The Dunleavy administration is looking at privatizing Alaska’s state-run ferry system, according to Gov. Michael Dunleavy’s budget proposal. That’s on top of a proposed 75-percent cut to the system’s budget.
The state’s Department of Transportation and Public Facilities will work with an unnamed marine consultant to investigate options to move toward privatization or a public/private partnership, according to a summary document released Wednesday.
For many coastal communities the state-run ferry is the only link to the road system. The marine highway is an arm of the state’s transportation department and largely subsidized by the Legislature. Fares recover about a third of operational costs. The overall goal of privatization is to reduce the state’s financial obligation and liability, the document says.
State funding to the Alaska Marine Highway System has been decreasing in recent years, leading to scaled back routes, mechanical breakdowns and service disruptions. The governor proposes cutting the system by nearly $32 million.
The document also notes that ferries run on average at around half-capacity and suggests smaller vessels on some routes.
An effort is already underway to reform the ferry system towards a public corporation model with its own governance board. The summary document does not mention this effort.
The Senate Finance Committee will begin looking at this and the governor’s other budget proposals on Thursday.
This is a developing story. Check back for updates.
Jacob Resneck is CoastAlaska's regional news director in Juneau.
