Gov. Chris Gregoire's proposal to have counties take over the state ferry system seems dead in the water. Guest columnist Alex MacLeod provides some perspective on Washington State Ferries and its role as extensions of the state road system.
WHEN Gov. Chris Gregoire last month proposed having ferry-served counties take responsibility for meeting the funding needs of the state ferry system, she said the state could no longer afford “to bail” the ferries financially. “There’s nothing to bail from,” she added.
While the Legislature appears to have killed the governor’s ill-considered proposal and seems ready instead to legislate new management accountability and changes in labor agreements (each of which probably has some merit), no one has yet advanced a plan to adequately fund basic ferry operations, much less the system’s pressing capital needs.
And more to the point, no one has challenged the governor’s baseline assertion that the state has been bailing out ferries over the past decade, or that there’s nothing left to bail with.
The plain fact is that neither assertion is true.
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Whether one thinks of ferries as a regional icon, a tourist draw, a water-born form of mass transit or moving bridges, ferries are, by law, part of the state highway system. That was established by voters when they amended the state constitution to ensure that motor-vehicle-related taxes, such as gas taxes and license fees, were to be dedicated exclusively to “highway” purposes. Ferries were listed as one of those purposes, along with roads and bridges.
Along the way, the state created various “excise” taxes added on top of basic vehicle-license fees. A chunk of those “excise” taxes went to ferry operations, with other funds going to counties and cities for their general use. From a government perspective, it was a perfect form of taxation because it was based on the value of vehicles; when the values went up, so did the tax receipts. Tax receipts would easily keep up with inflation.
But the bureaucrats got greedy and started setting very aggressive values on vehicles. People realized they were being taxed on values much greater than what they could sell their vehicles for and so, when given the chance, they revolted and killed the excise taxes. When the Legislature agreed to end the tax, ferries lost about half their operational funding.
Who made up the lost money? A big chunk of it came from ferry riders, who saw fares nearly doubled on average in less than a decade. Ferry fares now cover fully 70 percent of the system’s operating costs. Comparable ferry systems recover less than 50 percent of operating costs from fares. Other savings came through significant cuts in service.
Meanwhile, gasoline taxes were raised twice, by a total of nearly 15 cents a gallon, and the budget for the state’s Department of Transportation, of which Washington State Ferries is a part, grew from $2.83 billion to $7.5 billion. Yet state funding for ferries, as a percentage of the Transportation Department budget, has fallen from 9.1 percent to 3.9 percent in the current budget.
And the governor calls that “bailing”?
WSF’s annual funding gap is about $30 million right now, a number that could be cut in half by changes mandated in the current legislation. Even if you add in another $110 million in capital money for a badly needed (and nearly a decade overdue) 144-car ferry to keep the system operating, you’re talking about a tiny fraction of the state’s transportation budget.
Yet the state’s answer, so far, is to once again cut service, and the cuts will be significant. The result of that — beyond personal hardships of tens of thousands of people who have no other way to get to and from home or work — will be loss to the state’s general fund of revenues from property, sales and business taxes, all of which history shows will fall as service continues to decline.
It’s long past time for the governor and the Legislature to do what the constitution requires and provide ferries with the funding it needs as part of the state highway system. It’s not that big of a challenge.
Alex MacLeod is a former chair of the San Juan County Ferry Advisory Committee and lives on Shaw Island.