Gregoire: Create regional ferry district to manage system

Gov. Chris Gregoire on Thursday proposed handing over the nation's largest ferry system to a new regional agency as a "bold" solution to the state budget mess, but her plan was met with deep skepticism.

The plan would allow a new Puget Sound ferry authority, encompassing all or parts of nine ferry-using counties, to levy taxes to supplement income from fares and a fixed state subsidy.

In a news conference, Gregoire acknowledged the difficult politics of creating a new layer of government and a new tax, but said the state's iconic ferry system could not survive its current form after years of budget problems.

"If you don't like my idea, I accept that," said Gregoire, who will send the proposal to the Legislature. "But what I don't accept is we walk out of here with another Band-Aid."

Key legislators and officials from counties that would be included in the new district immediately attacked the plan as unfair and unworkable. Five Democratic senators, including Transportation Committee Chairwoman Mary Margaret Haugen, signed a letter attacking the plan for adding to government.

"Every time there's a problem out there, we go create another district," Haugen, D-Camano Island, said in an interview.

House Transportation Chairwoman Judy Clibborn, D-Mercer Island, said she would hold a hearing on the idea next week but was skeptical this was the solution. Both Clibborn and Haugen suggested the Legislature would roll out a transportation-funding package during the session.

Worth discussing

"I'm not optimistic, but I think it's worth a discussion," said Clibborn. "We need new taxes over the next three years or the ferry system will be cut to the very nubbin."

Washington's ferry system carries 23 million passengers and 10 million vehicles per year on 22 vessels.

Gregoire's proposal calls for it to be run by a regional district akin to Sound Transit, the three-county entity building the Link light-rail system. The ferry district would be created by 2013 and run by representatives of the ferry-using nine counties, as well as at-large members appointed by the governor.

The entity would assume all responsibilities, including setting routes and time schedules, negotiating union contracts and purchasing new ferries, although the state could help by issuing bonds on its behalf.

Gregoire said the power to impose a new tax would be "a third leg to the stool" of revenue, adding to passenger fares and a state subsidy capped at its current level of about $90 million, with adjustments for inflation. What type of tax — sales, property or some other type — would be up to the new district board, she said.

Fare increase

Until then, Gregoire's budget calls for a 10 percent fare increase and about $40 million to be transferred from other transportation funds. To save money, the proposed budget would cut the number of daily sailings from 504 to 475.

Local officials within the proposed district were uniformly critical.

Steve Bauer, a Kitsap County commissioner, praised Gregoire for "thinking outside the box," but disputed the idea that a new district could solve the system's backlog of unbuilt ferries and operating revenue problems.

It would be unfair, he said, to require a handful of counties to pay for ferries that prop up tourism throughout the state.

"It's a tough sell to go to folks to see if they're willing to pay more taxes so everyone else can have a subsidized ride on the ferry system," said Bauer.

The state ferry system is considered an extension of the highway system, and the plan appeared to Snohomish County Executive Aaron Reardon to be an abrogation of that state duty.

"This is a basic function of state government and it's being handed down the local governments," said Reardon.

King County Councilman Pete von Reichbauer said the county can't afford to take on the ferry burden.

"It's a Trojan horse that should be left outside King County," he said. "We're struggling to meet basic services. We're laying off cops. Why would we want to take on a transportation system?"

Gregoire's proposal sprang from a review she commissioned by the Passenger Vessel Association, a trade group of ferry operators. The review, released in December, recommended streamlining management of the ferry system.

Gregoire said she had considered full privatization. Until 1951, when the state bought out the last remaining private ferry operator, a steam-powered "mosquito fleet" plied the Puget Sound.

Gregoire said the steeply higher fares that would inevitably result from a private model made the idea unworkable, citing British Columbia Ferry Services as an example.

Simply cutting further into the ferry system also is an option. Since 2006, $30 million and 150 jobs have been cut. But Gregoire said further cuts would "compromise quality service."

"We can no longer bail. There's nothing to bail from," Gregoire said. "There's no other alternatives. We cannot continue to run the largest ferry system in America without adequate funding to make it happen."

King County already collects a property tax to pay for the West Seattle water taxi and Vashon Island ferry. That taxing district, set up without a public vote, collects about $1.20 for a $400,000 home.

If passed by the Legislature, the proposed Puget Sound ferry district could impose a tax without running afoul of Initiative 1053, approved by voters in November, according to Scott Whiteaker, a spokesman for the governor.

That initiative requires a two-thirds approval in the Legislature or a vote of the people to implement new taxes, but it does not apply to local governments.

Anti-tax advocate Tim Eyman, sponsor of Initiative 1053, said Gregoire's "unsustainable budgets" were to blame for the ferry-funding problems.

"Voters were very clear in November: During these tough times, families and businesses are tightening their belts and making due with less, and voters firmly believe it's long past time for government to do the same," he said in a statement.

At the news conference, Gregoire also proposed consolidating state information-technology services into a new state agency, which would have flexibility to contract some services to private companies.

Doing so, she said, would save $32 million over the next four years and cut 150 state jobs.

Times transportation reporter Mike Lindblom contributed to this report.

Jonathan Martin: 206-464-2605 or seattletimes.com">jmartin@seattletimes.com; Susan Gilmore: 206-464-2054 or sgilmore@seattletimes.com

Information in this article, originally published Jan. 6, 2011, was corrected Jan. 7, 2011. A previous version of this story incorrectly stated what King County's property tax pays for. It has been corrected to reflect that King County already collects a property tax to pay for the West Seattle water taxi and Vashon Island ferry.