The Alaska Marine Highway System’s Tazlina sits at the Auke Bay Terminal on Monday, Dec. 9, 2019. (Michael Penn | Juneau Empire)

The Alaska Marine Highway System’s Tazlina sits at the Auke Bay Terminal on Monday, Dec. 9, 2019. (Michael Penn | Juneau Empire)

New report recommends corporations, port authorities run Alaska’s ferry system

The governor and lawmakers have been waiting for this report.

An Anchorage-based economic analysis firm on Wednesday released a report saying that multiple public corporations and port authorities should take control of operating the Alaska Marine Highway System.

Northern Economics said in its report that’s the only option that will generate an acceptable profit while still providing affordable service.

“That option required a 5 percent reduction of vessel-based wage rates and 25 percent general increase in fares and other major vessel operation changes that would require renegotiation of union labor agreements,” the report says.

[Five take-aways from the AMHS restructuring report]

The report puts forth 10 other options for the governor’s office and lawmakers to consider.

But one legislator isn’t sure it was worth the wait.

“I think it’s widely incomplete and three months late,” said Sen. Jesse Kiehl, D-Juneau. “I kinda hope the state doesn’t pay for it.”

The firm was contracted in April by the State of Alaska Department of Transportation and Public Facilities to study the restructuring of AMHS, in light of budget cuts. AMHS saw a $40 million budget cut under the Legislature’s 2020 budget, following Gov. Mike Dunleavy’s proposed $98 million in cuts for the system.

Legislators and state officials have been waiting to read the report before taking any substantial action on the ferry system. When Dunleavy vetoed a $5 million appropriation from the Alaska Legislature to provide winter service to some Southeast communities, his summary of the vetoes called the appropriation “premature” before the release of the study.

The report was originally supposed to be released in October 2019, but was twice delayed before its release Wednesday. DOT’s budget for the report was $250,000.

On Wednesday, Kiehl said the report had lots of discussion about reducing wages, but no discussion whether lower pay would cause staffing problems for ferry workers.

The report also left out some communities dependent on the ferries for goods and transportation.

“Klukwan. The word appears twice,” Kiehl said, referring to the small Southeast community roughly 20 miles north of Haines. “You can’t leave ferry-dependent communities out of a discussion about the ferries.”

Given the report was only released Wednesday morning, it’s too soon for anyone to have a nuanced view of the report’s conclusions, Kiehl said. However he hoped that the report’s conclusion that a wholly privatized system wasn’t viable would put that issue to rest.

Many of the report’s suggestions require increased fares and reduced costs, namely in employee wages. The report makes numerous references to re-negotiating union contracts and limiting sailings and work hours.

“When you’re talking about re-negotiating contracts and ending food service, it makes me wonder are they going to have enough people,” said Robb Arnold, vice chair for the Inland Boatman’s Union of the Pacific, the union which covers ferry workers.

The report will need to be reviewed in more detail, Arnold said, but he thinks there are areas to work with.

“There were some good things out of it, with the budget the way it is,” Arnold said. “Things are not like they were (a few years ago). I’m just worried about retention.”

Arnold said he would like to see more engagement with the local communities who depend on the ferry service for supplies and transportation.

The report’s release coincided with the meeting of the Marine Transportation Authority Board in Anchorage Wednesday. Members of the board discussed the report’s findings during the meeting, but no action was immediately taken.

MTAB, the governor’s administration and the Legislature will all review and make their own recommendations about how to move forward, according to the meeting’s supplementary materials.

“There’s a lot of work ahead of us,” DOT Commissioner John MacKinnon said during the meeting. “There are things that will need to be corrected,” MacKinnon said of the firm’s proposals.

A presentation summarizing the report’s findings shown at the meeting is available at the MTAB website.

• Contact reporter Peter Segall at 523-2228 or psegall@juneauempire.com.

More in News

A Princess Cruise Line ship is docked in Juneau on Aug. 25, 2021. (Michael Lockett / Juneau Empire File)
Ships in Port for the week of Aug. 14

Here’s what to expect this week.

Supporters of U.S. Sen. Lisa Murkowski wait for an opportunity to talk to her at her newly Juneau campaign headquarters Thursday evening at Kootznoowoo Plaza. (Mark Sabbatini / Juneau Empire)
Murkowski opens up at Juneau HQ debut

Senator chats with supporters about U.S. vs. Belgium voting, moose chili and Project Veritas

(Juneau Empire File / Michael Penn)
Police calls for Saturday, Aug. 13, 2022

This report contains public information from law enforcement and public safety agencies.

U.S. Senate candidate Shoshana Gungurstein stars in a campaign sign within view of the Alaska governor’s mansion. Gungurstein, an independent, got exposure this week for being a Hollywood actress under a different last name after questions about her past went unanswered throughout the campaign. She is one of 19 candidates seeking to be among the four selected in next Tuesday’s primary to compete in the November general election. (Mark Sabbatini / Juneau Empire)
Senate candidate sheds more light on background

Shoshana Gungurstein responds at length to recent report on past film career.

(Michael Penn / Juneau Empire File)
Drug arrest made in Skagway

Police say a suspicious package was intercepted.

This late-April photo shows a damaged sticker on a door at Thunder Mountain High School reminding people to social distance and wear masks inside the building. Masks will not be required in school buildings this year. (Ben Hohenstatt / Juneau Empire File)
No mandatory masks or COVID-19 tests for new school year

No mandatory masks or COVID-19 tests for new school year

(Juneau Empire File / Michael Penn)
Police calls for Friday Aug. 12, 2022

This report contains public information from law enforcement and public safety agencies.

From left, Kelsey Dean, watershed scientist with the Southeast Alaska Watershed Coalition, and Kaagwaan Eesh Manuel Rose-Bell of Keex’ Kwáan watch as crew members set up tools to drag a log into place. Healthy salmon habitat requires woody debris, typically provided by falling branches and trees, which helps create deep salmon pools and varied stream structure. (Courtesy Photos / Mary Catharine Martin)
 
The SalmonState: Bringing the sockeye home

Klawock Indigenous Stewards and partners are working to a once prolific sockeye salmon run.

(Juneau Empire File / Michael Penn)
Police calls for Thursday, Aug. 11, 2022

This report contains public information from law enforcement and public safety agencies.

Most Read