The Alaska Marine Highway System’s budget — and ferry service to several dependent communities — was dealt a significant blow Thursday morning when the House Finance Subcommittee on the Department of Transportation and Public Facilities finalized its adjustments to Gov. Bill Walker’s budget.
The subcommittee, chaired by Rep. Steve Thompson, R-Fairbanks, recommended a $9.5 million cut to the ferry system from the current year’s budget.
“The reductions to the Marine Highway System will dramatically change the way the Marine Highway System operates,” DOT Administrative Services Director Mary Siroky said at the meeting. “There will be one vessel serving every region of the state and there will be no backup ... when the vessel goes into overhaul or has a problem. There will be times ... when there will be communities that will find that there are weeks that they will have no service.”
The ferry system consists of 11 vessels. The Chenega, which now serves Whittier, Valdez and Cordova, would be laid up all of FY2016 to meet the cut, she said. The department would recommend that the funding for the Chenega’s overhaul, or annual repairs, be eliminated.
The Taku, Malaspina and Kennicott would be taken out of service for months at a time.
The system’s fast ferries, including the one that serves Juneau, would run only four days a week.
Service to Bellingham would be reduced and “Kodiak would not see service for six weeks (at a time) because the Kennicott is not available and the Tusty has some other stuff to do,” Siroky said.
DOT estimates laying up vessels to meet the proposed cut would cost the state $10 million in revenue, she said.
Siroky said the reductions are “widespread, not specific to any region” and will be spread out proportionately, but “with every reduction there is a trickle-down effect.
“The reductions are dramatic.”
DOT spokesman Jeremy Woodrow said there’s no set list of service reductions yet because “we don’t really know what those cuts will be until we know what that budget is.” Now that the subcommittee has approved the department’s budget, it will move on to the full House Finance committee and then on to the Senate and back again before it’s finalized.
What the department does know is that service weeks will be diminished. Among the system’s 11 vessels, AMHS provides 400 weeks of service per year.
Subcommittee member Rep. Sam Kito, D-Juneau, said the subcommittee’s approved cut equates to a reduction of 72 weeks of service in FY2016.
The system’s budget has seen some ups and downs in recent weeks. When the governor’s original operating budget came out, it included a $3.5 million reduction to ferry operations, Woodrow said. Later, the governor restored $6.3 million to operations from within the department, taken from all three of the state’s transportation regions.
On top of that, though, is $5.3 million reduction in ferry fuel funding, called a “fuel trigger,” usually provided by the state. It won’t be coming in FY 2016, Woodrow said, because it only kicks in when oil prices are more than $70 per barrel. Crude prices have been dropping since summer and are now right below $56 per barrel.
DOT will have to find that $5.3 million elsewhere, Woodrow said. Other state departments that use vehicles will also miss out on the fuel funding, he said.
It will take the department “several more weeks” to figure out exactly how it will balance its books when it comes to ferry service, Siroky said. She said she’s asking AMHS to get back to her about how the cut would impact each individual community it serves.
“We’re still looking at how we can manage this,” she said. “We’ve had very little time; it’s a very complicated system.”
Kito, who represents several of the 32 communities served by the system, said he was “very disappointed” that the budget was passed out of his subcommittee. He voted against it.
Kito proposed an amendment to the DOT budget that would have added some funding back to AMHS. That amendment was rejected.
“If it had passed, I would have approved the budget moving forward,” he said after the meeting.
The other members of the subcommittee are Reps. Shelley Hughes, R-Palmer; Mike Chenault, R-Nikiski; Neal Foster, D-Nome; Liz Vazquez, R-Anchorage; and Dan Ortiz, I-Ketchikan. All, including chair Thompson, voted to push the budget forward besides Kito and Ortiz.
“I don’t know that they all knew what the impacts were of cutting (the budget),” Kito said. “I think really what they wanted to do was terminate some Marine Highway System employees. It doesn’t work that way. Each vehicle requires a certain amount of people to operate... You really just shorten the amount of time (the vessels) are operating.”
He said he will “work with people I know on the full Finance committee to restore some of that funding for the Marine Highway System.”
Hughes said to close out the meeting that she wants to see more streamlining within DOT at the administrative level, and that she was proud of the work the subcommittee did.
“There are no sacred suitcases,” she said. “I think we did a pretty good job here.”
Ortiz’s community of Ketchikan is home to AMHS headquarters. He said after the meeting that he thinks the cuts to the system, if maintained, will damage the economies of Southeast, Southcentral and Southwest Alaska.
“I agree cuts need to be made to put Alaska on a path with a sustainable budget,” he said. “I believe the depth of the cut showed a lack of necessary planning or foresight. It stands to really significantly hurt the economies of the three areas.”
Ortiz said lawmakers from communities not served by the ferry system might not fully understand its function in Southeast and other coastal regions and believe the system is too heavily subsidized.
“I do feel like there’s a desire by Interior and Southcentral legislators to see the numbers of the ferry system look similar to the numbers of the road system and they’re two entirely different systems,” he said.
All three Juneau legislators spoke out against the subcommittee’s action at the Central Council of the Tlingit and Haida Tribes of Alaska’s Native Issues Forum Thursday afternoon.
The ferry system is “the transportation lifeblood to our region and we need to work really hard to maintain the current service levels,” House Finance committee member Rep. Cathy Muñoz, R-Juneau, said at the event.
She said she will “meet with leadership in the House to restore some of those cuts.”
On the other side of the building Thursday morning, Senate Finance members defended the Juneau Access Improvement Project, which aims to indirectly connect the capital city to the road system, while also discussing AMHS operations and funding. Walker has suspended the Road project while DOT reanalyzes it and other options.