Draft ferry study lays out options for system’s future

Published: Jan. 16, 2020 at 11:50 AM AKST
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A study commissioned by Alaska Gov. Mike Dunleavy’s administration recommends running ferries as day boats where possible and providing long-term contracts to private companies to help fill service gaps.

The draft study by Northern Economics, released by the state transportation department Wednesday, found selling or leasing system assets to private entities is not feasible if minimum service levels are stipulated. Even without such stipulations, companies could have difficulty breaking even on existing routes, according to the draft.

The draft looked at other options, too, with an objective of reducing the system’s operating subsidy to $24 million. It found a public corporation model could work under that parameter with higher passenger fares, lower crew wages and service changes that would leave some communities without ferries for extended periods.

Northern Economics was asked to analyze options to reduce the state’s financial obligations for the ferries, an important transportation link for many coastal communities not connected to the road system. While Dunleavy proposed a roughly $95 million cut for the current-year budget, the Legislature agreed to a cut of about $44 million. Deputy transportation commissioner Mary Siroky told the Marine Transportation Advisory Board, meeting in Anchorage on Wednesday, that was a “huge policy statement” that changed the way the marine highway system was to work.

Sen. Jesse Kiehl, a Juneau Democrat, in an interview said the policy decision made by the legislature was to keep the system going. “We couldn’t get the kind of funding that Alaska needs past this governor,” he said.

Rep. Sara Hannan, a Juneau Democrat, said she will argue this session that the cuts were “devastating beyond what we recognized them to be” and that additional funding should be restored.

The draft suggests any changes to service levels, schedules or fares be made keeping in mind how that would affect state financial support. Using data provided by the system, the draft states, the study team found increasing the number of sailings in Lynn Canal in southeast Alaska appears to increase revenue more than it increases costs. But it recommends testing this first before making permanent changes that can be hard to reverse.

The draft recommends looking at cutting communities that make it difficult to offer 12-hour or 14-hour day-boat service to higher-volume routes and whether any dropped communities could be candidates for service from private operators.

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