Budget glitch could leave ferries without funding

Crew members stand on the front deck of the ferry Malaspina as it pulls away from Juneau’s Auke Bay Ferry Terminal Sept. 18, 2017. (Photo by Ed Schoenfeld/CoastAlaska News)

One Southeast senator said that the possibility that the Alaska Marine Highway System could shut down this spring is an intentional attempt to damage the ferries.

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A little-known budget provision to make up for a shortfall in state health-care funding will pull about $23 million out of the system’s spending for this fiscal year.

The governor’s budget director Pat Pitney described the problem in a Sept. 19 letter to House and Senate finance leaders.

Sitka Republican Sen. Bert Stedman told those attending the Southeast Conference’s annual meeting in Haines that lawmakers should fix the problem.

Otherwise, the ferry system will run out of money in April.

Sitka Republican Sen. Bert Stedman says the ferry system is in financial trouble because of actions by his Senate colleagues. (Photo by Skip Gray/360 North)

“They will not have the authority to run the system if the Legislature does not appropriate the money, period,” Stedman said.

The ferry system will have to wait until the new budget year, which begins in July, to resume sailings if the funding isn’t replaced.

Transportation Commissioner Marc Luiken doesn’t expect that to happen.

“I think what we need to really focus on – and this is certainly what the administration is going to be focusing on – is how do we restore that funding. How do we make sure that that funding is there, so we can continue to fulfill that commitment that we have to coastal Alaskans?” Luiken said.

Pitney detailed the shortfall in her letter. She said a spending bill meant to plug budget holes called for a marine highway account to fill those gaps if there wasn’t enough money.

When Medicaid spending was higher than planned, the $30 million ferry account lost around three-quarters of its balance.

Pitney’s letter doesn’t assign blame.

But Stedman pointed to Senate budget-writers who think the ferry system is too expensive.

“Two years ago, roughly, there was some language put in the operating budget. I’ve got to hand it to the guys. They were very creative in the skullduggery and the downright sleazy budgeting that went on,” Stedman said. “It got by the Department of Law, it got by the administration, it got by my office and it was triggered this year.”

Stedman said the $23 million cut represents about a third of the direct ferry funding provided by the Legislature.

Other funds comes from ticket sales and other revenues.

Pitney said the governor will seek to restore the funding through a supplemental budget bill when the Legislature convenes early next year.

Stedman said it will take a strong effort by the governor and the state House to get the funds past the ferry system’s enemies in the Senate.

“We need two people with some balls to tell them in the House majority they’re not going to support the budget if they don’t put the damn money in the marine highway,” Stedman said. “If they don’t do that, my colleagues in the Senate will cut our throat. And I can’t put it any more plainly than that.”

Southeast’s four representatives are members of the House majority coalition. That caucus has a slim majority that needs all members’ votes to pass a budget.

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Ed Schoenfeld, CoastAlaska - Juneau
Ed Schoenfeld is Regional News Director for CoastAlaska, a consortium of public radio stations in Ketchikan, Juneau, Sitka, Petersburg and Wrangell. He primarily covers Southeast Alaska regional topics, including the state ferry system, transboundary mining, the Tongass National Forest and Native corporations and issues. He has also worked as a manager, editor and reporter for the Juneau Empire newspaper and Juneau public radio station KTOO. He’s also reported for commercial station KINY in Juneau and public stations KPFA in Berkley, WYSO in Yellow Springs, Ohio, and WUHY in Philadelphia. He’s lived in Alaska since 1979 and is a contributor to Alaska Public Radio Network newscasts, the Northwest (Public Radio) News Network and National Native News. He is a board member of the Alaska Press Club. Originally from Cleveland, Ohio, he lives in Douglas.