Ferry system swims or sinks with federal aid

The following editorial was published by the Wrangell Sentinel.

The Alaska Marine Highway System has never fully paid its own way with ticket revenues; it’s always needed state money to cover the gap between what it costs to operate the fleet and what it can collect from travelers.

It’s just like asphalt and concrete highways, which need funding in the state budget to cover expenses.

The dilemma is that the gap between ferry system revenues and expenses has widened over the years as service has been cut back — fewer tickets sold for fewer sailings means less revenue.

The other dilemma is political. More Alaskans, and their state legislators, drive the roads than ride the ferries, and prefer more money for pavement and less for subsidizing the ferry system.

Thankfully for coastal communities, the federal government sailed in with its checkbook.

Or, more accurately, Alaska’s senior U.S. senator and former Southeast Alaska resident Lisa Murkowski successfully steered her colleagues to write into the Infrastructure Investment and Jobs Act of 2021 a massive flood of dollars to help the state ferry system pay its operating expenses, fix up its terminals and build new ships.

In the first three years of the five-year program, the federal aid totaled almost $550 million. But now the federal money has run aground on the rocks of bureaucratic delay. Almost $78 million that was anticipated to cover operating expenses this calendar year is still waiting on the Federal Transit Administration to issue its annual notice of the grant program — a notice that should have been issued last year.

Alaska Department of Transportation officials reported to legislators last week that the delayed federal dollars are needed to cover almost half of the ferry system’s 2026 operating budget.

Without the federal agency getting off the dock and climbing aboard, the Alaska Marine Highway System could be out of money this summer.

Juneau Sen. Jesse Kiehl summed it up at a Senate Finance Committee hearing on Feb. 2: “Right now, we have a federal chaos problem.”

Though the Trump administration seems preoccupied with all sorts of things other than keeping government running smoothly, part of the sinking feeling is of Alaska’s own making. The governor’s office has been all too eager to use the federal dollars to replace state dollars in the budget the past few years, setting up the marine highway to crash when the federal checks stop coming.

Which leads to two questions: What happens if the state money does not arrive in time this summer? And what happens when the federal aid ends in two years? The answers will be costly to the state and ferry travelers.