News

20-year transportation plan is ‘$38 billion short’; ferry tax explored

Richard Ford and Carol Moser of the state Transportation Commission ponder the fate and funding woes of the state ferry system as transportation specialist Steve Pickerell of Cambridge Systematics presents an analysis of the agency’s finances, Thursday in Friday Harbor.                                                                                 - Scott Rasmussen
Richard Ford and Carol Moser of the state Transportation Commission ponder the fate and funding woes of the state ferry system as transportation specialist Steve Pickerell of Cambridge Systematics presents an analysis of the agency’s finances, Thursday in Friday Harbor.
— image credit: Scott Rasmussen

It would appear state transportation officials are leaving no stone unturned in a far-flung search for new sources of revenue that might help Washington State Ferries better cover its costs.

For now, that includes the prospect of having ferry-served communities share the financial burden of operating boats and maintaining terminals by taxing themselves and putting the revenue they raise into the ferry-funding equation.

Islanders got a preview of solutions that might be in store for WSF when the state Transportation Commission met Thursday in Friday Harbor. Members of the commission, though sympathetic about ever-increasing ferry fares and parking prices at the Anacortes ferry landing, said there’s a lack of resources to satisfy all the state’s transportation needs and that competition is fierce for a slice of that transportation pie.

Commission Chairman Dan O’Neal added that without some change in the state’s revenue-gathering formula, only about half the investment that’s called for in the state’s 20-year transportation plan will be available.

“We’re $38 billion short in meeting the objectives of the state,” O’Neal said. “So, we have to set priorities.”

A combination of soaring fuel prices and rising labor costs have, in large part, been blamed for WSF’s recent operational-budget shortfall, about $20 million a year.

WSF generates roughly $160 million a year, or 68 percent of its operational costs, through ticket sales. But the loss of the state motor-vehicle excise tax, which resulted after voters approved Initiative 695, also eliminated $52 million in annual revenue — about 10 percent of the 1999 operating budget — for ferry operations and terminal maintenance.

WSF’s capital budget, which pays primarily for new boats and terminal replacements, took an even larger hit; about $225 million, or 80 percent of the 1997-99 two-year capital budget.

Roughly $42 million in new revenue would be generated every two years if all eight ferry-served counties were to place a 1 cent tax on fuel, according to a recent, though still unfinished, study by Cambridge Systematics. About $150 million would be raised if all eight boosted their respective sales tax by 1/10th of a percent, according to the study.

The creation of so-called transportation benefit districts, which are able to sell bonds, levy certain types of taxes and pursue grants, is also noted in the study as a potential new source of local funding. Counties and cities can either join forces or go it alone, and can establish TBDs with limited boundaries.

Commissioner Carol Moser, a former Richland City Council member, said that the Tri-Cities area has reaped benefits from such a district. Because of its ability to bond, a TBD can also qualify for federal transportation funds with 20-percent local matching funds.

Known as the long-term ferry funding study, the Cambridge report was financed by the Legislature as part of its ferry financing legislation approved in 2007. That study, along with a survey of ferry riders conducted this year, is expected to guide the transportation commission in finding a remedy for the chronically cash-strapped ferry system.

Though the number of taxing tools available to cities and counties are many, Orcas Island’s Bob Distler, one of the commission’s seven members, knows it would be a tough sell.

“If you use the ‘T’ word,” Distler said, “legislators on both sides of the state run from you.”

At one time, many argued that a reservation system would be a tough sell. But according to the survey, conducted by Opinion Research Northwest, which polled 13,000 riders and 1,240 Puget Sound residents by phone, a reservation system is gaining favor, among summer ferry riders in particular.

Two out of five riders would be willing to pay a fee for a reservation. And some drivers, according to the survey, would be willing to pay as much as 20 percent over the ticket price to reserve a space.

Commission Chairman Dan O’Neal added that without some change in the state’s revenue-gathering formula, only about half the investment that’s called for in the state’s 20-year transportation plan will be available.

“We’re $38 billion short in meeting the objectives of the state,” O’Neal said. “So, we have to set priorities.”

A combination of soaring fuel prices and rising labor costs have, in large part, been blamed for WSF’s recent operational-budget shortfall, about $20 million a year.

WSF generates roughly $160 million a year, or 68 percent of its operational costs, through ticket sales. But the loss of the state motor-vehicle excise tax, which resulted after voters approved Initiative 695, also eliminated $52 million in annual revenue — about 10 percent of the 1999 operating budget — for ferry operations and terminal maintenance.

WSF’s capital budget, which pays primarily for new boats and terminal replacements, took an even larger hit; about $225 million, or 80 percent of the 1997-99 two-year capital budget.

Roughly $42 million in new revenue would be generated every two years if all eight ferry-served counties were to place a 1 cent tax on fuel, according to a recent, though still unfinished, study by Cambridge Systematics. About $150 million would be raised if all eight boosted their respective sales tax by 1/10th of a percent, according to the study.

The creation of so-called transportation benefit districts, which are able to sell bonds, levy certain types of taxes and pursue grants, is also noted in the study as a potential new source of local funding. Counties and cities can either join forces or go it alone, and can establish TBDs with limited boundaries.

Commissioner Carol Moser, a former Richland City Council member, said that the Tri-Cities area has reaped benefits from such a district. Because of its ability to bond, a TBD can also qualify for federal transportation funds with 20-percent local matching funds.

Known as the long-term ferry funding study, the Cambridge report was financed by the Legislature as part of its ferry financing legislation approved in 2007. That study, along with a survey of ferry riders conducted this year, is expected to guide the transportation commission in finding a remedy for the chronically cash-strapped ferry system.

Though the number of taxing tools available to cities and counties are many, Orcas Island’s Bob Distler, one of the commission’s seven members, knows it would be a tough sell.

“If you use the ‘T’ word,” Distler said, “legislators on both sides of the state run from you.”

At one time, many argued that a reservation system would be a tough sell. But according to the survey, conducted by Opinion Research Northwest, which polled 13,000 riders and 1,240 Puget Sound residents by phone, a reservation system is gaining favor, among summer ferry riders in particular.

Two out of five riders would be willing to pay a fee for a reservation. And some drivers, according to the survey, would be willing to pay as much as 20 percent over the ticket price to reserve a space.

We encourage an open exchange of ideas on this story's topic, but we ask you to follow our guidelines for respecting community standards. Personal attacks, inappropriate language, and off-topic comments may be removed, and comment privileges revoked, per our Terms of Use. Please see our FAQ if you have questions or concerns about using Facebook to comment.
blog comments powered by Disqus

Read the latest Green Edition

Browse the print edition page by page, including stories and ads.

Sep 17 edition online now. Browse the archives.