By Larry Persily

In addition to vetoing two-thirds of the Legislature’s increase in state ferry operating funds for the next fiscal year, Gov. Mike Dunleavy eliminated all of the funding to add crew quarters to the system’s two newest vessels, the Tazlina and Hubbard.

The governor vetoed $16.2 million of the Legislature’s $19 million appropriation for vessel repairs and improvements, leaving $2.8 million to put toward repairs of the 43-year-old Aurora, which has been out of service since last year while it awaits funding for steel work and other repairs. 

(Editor’s note: The Skagway News mistakenly reported April 10 that the governor did not veto any of the $19 million capital appropriation for the Alaska Marine Highway System.)

The governor on April 7 signed the state budget for the fiscal year that starts July 1, vetoing about a quarter-billion dollars from the Legislature’s version of the spending plan. The legislative deadline to reconvene and attempt a veto-override vote expired April 12. Dunleavy said he needed to reduce state spending amid falling revenues from the crash in oil prices.

“My administration worked to make a number of difficult, but necessary, decisions,” the governor said in his veto announcement. “Now, as we face a drop in oil prices and face a global health pandemic, is not the time to irresponsibly increase our state’s budget.” 

“Capital budget funding was prioritized to complete hull repairs to the Aurora as quickly as possible,” the governor said in a prepared statement April 14. There is no scheduled date for when the Aurora will go back into service. Other funding brings the total amount available for the work to $7 million, the governor’s statement said.

“Funding for crew quarters … was removed because it is premature to make substantial changes to the fleet until a reshaping study” is released this fall, Dunleavy said in the statement. “The study can be used to guide the restructuring of the marine highway system so it is more affordable, sustainable and reliable.”

The study is the second state-funded effort under the Dunleavy administration to look at money-saving alternatives for ferry system operations.

 Currently, the Tazlina is the only ferry operating in Northern Southeast Alaska. The Alaska Marine Highway website shows the Columbia and LeConte coming back into service the third week of May after provisioning and staffing delays due to travel and work restrictions imposed under the COVID-19 pandemic.

The lack of crew quarters means the Tazlina, which was added to the fleet last year, cannot make a same-day Juneau-Haines-Skagway round trip. The full run exceeds the U.S. Coast Guard 12-hour limit on crew time. Without a crew change, the ferry needs to drop either Haines or Skagway on each trip to stay under 12 hours.

With that constraint, the ferry system is unable to provide the same frequency of direct service between Haines and Skagway as in past years. Adding crew quarters was intended to allow same-day runs. 

The governor’s veto of $15.5 million from the Legislature’s $23.5 million increase for ferry system operating expenses will not affect this summer’s schedule, according to Northern Southeast legislators. But instead of a 30% bump in service next winter with the full $23.5 million boost, the reduced budget will be sufficient to provide about a 13% increase in 2020-2021 winter service, the governor’s office said April 14.

With the governor’s veto, the ferry operating budget for the next fiscal year is about $108 million. Less than half would come from passenger and vehicle fares; the rest from state dollars.