Homer Cruise Passenger Tax Revenue More Than Doubles

Cruise activity in Homer generated $18,870 in state passenger tax distributions from the 2025 season, more than twice the $9,225 received for the previous year.

The money is split evenly between the City of Homer and the Kenai Peninsula Borough. Under a proposed appropriation, the borough’s $9,435 portion would be returned to Homer.

Cruise visitation to the Alaska destination also increased significantly. Homer welcomed 6,407 passengers from 12 ship calls in 2025, compared with 3,027 passengers and nine calls during 2024. Despite the growth, passenger numbers remain below levels recorded before the pandemic. Homer received 14,812 cruise visitors in 2019, while annual passenger numbers averaged approximately 12,500 between 2015 and 2019.

Of the passengers who visited Homer in 2025, 3,774 were liable for Alaska’s Commercial Passenger Vessel excise tax. That figure was up from 1,845 taxable passengers in 2024.

The tax currently stands at $34.50 per passenger per voyage and applies to vessels with at least 250 berths that provide overnight accommodations and spend more than 72 hours traveling through Alaska’s marine waters. For every taxable passenger, the state distributes $5 to an eligible port of call. As Homer is located within a borough, the City of Homer and Kenai Peninsula Borough each receive $2.50.

However, many smaller adventure cruise ships do not meet the 250-passenger threshold. As a result, Homer’s number of taxable passengers is lower than its overall cruise visitor total.

The Kenai Peninsula Borough received $362,200 from passenger taxes generated by 2025 cruise activity in Homer and Seward. Under Ordinance 2026-19-08, $352,765 would be allocated to Seward, while Homer would receive $9,435.

Since 2007, the borough has made its share of passenger taxes generated by Homer and Seward available to the two cities through grant agreements. If the latest proposal is approved, Homer could use the funding for harbor facilities, infrastructure and services that support visiting cruise vessels and their passengers.

During the previous funding round, Homer received $4,612.50 directly from the state and an equal amount through the borough. The City Council accepted both payments in June 2025. That money was used to help cover costs associated with the Ramp 2 restroom project and to replace benches along harbor walking paths with ADA-compliant models.

Homer has identified improvements and maintenance at cruise passenger staging areas and restrooms as priorities for future passenger tax revenue.

Other potential projects include installing additional benches and signage, improving accessibility and wayfinding, creating covered waiting areas for buses and developing infrastructure to support the lightering of passengers from cruise ships that cannot berth directly in the harbor.

Homer’s Deep Water Dock is capable of accommodating vessels measuring up to 800 feet in length and 65,000 displacement tons, however, the harbor has previously had to turn away ships carrying approximately 2,500 passengers because it does not currently have the operational capacity required to handle vessels of that size safely.

The borough ordinance was introduced on September 1, with a public hearing scheduled to take place on September 15.