The state ferry system carried 181,000 passengers in 2023, still short of the pre-COVID numbers in 2019 and down substantially from almost 340,000 in 2012 and more than 420,000 in 1992.
Overall vehicle traffic also is down, from more than 115,000 in 2012 to 63,000 last year.
Much of the decline corresponds to a reduction in the number of vessels in operation, according to statistics presented to a state Senate budget subcommittee on March 19.
The fleet provided almost 400 “operating weeks” in 2012, with each week a ship is at sea counting as an operating week. By 2023, that number was down to 245.
The numbers include Southeast and Southwest ferry service, including the shuttle runs between Ketchikan and Metlakatla.
With fewer ships in service — such as the Kennicott, which was tied up much of last year due to a crew shortage — the Alaska Marine Highway System underspent last year’s budget, Craig Tornga, the marine director, explained to the Senate Finance Subcommittee in its review of the ferry system’s budget request for fiscal year 2024-2025.
In calendar year 2023, the system spent almost $14 million less, about 10%, than the $144 million budgeted for operations. Fewer operating weeks and smaller ships that consume less fuel led to the savings.
While running fewer ships — whether due to crew shortages or maintenance issues with the aging vessels — saves money, it also reduces service to coastal communities. For example, it would require more vessels at sea to restore year-round service to Cordova and Kodiak, Tornga explained.
Revenue systemwide declined in calendar 2023 by about 5% from the prior year. Passenger and vehicle fares covered just under 30% of the system’s operating expenses last year, with state and federal money providing the majority of its revenues.
The Legislature and governor have relied heavily on federal money the past couple of years since the 2021 Infrastructure Investment and Jobs Act. The state, however, last year received a much smaller federal grant — about $38 million — than expected for the ferry system, Tornga told senators.
The smaller federal grant came up almost $28 million short from what was expected. The Marine Highway System plans to cover about half of the gap with money left over from underspending in calendar 2023 but will need a supplemental appropriation from the Legislature to cover the other half.
The ferry system’s budget request now before the Legislature for the fiscal year that starts July 1 assumes a federal grant about double what the state received last year. The state has applied for $76 million in federal infrastructure funding, Dom Pannone, program management and administration director for the ferries, told the Senate subcommittee.
Sitka Sen. Bert Stedman, co-chair of Senate Finance, asked Pannone what would happen if the federal grant comes up short again, like it did last year. Pannone answered that the ferry system would come back to the Legislature to seek more state money to cover the shortfall, while also seeking other federal aid.
Stedman said it’s important for legislators to know what the ferries need as they write the state budget. “We need to try to get this year’s budget right, if we can.”
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