Ferries and the Transportation Budget

Adapted from a comment on a story about a candidate forum in MyEdmondsNews.com

During a candidate forum hosted by the Edmonds Chamber of Commerce, I responded to two questions by talking about ferries and the transportation budget. My comments centered on raising fares to make the ferries self-supporting, at least with regard to operating costs.

Here’s some background data.

The Executive Summary of the Department of Transportation’s (WSDOT) 2015-17 Budget Request says, “The four primary transportation accounts that support WSDOT expenditures are projected to have an aggregate 2015-17 deficit of approximately $72 million…” (page 2). Looking further, at the Operating Budget, WSDOT is requesting $498M in operating funds for our ferry system (page 6). The revenue forecast for the ferries is about $356M (according page 38 of the Transportation Revenue Forecast Council’s February 2014 report). That means a deficit of approximately $142M — nearly double the amount of the hole in the transportation accounts.

In November 2000, the Blue Ribbon Commission on Transportation issued its Final Recommendations to the Governor and Legislature. Among these recommendations (number 16) was “Seek to achieve a 20-year goal of 90% to 100% farebox recovery [of operational costs].” In 2000, farebox recovery was 64.8% (according to a WSDOT report issued in 2010 – see Table 4.5). When the head of Washington State Ferries (WSF), David Moseley, retired earlier this year, he proudly claimed WSF had a farebox recovery rate of about 70%. In fourteen years, farebox recovery has made little progress toward the Commission’s recommended goal. But if we could close the half of the farebox recovery gap — increasing it to 85%, we would close the $72M hole.

That comparison report also says (just below Table 4.5), “a 2008 survey of 13,000 riders found rates to be relatively elastic, with ferry ridership estimated to decrease just 4% if a 10% rate increase were imposed in the future, further implying that non-discretionary trips were less price-sensitive than discretionary trips.”

We need not impose large fare increases across the system. The Edmonds-Kingston route is pretty close to self-sustaining. According to WSF’s route statements, that route recovered 95.5% of costs at the farebox in 2012, and had an overall revenue recovery ratio of 97.0%. In 2004, this route had farebox recovery of 120.4% — it was subsidizing other parts of the system. The Mukilteo-Clinton route also does pretty well, with 88.3% farebox recovery.

On the other hand, the Port Townsend-Coupeville route has long been the most subsidized route in the system, with farebox recovery in 2012 of only 39.3%. That route has much higher utilization — WSF recommends you make reservations — so why are we subsidizing 60% of it’s costs?