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Here’s how state ferries are actually funded | FerryFare

Adieu, Rhodie. The 65-year-old MV Rhododendron, classic and still gorgeous, retired in February. Please check out Rex Lee Carlaw’s entertaining retrospective, which will be in next month’s edition.  For the fourth year, the governor presented her budget promising fiscal salvation if only ferry service was cut. Ferries are funded — and no service cuts.

The state Department of Transportation denizens in the capital are inarguably entitled to their own opinions, but not their own facts, so here, again, is an overview on how transportation (including ferries) in Washington is actually funded.

The Department of Transportation receives more than $2 billion per year from gas taxes and vehicle fees. This money is stashed into three funds. The “Motor Vehicle Fund” is for maintenance and construction, the “Multimodal Fund” is for other transportation purposes and the “Bond Fund” is to pay off debt.

After all the angst over diminished ferry service and growing potholes, the Legislature passed an agglomeration of fee increases to fill funding shortfalls in the Motor Vehicle and Multimodal accounts. The Legislature resorted to fee increases because, unlike gas tax hikes, fee increases only require a simple majority vote.

We have a shortfall because the Bond Fund’s mandatory interest payments are starving the other two funds. During the years of exuberant 10 percent-per-year revenue growth (2004-09), WSDOT signed up for $10 billion of bonded “megaprojects” like the 520 Bridge replacement and the viaduct tunnel.

Legislators were counting on continued revenue growth to pay for ongoing highway maintenance and operations (including ferries). When revenue growth dropped to the current 2 percent per year, WSDOT was in trouble and its credit card was maxed out.

Ferry financing
There are two ferry budgets. The capital budget pays for things that last more than one year and the operating budget pays for everything else. As capital purchases support labor and business interests, projects like buying a 144-car (world’s-most-expensive) ferry sail through Olympia with nary a ripple. The squabbles in Olympia are always about the operating budget — for example, the fight over Rep. Drew Hansen’s sensible request that WSF guarantee the service they’re going to provide for the money that we’re paying them.

WSF’s operating budget
It takes $224 million per year to run the ferries.  Labor is 52 percent, fuel 37 percent and maintenance 13 percent.  “Recovery rate” refers to the percentage of operating costs that are paid for by fares and advertising. After the profusion of fare hikes starting in 2000, WSF’s recovery rate peaked at 80 percent in 2006. Since then it has dropped to 65 percent, pulled down by labor costs, which have increased by $20 million; and fuel costs, which have increased by $14 million.

The $45 million per year that’s needed to fill the gap between recovery rate and total operating costs is split evenly between the Motor Vehicle Account and the Multimodal Account.  Although this subsidy is only 2.2 percent of WSDOT’s revenue, every year ferry riders are accused of milking the cow through the fence, even though we also pay those fees and taxes along with our fares.  Good timesJoin the hoopla and hilarity on Kingston’s Ferry Advisory Committee. We need a regular commuter to take over from the intrepid, yet genteel, Paul Lundy.  Contact Rebecca Pirtle, the county’s volunteer coordinator, at 337-4650, or apply online.

— Walt Elliott is chairman of the Kingston Ferry Advisory Committee. He is also a Port of Kingston commissioner. Contact him at elliottmoore@comcast.net.

 

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