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Wednesday, March 20, 2019
HomePolitics and PolicyWhat do we want? Ferries. Who should pay for them? Other people.

What do we want? Ferries. Who should pay for them? Other people.

The people of coastal Alaska have spoken: Even though ferry ridership is down, and even though costs keep rising, the people want ferries.

They also want the rest of Alaska to pay for them, no matter what the cost is.

Many who testified at a House committee on Tuesday proposed an income tax or cutting the Permanent Fund dividend on all Alaskans, so that the ferry users, a rapidly dwindling constituency, can maintain their subsidies. Several who testified were ferry workers who say that ferries are the lifeline to communities.

By the hundreds, they pleaded for more funding, not less, during a long public testimony hearing in the House Transportation Committee,  where nearly 300 people spoke, hardly any in favor of less ferry service.

The governor’s budget shows a 75 percent cut in the subsidy to the ferry system, which would mean users would have to pay for their own fares, or the system would be dramatically reduced. As proposed, the funding would get the ferry system through the first quarter of the 2020 fiscal year, or until October.

The budget proposal was laid down so that Alaskans would finally have the discussion, said Donna Arduin, the director of the Office of Management and Budget, who spoke to the First Things First group in Juneau this morning. The ferry system needs to be changed, she said. It’s something that most Alaskan policymakers know, and this budget has forced the discussion to finally occur at every level.

That’s not the narrative being offered by the mainstream media or ferry advocates. What they’re saying, such as in this Los Angeles Times article, is that Alaska’s “cherished” ferry system is being dismantled.

Unstated in the articles is that it’s only on the chopping block if Alaskans refuse to pay their own fares. If they want the State to pay their fares, the system will probably just be sold off or reformed in a major way after October. It’ can’t go on this way, even if the Inland Boatman’s Union wants it to.

PAYING YOUR FARE SHARE

Some 72,876 people live in Southeast Alaska, a region that stretches from Ketchikan to Yakutat. About 45 percent of those people are Juneau residents.

The population of the region is dropping. After the 2020 Census, Southeast Alaska will likely lose one half of a House seat, which means political districts will shift up the coast. By 2045, the State Department of Labor projects there will be just 68,010 residents in the Southeast region, while the entire state will grow by 100,000 people to 837,806.

Paying your own way on the ferry is a new concept for coastal communities, where state subsidies have covered most of the cost of the rides that Alaskans and visitors take to and from roadless communities.

For ferry riders from other places around the world, an Alaska ferry is a cheap form of tourism because the State of Alaska pays over 200 percent of the cost of that trip from Bellingham to Juneau, Haines, or Skagway. Those travelers could pay more, but don’t, at the expense of Alaska, which could redirect that subsidy to other state programs.

Ending the subsidy means someone going from Juneau to Gustavus by ferry wouldn’t pay the $61 fare. He or she would pay $190 for that one-way Costco run, or $380 round trip.

Long ago, before most Alaskans here today were even alive, Alaskans used to pay for their own transportation between coastal communities. The Alaskan Steamship Company ran through Southeast until the state-subsidized ferry system went online with the Malaspina in the early 1960s, and beat the private sector on both price and schedule, putting the company out of business.

But Alaskans don’t use the ferry system as much as they used to. For Sitka, traffic has dropped by more than a third, and the rest of the system usage is down by at least 15 percent, on a steady decline. The reason is because of the comparable cost of travel — it’s just cheaper to fly from Juneau to Sitka than it is to take the ferry. Now, it’s the private sector options that have made ferry travel less appealing.

For far-flung communities in the Aleutians, people mainly substitute the ferry system for barge transportation when moving cars, trucks, and heavy equipment to places where roads will never be built. It’s just cheaper to move a vehicle on the ferry, because the State is paying for most of it.

Most of the ferry routes now are running about half empty, but those empty vessels are pushing water, and the cost to the state is $4.78 per mile per car on board, whereas the state subsidizes road travel at only 2 cents per mile, per vehicle.

What’s the carbon footprint for ferries that run half empty? Each large ferry burns between 3,000 gallons and 5,000 gallons of diesel per day when in use.

[Watch some of the testimony at the House Transportation Committee meeting at this link.]

THERE ARE ALTERNATIVES TO FERRIES

Some communities could be connected by road to shorter ferry routes.

Kake, for example, could have had a road by now to nearby Petersburg. But that road project was killed by the former administration of Gov. Bill Walker.

If that road had been built, it’s possible that the air ambulance plane that crashed on approach to Kake on Jan. 29 would not have been trying to make that landing. The Kake patient could have been taken to Peterburg, where there is a medical facility and a large airport.

The Juneau Access project, which would have taken the Juneau road to Katzehin on the other side of Berners Bay and a 45-minute ferry crossing, was also axed by Walker. These were projects that would have reduced transportation costs dramatically for several communities.

The discussion continues, but at least at the legislative hearing, it was loud and clear that ferry communities do not support reducing their services.

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • Thanks Suzanne for the quick reporting on this issue. I agree in that new road systems and no more ferry subsidies would kick things back into gear.

  • OK so let’s put up toll booths on all the state roads around the rest of the state, wouldn’t want people driving for free on all those subsidised roads.

    • I’d be willing to buy that if I could pay the 2 cents or so a mile that my road costs and the people who rely on ferries paid the $5/mile that the ferry costs. Tolls are us!

    • We do pay for them in the form of gas taxes

      • Road taxes and user related fees cover about 12% of the cost in Alaska. Of that 12% some of it comes from the federal government is money take from residence of the lower 48.
        When it comes to transportation, all Alaskans are getting a handout.

    • Actually the most important, and priority, services of a government are providing for the safety of citizens and infrastructure. Hence yes, roads paid for by public monies. The ferry system does fall under infrastructure as it is a ‘road system’. Entitlement programs should be lower on the list than infrastructure and frankly I prefer my tax dollars go to infrastructure that we all use rather than ‘subsidizing’ the junk food habits of a few via snap. Certainly there is room for streamlining ferry schedules, raising ticket fees, etc. maybe even doing more tourism marketing. Either way, essentially our ferry system is part of our road system which is infrastructure.

  • I think it’s disingenuous to suggest the air ambulance tragedy may not have happened if there had been a road to Kake. It’s also possible that road could have been iced over making a trip by vehicle tragic as well.

    • Ground transportation is not used on much of the road system. If you get hurt and transported to a regional clinic chances are nearly 100% you’re catching a medivac flight.

  • What do we want? North Slope Borrough’s property taxes. Why do we want them? So we can get free money and services from the State.

    .

    We’re all a State when it comes to handouts. It’s everyone for themselves when it comes to payouts. (D) or (R) greed is greed.

  • Petersburg is on Mitkov Island. Kale is on Kupreanof. Did this road include a bridge across the narrows?

    • It’s pretty lame for this author to claim those lives on the fated Guardianflight medivac plane might not have been lost if that Kake patient (that by the way did not require medical transport that night after the plane did not arrive) could have been transported by a ground ambulance to Petersburg. Do you do any research or do you just spew inaccurate information like SO many other people who have a public voice in today’s America. Many things could have potentially stopped that plane from crashing, but an ambulance ride to Petersburg is not one of them. Do your homework before you report such inaccurate opinions!

  • Ridership is down? Huge gaps in schedules will do that. Is ridership down across the year or seasonally?
    Who is responsible for road maintenance outside of Southeast? Should that be privatised?
    Does the state still cover rail system maintenance?
    Seems to me that this is fast becoming us (Anchorage) versus them (Southeast). Turn SE into Cruise Country and get the visitors to pay for everything. Aggressive marketing has packed the ferries during the visitor season (at a premium) and residents are asked to pay the same prices the rest of the year.

    • And yet Anchorage residents have no problems “subsisting” off of the dwindling Nelchina caribou herds and increasing their carbon footprint driving all over the calving grounds with their $20k vehicles.

      .

      Notice we’re back to caring about carbon footprints even though we can’t study the measurable affects of melting permafrost on pur infrastructure because of politics.

    • Short answer on rail no the Alaska railroad funds itself not state coffers

  • The original intent of the ferry system was to build roads where feasible and use short commuter ferries where needed. For some reason we have let a small group of very loud people prevent the original intent from taking place. I say start building, let them whine, you can’t hear their whining over a dozer. Once these roads are built, you’ll see their Subaru’s traversing these same roads they were so adamantly against, all the while enjoying the access they create.

    • Did you just make that up?? That’s plain absurd!

    • I agree. Albeit the ferry system is still part of that infrastructure and some of the proposed road building has been super costly, hence daunting. Still, in long run the return of investment would be better than maintaining, operating and replacing ferries.

  • Just a side note about air travel in much of SE and probably elsewhere in bush Alaska. It’s subsidized federally. Would Alaska Airlines fly a full-sized jet year round to Wrangell otherwise? Probably not. It’s always possible that could go away too. There was the idea long ago of having a road near Telegraph Creek BC which would go to Wrangell then a bridge to Mitkof Island which gives you acess to Petersburg. Then a bridge to Kupreanof would give access to Kake.

    But the one thing I do know…a state income tax, in my opinion, is a bad idea. It gives the state too much access to our money before we decide what we’d like to do with it — ie save it or spend it. It’s just so easy for government to spend other people’s money and often for things the tax payer may be completely opposed to.

  • When almost half the state consists of parks and preserves, road building isn’t the slam dunk people assume. Just ask King Cove………

  • Last fall, I took the ferry roundtrip from Homer to Kodiak. While on board I was chatting with a very kind older women who worked in the gift shop. For some reason she started to tell me about how well her ferry job compensated her. She was very forthright about it, and spoke in terms of feeling guilty about their pay and benefits and how good they have it.

    How much? Nearly $50 an hour to work in the gift shop.

    I challenge anyone without an in-demand degree to go out and find a decent job for even $15 an hour on the Kenai Peninsula. They don’t exist.

    How are the wages and benefits paid to ferry workers equitable to Alaskans who are subsidizing the ferry?

    • First off, there is no gift shop on the ferry anymore . Second, I can assure you, the giftshop steward isnt making 50$ an hour. The master of the vessel makes less than $50 an hour. Back in the day a gift shop steward made 20 to $22 an hour that’s someone that works 12 hours a day, and then donates the other 12 hours of their day.

      • BS! There isn’t a bid Master in the system who makes less than $100K/yr. On a 2180 hour year that is $45/hr. without any premium pay. Now throw in about a 40% benefit load and you have a minimum of $140K and you’re at $65/hour. And since we’re talking about the Southwest System, we can talk about “A Days.” A day off with pay for every day worked. Wanna’ do the math on that? Oh, and I’m willing to bet the loaded wage and benefit cost on a Steward is at least $50/hour. Go do some research and tell me I’m wrong, because pretty good at this stuff.

  • If you want a picture of what overspending does for a state/city, look at New York, both city and state. More taxes are not the answer. Stealing the PFD is not the answer. LESS SPENDING IS THE ANSWER!!!!! There is no legitimate argument against that. Governor Dunleavy is absolutely right. The ferries, for example. The ferries are great. They improve travel and freight hauling for isolated communities. The big drawback is them being subsidized by all the other Alaskans. Private companies that succeed in their business endeavors are not forced to spend on programs that continually lose money. If they did, they would be out of business. Spend within your means!!! Simple. If private enterprise must do it, the state can do it.

    If the public employees, teachers and majority politicians get their way, the PFD will be completely gone in short order. The state reserves will be gone in short order. Then, its huge taxes across the board for the remaining Alaskans. Many life long Alaskans will simply leave. I have been in Alaska for 67 years and I thought I would never leave. I may have to reconsider. I don’t want to but the economics, without the PFD, will dictate that move. Alaska is an expensive state to live in. The PFD helped tremendously when the full amount was paid. Without it and with more taxes, we
    will be done for. Might as well leave Alaska to the ones that destroy it.

    • Open up the Tongass and we could buy amhs

  • How are they subsidized by all other Alaskans when Alaskans pay no income tax? The Alaska Marine Highway system is the only highway in the state that’s subsidized by the riders paying fares.

  • Southwest Alaskans all pay full bore for Everything and comes on commercial barge. Bethel to Quinhagak, 100 miles, $3200 for delivery of my Nissan pickup, that’s after you pay$3500 Anchorage to Bethel.
    Want to grocery shop in Bethel, 340 dollars round trip airfare, 70 as the crow flies.
    Snogo, no groomed trails, 100 miles no help if you break down.

    Cry babies, shut up or move to an urban area. Pay your own way down there, we do out here.

    Give us the dividend and we’ll pay commercial enterprises to full fill our needs.

    Cut cut cut.

    • How much do Juneau, Sitka and Ketchikan residents contribute for their schools? For their water and sewer systems? For their roads and sidewalks? Do Kodiak, Juneau, Sitka, and Ketchikan get power cost equalization? Better start paying attention to how much the imbalance is in other areas. Alaska Department of Education has been heavily subsidizing rural schools for decades. I surmise that Southeast residents have payed far more in ferry system fares than the rural residents have contributed towards their schools.

  • The legislative session is 90 days long, but in recent times has gone way over that. So whenever the session is over for this year, it would be interesting to know just how many of the the “rail-belt” legislators , or any interior representatives have vehicle space reserved on the Alaska Marine Highway System, so they don’t have to drive all the way back home. Many times in previous years I have tried to get to Juneau with my vehicle from Haines, only to find out I could get there, but couldn’t get back because legislators had reserved the Juneau to Haines ferry spaces and it was full. Something to think about when votes for budget cuts are made.

  • Seems like there should be a happy medium here somewhere as long as we keep in mind this is a small state (population wise) with a large rural geographic area. By its nature this may mean tax revenues will be spread thin. Individuals need to keep as much of their income as possible to live. We all pay the “Alaska Tax” at some level be it the price of a gallon of milk or the cost of putting stuff on a barge. To me thats ok. Its part of the deal to live here. The ferry is important. But maybe we need to really look at what serves Alaskans best for the public money spent. I’m no expert though. It is pretty cool having the ferry docking in Bellingham. But maybe we should consider just serving within the state. Would eliminating Prince Rupert & using the old Hyder stop instead make any sense? I’m sure Hyder might appreciate the increase in business (though maybe not if they like things as they are-I don’t know). Or could we somehow tie in efficiently with the BC ferry system?

    Would it really be true that Alaskans could ride free if you eliminated the Bellingham & trans Gulf of Alaska routes at current funding levels as I think Art Chance noted?

    Or maybe if we did that, could the state subsidize airline fares for Alaska residents somehow with the savings? But maybe the PFD sort of does that already.

    It seems like there could be many possibilities that would not necessarily result in the need for large tax increases on the incomes of all Alaskans.

    • The State already subsidizes air travel. Anytime other than the height of tourist season, the majority of the passengers on any airliner other than the SEA – ANC-FAI-Deadhorse routes are travelling on some sort of government paid ticket. To my knowledge the only time that the State has ever tried to make Alaska Airlines compete for State travel was during the Hickel Administration when it tried to push State travel on to MarkAir to try to get AS to negotiate fares for State travel. There are probably still stacks of unused MarkAir tickets somewhere in State offices. No State employee would travel on any other airline so long as they were allowed to get Alaska Airlines miles for their travel and for a long time they were allowed to buy their ticket on their personal Alaska Airlines credit card and get miles for the purchase as well. For awhile we fairly effectively prohibited the personal purchase; I don’t know the state of that now. My sense from the outside is that the organizational culture of the State is completely broken and unfortunately most everybody who might be able to restore it is either uninterested, unacceptable to powerful interest groups, or no longer in the State or on this planet.

      If it weren’t for State travel, there would be little or no direct jet service in Southeast Alaska. Other than the SEA to Deadhorse corridor, most direct service is dependent on State travel, the federal essential air service subsidies, and the bypass mail subsidy.

      • Thanks Art

  • Privatization is the answer.

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