Home News Local news CRUISE LINES OFFER SHIPS-FOR-NO-TAX-HIKE DEAL

CRUISE LINES OFFER SHIPS-FOR-NO-TAX-HIKE DEAL

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The cruise ship industry is offering a money back guarantee that it will increase business into the territory if the government does not raise taxes or fees for the next five years.
As part of its proposed agreement with the Virgin Islands, the Florida Caribbean Cruise Association says it will increase traffic to St. Croix during the summer period by 15 percent each year; and increase summer traffic on St. Thomas by 10 percent. Also, the FCCA goal will be three to four ships a week on St. Croix during season (October to April.)
If the association falls short, it will pay a penalty of $3.75 per passenger under the promised percentage increase.
The penalty clause is contained in a revised version of the Cruise Ship Task Force report. The report was first released in July. John de Jongh, co-chairman of the task force, said it was pulled back to make some revisions.
The other major change is in the figures for increased traffic on St. Croix. The first version of the agreement said the number of passengers visiting the island would increase by 25 percent. The revised agreement says there will be "an effort to achieve an annual 25 percent increase" but promises only 15 percent.
Other provisions include:
– FCCA member selected by the Port Authority "to undertake the seaside and land-based projects will commit to the incremental passenger flow" to support the authority's ability to finance development of the Crown Bay dock facility
– The government will create a promotional plan to market St. Croix
– Cruise lines "acknowledge" the government's policy to promote Cruzan Rum. Some have placed orders to carry the product
– Cruise lines will "entertain funding participation" in charitable programs. Independent of the agreement, the FCCA also will contribute $100,000 over a four-year period for a scholarship program
– The Tourism Department, assisted by the West Indian Company and the Port Authority, will monitor compliance, making an annual review
The percentage increases are figured from the number of passengers in 1998. For St. Thomas, that number was 1,547,000. Adding 10 percent per year for five years, means a total of 8,394,894 visitors over the life of the agreement – May 2001 through April 2006.
On St. Croix, the number of passengers visiting in 1998 was just 38,821. Increasing that flow by 15 percent over the five years of the agreement would mean a total 1,064,910 tourists visiting that island off cruise ships.
Raising the volume means raising the revenues, the task force says. It projects an overall impact of $761 million because of the added business. That money is coming from existing fees and taxes and from spending averages for such items as water and ship provisions as well as retail spending by passengers and crew.
The agreement needs legislative approval.
The task force began its study last year in response to a proposal to raise the passenger head tax from $7.50 to $10. The premise of the report is that the tax would be regressive.
Senate President Vargrave Richards co-chaired the task force with de Jongh.
Government members were Sen. Lorraine Berry, James O'Bryan, assistant to the governor, Pamela Richards, assistant commissioner of Tourism, and, from semi-autonomous agencies, Gordon Finch, Port Authority executive director, and Edward Thomas, WICO president.
FCCA representatives were Matthew Sams, Holland America Lines, Stephen Nielsen, Princess Cruise Lines, Michael Ronan, Royal Caribbean Cruise Lines, and Michele Paige, FCCA president.

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