State wants to reduce ferry subsidy

Alaska ferries cost more to run than Washington ferries

Posted: Wednesday, March 08, 2006

Alaska's state-run ferries need a heftier chunk of state dollars than their counterparts in Washington state and British Columbia, but that margin could decline in the future, the state's ferry chief told legislators Tuesday.

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State transportation officials said Tuesday they will likely get back 37 cents on every dollar it takes to run the ferries under the governor's budget proposal for 2007.

In Washington, the return for state-run ferries is more like 79 cents, said Capt. John Falvey, the general manager of the Alaska Marine Highway System.

Falvey offered the comparative figures in response to questioning by legislators convened for a joint House-Senate Transportation Committee hearing.

Some of the legislators, such as Sen. Hollis French, D-Anchorage, seemed baffled by the ferries' costs.

French said his family paid $400 to ride between Whittier and Valdez last year. As it turns out, those ferry tickets contributed only about a third of the cost of their trip.

But ferry officials noted to legislators that Alaska serves a much larger area - with fewer road connections and more port stops per vessel trip - than the boats that serve Washington state.

"(Washington) doesn't have more than a couple ferries that go to more than one place," said Robin Taylor, the state ferry system chief.

House Transportation Committee Co-Chairman Carl Gatto, a Palmer Republican, said he feels like the ferry system is in "Chapter 11" bankruptcy status. He asked Taylor how he was going to improve the system's financial performance over the next 10 years.

Taylor said he believes the state could possibly reduce its future state subsidy, funded by the Legislature, down to 20 to 30 cents on the dollar. Already, the ferry system is improving its profits, he said. This winter, for example, the ferry system increased its gross revenues by 18 percent, even though it was offering a 30 percent ticket discount and letting drivers ride free.

But to make big improvements, the state needs to build more roads and shuttle ferries, Taylor said. The state will need to run more ferries than it has now, he said.

The Legislature needs to demand new roads to help alleviate the financial woes of the ferry system, Taylor said.

Road-shuttle ferry combinations could actually turn out to be more costly to operate than ferries, responded Emily Ferry, director of the Alaska Transportation Priorities Project, after the meeting adjourned.

Ferry said the planned Juneau access road-shuttle ferry project is a case study of how they can turn out costly. The estimated 30-year operating cost of the project is $352 million. That is more costly than two ferry options, and less costly than a third ferry option, according to the Juneau access project's final environmental impact statement.

Taylor also promoted to legislators the possibilities of building a Haines-Skagway shuttle ferry, and extending the North Douglas Highway another 1.2 miles for a new ferry terminal connecting Juneau to Hoonah and Tenakee Springs.

Within the next month or two, the state also plans to publish a request for proposals to design the shuttle ferry service for the Juneau access project, which would connect drivers at the end of a 50-mile road to Haines and Skagway, state ferry officials said Tuesday.

The state intends to pay for Juneau access shuttle ferry service with federal Shakwak dollars, from a pot of money that is anticipated to provide $180 million toward the project's overall cost.

• Elizabeth Bluemink can be reached at elizabeth.bluemink@juneauempire.com.



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