Final state ferry funds from five-year federal infrastructure bill released after long delay

$410M includes $153.4M to replace LeConte, $37.6M for Cascade Point terminal; $161.2M is for operations, a use criticized in previous years of funding

The MV LeConte docked at the Auke Bay Ferry Terminal on Sept. 4, 2025. (Jasz Garrett / Juneau Independent)

By Mark Sabbatini

Juneau Independent

Hundreds of millions of dollars for the Alaska Marine Highway System held up for many months by what a Juneau lawmaker called a "federal chaos problem" are now being awarded as the final installment of a five-year allocation in the 2021 Bipartisan Infrastructure Law, officials announced Friday.

The $410 million includes $153.4 million to replace the LeConte ferry, $37.6 million for the Cascade Point Ferry Terminal, $33.4 million to modernize the Kake Ferry Terminal, $20.6 million to expand the Saxman Seaport, and $4 million to modernize reservation and other customer service functions, according to a press release issued by Gov. Mike Dunleavy’s office Friday.

Also included is $161.2 million for state ferry operations, a use that in the past has been heavily criticized by Sen. Lisa Murkowski, R-Alaska, who played a key role in securing the five years of funding she said was intended to upgrade and expand AMHS’ aging ships and infrastructure.

The funding was hailed as a Trump administration action during a press conference Friday by Dunleavy, all three members of Alaska’s congressional delegation, and U.S. Transportation Under Secretary for Policy Ryan McCormack. Also noted was the delegation and governor lobbying the administration for the funds after they were put on hold.

"Until you have it you don't have it and that's where we were sitting last year," Murkowski said. "That's why there was a great deal of anxiety about whether or not we would be able to count on the grants coming forward at all."

The 2021 bill signed by President Joe Biden established the Federal Transit Administration’s rural ferry program with nearly $1 billion, with Alaska set to get most of that during the five-year span. The Trump administration failed to open the program’s annual grant process last year for reasons that went unexplained.

That triggered concerns Alaska’s ferry system might run out of funds this summer since the federal program was paying nearly half of AMHS’ operating expenses, with state Sen. Jesse Kiehl telling the Alaska Beacon in February "we have a federal chaos problem.”

In April the FTA announced $454 million in grants were being offered, with Alaska officials anticipating the $410 million intended for the state ferry system would be part of that funding.

The $410 million announced Friday brings total federal funds for the state ferry system to $1.1 billion, according to Murkowski. A portion of the total amount comes from sources besides the FTA’s rural ferry program.

While most of the projects listed in Friday’s press release are uncontroversial, the Cascade Point Ferry Terminal has been subject to considerable opposition by people who say it will make travel to and from Juneau more difficult. Questions are also being raised about whether the Dunleavy administration is pushing the project to benefit a mining company that wants to use the site for an ore shipping terminal. Construction that was supposed to start this year is on hold due to questions raised by the U.S. Army Corps of Engineers.

Murkowski in February said the Dunleavy administration has “all but ignored the opportunity to save our marine transportation system” by diverting much of the federal funding to operations — allowing him to use fewer state dollars on that expense — rather than system improvements. The ferry system has ranked at the bottom of state Infrastructure Report Cards issued in 2021 and 2025 by the American Society of Civil Engineers, with “D” grades in both reports.

When asked about the plan to again use a significant portion of the final allocation of funds for operations, Murkowski said "I would like to see the vast majority of these funds go towards making sure that we have the ships that can show up on time to meet the needs of Alaskans."

"The operating funds don't do us any good if we don't have the ships in the water," she said.

Dunleavy, when asked to respond to Murkowski’s previous criticisms, echoed comments by his transportation commissioner that ships and infrastructure have "been getting an overhaul and will continue to get an overhaul."

Ryan Anderson, commissioner of the Alaska Department of Transportation and Public Facilities, earlier during the press conference highlighted projects including a planned replacement vessel for the 62-year-old Tustumina, and repairs to other vessels and 10 ferry docks.

Using some of the federal funds for operations was defended by Sen. Dan Sullivan, R-Alaska, who noted concerns are being expressed by people in Alaska about gaps and delays in ferry service. As such, he said ensuring such funds are considered appropriate for operations as well as maintenance have been part of the delegation’s recent efforts in Congress.

The state in 2025 approved a 20-year plan for the ferry system that relies heavily on federal funding. Not specifically answered during the press conference was if Alaska will be able to count on such funds in future years for projects and operations, given the lapse of what’s being allocated in the infrastructure bill.

"From a department's perspective as we approach surface reauthorization and other transportation programs reauthorization it is interesting and helpful for us to have that track record of successes and how the dollars are being spent on any program," McCormack said. "And what we're seeing in Alaska, especially when it comes to ferry programs, is that the state is really outkicking its coverage (and) doing a great job with the use of ferry dollars."

• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.