House panel takes first step to restoring ‘basic, minimal’ year-round ferry service

As the budget starts to come together in the House, legislators on a subcommittee that oversees the state’s transportation budget voted Thursday to add $11.3 million of unrestricted general fund dollars to the Alaska Marine Highway System’s budget.

The recommendation is on top of Gov. Mike Dunleavy’s request to add $2.7 million in undesignated general fund dollars to the marine highway for the annual budget that starts on July 1. Both requests include additional millions of dollars in authority to spend out of the Marine Highway Fund, an account where fares and other revenue is deposited.

Combined, the House and governor requests would add a total of $23.43 million to the ferry budget.

The House amendment was made by Kodiak Republican Rep. Louise Stutes, who’s been one of the Legislature’s most vocal supporters of the ferry system. She said she hopes the additional money will “provide basic, minimal service to coastal communities in Alaska” for all 12 months of the year.

“Shelves in grocery stores are empty. Alaskans are missing medical appointments. Mothers are turning to Facebook to find diapers for their babies,” Stutes said in a prepared statement after the vote. “The Alaska Marine Highway System’s struggles are felt statewide. Today’s amendment is about making sure ferry service resumes so coastal Alaskans can get back to life as normal.”

The dire situation facing the Alaska Marine Highway System created by cuts ushered in by Dunleavy has only grown worse since legislators began session, bringing additional attention and pressure for legislators and the governor to find a solution. Currently all mainline ferries are tied up either due to last year’s budget cuts or by unexpected breakdowns and are expected to be out at least through the beginning of March (and it could be even longer).

Before the breakdowns, several communities were already going months without service due to a $43 million cut to the ferry system last year. Legislators hoped to restore $5 million to the budget, but Dunleavy vetoed that money and Dunleavy-aligned Republicans upheld that veto during the first week of session.

Dunleavy has since requested an additional $12 million to cover the repairs and to make up for lost revenue that the administration blames on a ferry worker strike last summer. Though legislators were hopeful the money would add service to the reduced schedule, the administration says the money is just to get the system back on its feet and several communities would still face lengthy gaps in service.

The Legislature has struggled to get a clear answer from the administration about how additional money for the ferry system would be used to restore service. Dunleavy-aligned Republicans cited this lack of information when refusing to override the governor’s veto.

The Legislature finally got its first real look at what it would cost to restore service last week where the administration outlined two different scenarios to close the lengthy service gaps.

Stutes said Thursday’s amendment was based on the proposal for 12 months of service but noted that she’s still working on getting clarity and information on what precisely is needed. She said it’s possible that the money approved on Thursday would be on the higher end of things and it could come down in the House Finance Committee once they get more clarity.

Still, the operating budget is only part of the plan to restore service. The 12-month proposal would also require an additional $23 million in capital spending for improvements and repairs to bring the state’s ferry fleet up to operation. The administration officials said it’s possible that federal funds could come into play to help with that cost but said they were still exploring their options.

The budget recommendations now go to the House Finance Committee to be considered as part of the House version of the operating budget. That request would also need to pass through the Senate, where leadership is supportive of the ferry system, and back to the governor for approval.

The governor has been absent from the latest issues with Alaska’s ferries, spending most of this week—which featured rallies around the state—Outside.

Dunleavy had sought to explore privatizing the ferry system, arguing that it should be run more like a business with a focus on the bottom line. A report the state released after months of delays said it’s essentially impossible to privatize the system as only a few routes would even come close to breaking even.

Still, the governor has pushed ahead and formed a working group to explore reshaping the system. Stutes, who is a member of the committee, told the Juneau Empire’s Peter Segall that she doesn’t know when the group’s meeting will be held.