New Alaska ferry plan will use federal aid to help dodge last-minute schedule cuts

JUNEAU — Gov. Mike Dunleavy and state legislative leaders have agreed on a plan to fund Alaska’s ferry system in advance, preventing abrupt changes to ferry schedules if the system’s budget is cut in the future.

Under the plan, Alaska will use federal economic aid to fund the Alaska Marine Highway System for the next 18 months. After that period, the state’s ferries will use a January-through-December budget calendar.

That means any cuts to the ferry system’s budget during the spring legislative session won’t take effect for six months or more, allowing riders to change their plans well in advance.

The advance funding also includes a small increase, potentially reducing the number of weeks that ships are laid up for lack of operating funds.

House Speaker Louise Stutes, R-Kodiak, called the agreement “tremendous.”

“By stabilizing the scheduling, that’s going to increase ridership, which is going to increase revenue,” she said.

The agreement is not final until it is passed by the House and Senate, then signed by Dunleavy as part of the state budget. With the governor and high-ranking officials in both legislative chambers on board, its approval seems likely.

Last year, a task force organized by Dunleavy concluded that the ferry system’s existing budget structure “hinders marketing and sale of bookings, misses revenue capture opportunity, and imposes greater administrative burdens.”

The commission recommended the governor and Legislature “forward fund two or more years of AMHS operation,” and the new plan is a smaller version of that recommendation.

Dunleavy and Sen. Bert Stedman, R-Sitka, announced the agreement last week during a trip to Southeast Alaska, and the proposal was included in a revised version of the state operating budget being considered by the House Finance Committee this week.

“We’re supportive of forward-funding the Marine Highway System,” said Rep. Neal Foster, D-Nome and co-chair of the committee.

Robert Venables, a member of the ferry commission, said the agreement is “an awesome beginning. It’s something we have hoped for for quite some time.”

He emphasized the word “beginning,” saying that the ferry system still has many problems, including the way the system is managed and the fleet’s aging ships, some of which were built in the 1960s.

The mainline ferry Matanuska, for example, is stuck in Ketchikan due to engine trouble.

Last week’s agreement also includes plans to install crew quarters aboard one of two new Alaska-class ferries built specifically for voyages in Southeast Alaska. That would allow the ship to serve Prince William Sound, alleviating some problems.

Sen. Stedman said he believes the state’s next ferry project should be to replace the ferry Tustumena, which was built in 1964 and sails to Kodiak and Dutch Harbor, among other ports.

Venables said he hopes the Legislature will pass legislation giving the ferry system more independence from state government.

“If you don’t solve the decision-making, we’ll snatch defeat from the jaws of victory,” he said. “We have to solve the governance.”