percent of that area. Nearly 90 percent of goods and materials sold along Alaska’s road system arrive in the Port of Anchorage via the ports of Seattle and Tacoma. What’s more, since containers generally come to Alaska full, but leave empty, Alaskans already pay double for shipping containers to our state. This tax would be charged on each leg of travel to and from Alaska, and will add real additional cost to every Alaskan.
Moving goods to residents throughout Alaska has always been a logistical challenge. Alaskans have worked hard to forge a sustainable economy based in large part on those logistics happening as efficiently and cost-effectively as possible. One industry estimate suggests that the container tax originally proposed in Senate Bill 5207 could pass on $40 million to $50 million in additional costs to every Alaskan and every business operating in our state.
What makes matters worse is that this shot across the bow comes from a ship in our very own fleet. Our economic relationship with Washington isn’t a one-way street. The state of Washington has been the primary gateway to Alaska since long before the first gold rush. A study commissioned by the chambers of commerce in greater Seattle and Tacoma-Pierce County, titled “Ties that Bind,” indicates that as recently as 2003, Alaska was Puget Sound’s fifth largest trading partner, putting our state just behind countries such as Canada, Japan and China. Furthermore, the study indicates that roughly 46,000 jobs in the Puget Sound area are dependent upon trade with Alaska.
We can relate. One in nine jobs in Anchorage depends on the global air cargo traffic that transits Ted Stevens Anchorage International Airport, the third busiest cargo airport in the world, every day. Alaska recognizes that it benefits from this link into the global economy, and we work hard to maintain some of the lowest landing fees of any airport our size. A container tax not only impacts Alaska’s economic well-being, it will be a direct hit to the industries, businesses and workers in Washington that move goods and materials to our state and elsewhere. We’re neighbors. What is bad for our neighborhood is bad for theirs too.
If any container tax passes the Legislature in Washington state, it will raise the cost of moving goods and materials to Alaska, and it will stifle the quality of life and the sustainable economy we’ve built here. Furthermore, our economic interdependencies ensure that this tax will negatively affect people, communities and businesses in both our states. We do recognize the importance of transportation infrastructure improvements for the success and vitality of an economy. Improvements in transportation infrastructure benefit not only the ports but the industries and communities that depend on them. While this legislation may pay the bill for transportation infrastructure, it strikes a blow to the well-being of a neighboring state that they’ve depended on as a trading partner for most of their state’s history. Please help us get this container tax off of the legislative agenda, and let’s find another means to move Washington’s transportation infrastructure forward.
Bob Poe is the president and chief executive officer of the Anchorage Economic Development Corp.