by Paula Hammond and David Moseley

There are rough waters ahead that threaten Washington’s world-class ferry system and it’s on us to do something about it. Our picturesque ferries serve 23 million people a year and help define us throughout the country and around the world, but the future of this system, as we know it, is in jeopardy.

This week, Gov. Gregoire offered one approach to fix our ferries and preserve these vital marine highways that are as important to the Pacific Northwest economy as major freeways. The governor proposed creating a regional ferry district to operate the ferries. The proposal would put decision-making in the hands of a district board that is directly accountable to customers and ferry-served communities and divide its funding between the state and the region. The district would include all or some of Western Washington counties with ferry service.

Why is such a drastic change necessary? The ferry system, which operates 20 terminals on nine routes serving commuters, vacationers and commercial interests, is in a funding crisis and, in fact, is not sustainable at the service level travelers have come to expect.

Washington State Ferries (WSF) lost 20 percent of its operating support and 75 percent of its dedicated capital funding when voters approved Initiative 695 in 1999 and the Legislature enacted the Motor Vehicle Excise Tax reductions during the 2000 legislative session.

Since then, hundreds of millions of dollars have been transferred to WSF from motor vehicle funds to keep the current level of ferry service intact. To keep operating, WSF will require continued subsidies over the next 10 years. Beginning with the 2011-13 biennium, the 10-year projection for ferry operations and capital funding is a shortfall of more than $900 million. That level of transfers to subsidize the ferry system, in a time of declining motor vehicle account revenues, is not financially sustainable.

Over the past two years, WSF has made progress in significantly reducing expenditures by $28 million annually. In addition, our employees did not take their arbitrated salary increase, which saved $17 million. The governor’s budget for FY2011-2013 proposes administrative and non-service operational cuts of $1.2 million per year. We are cutting costs wherever we can; for example, we have reduced overtime costs by 10% between FY2009-FY2010 and we are on track to make further reductions in FY2011.

Something needs to change and the governor’s proposal is one solution for consideration. The state cannot meet the ferry system’s funding challenges on its own. Currently, it is funded primarily from two sources: fares and state taxpayers. The governor’s proposal for a regional ferry district would have local taxing authority – adding a critical third leg to the stool to meet the long-term needs of this Washington icon on which so many depend. It would also provide those that have financial responsibility for the ferry system a direct role in its governance and policies.

Ultimately, legislators, local officials and ferry riders will have to come to grips with the serious funding problem that has been with the ferry system for several years and find solutions. Absent major reform, the ferry system faces a drastic financial shortfall and customers will see unpredictability year after year. This means old terminals, even older ferries, and declining service.

Paula Hammond is the WSDOT Secretary of Transportation; David Moseley is the Assistant Secretary, Ferries Division.