Susan Bell, of the McDowell Group, and Robert Venables, executive director of Southeast Conference, present information about the Alaska Marine Highway Systems during an information meeting for House members at the Capitol on Tuesday, Feb. 5, 2019. (Michael Penn | Juneau Empire)

Susan Bell, of the McDowell Group, and Robert Venables, executive director of Southeast Conference, present information about the Alaska Marine Highway Systems during an information meeting for House members at the Capitol on Tuesday, Feb. 5, 2019. (Michael Penn | Juneau Empire)

Ferry system braces for budget cuts

Lawmakers look for solutions ahead of anticipated budget cuts

Advocates for the Alaska Marine Highway System are prepping for budget cuts.

House representatives held an informational meeting about the economic impacts of the AMHS in anticipation of the governor’s 2020 budget proposal, which is expected to contain significant cuts to spending across the board. The governor’s office is expected to release the budget by Feb. 13.

“Given the scope of the anticipated cuts that are being discussed, we decided to hold this meeting,” said Rep. Louise Stutes, R-Kodiak.

One option that could move the AMHS forward would be to turn it into a public corporation.

J. Robert Venables, the Executive Director for the Southeast Conference and member of the AMHS Reform subcommittee, said at the meeting on Tuesday that turning the AMHS into a public corporation would be the best way to provide stability and allow the system to strategically balance the issues it is facing, including declining traffic due to more people opting to travel by air.

“We need to be a step away from the political treadmill that keeps going on and have an executive board that can bring expertise,” Venables said. “(It could) actually look at some strategic partnering that will allow job creation. Should the State of Alaska actively be serving alcohol to patrons on the vessels? Is there an opportunity for private sector to come in and do that? There’s ways that we can partner with the private sector.”

It’s been two years since the AMHS closed the bars on the vessels.

When lawmakers looked into bringing the bars back in the past, Rep. Steve Thompson, R-Fairbanks, said they found it wasn’t possible to hire a vendor to run the bar only during peak season in the summer.

“Bartenders and gift shop operators were making $105,000 a piece,” Thompson said at the meeting. “I hope you can bring some sense back into this.”

Venables said at the meeting that there’s a misalignment between labor and management in the system, and an executive board through a public corporation would empower labor to be part of the solution for stability. A public corporation would provide additional value to be able getting into more of an airline economic model, he said.

“We need to create distance between government and the marine highway system,” Venables said. “For 20 years we’ve seen major changes be put into place with each administration. That creates a problem.”

Over the last couple of years, the budget for AMHS has dropped from about $100 million to the $80-million range.

“As with many programs, you get to a certain point and you have to cut programs,” Venables said. “With the marine highway system, you get to a certain point where you have to tie up boats. It all depends on what that number is and what the vision and philosophy is. We are all waiting for the shoe to drop.”

He said he doesn’t think the system’s budget could get much lower than the level it’s currently at without dropping a boat from service. The AMHS provides vital transportation and shipping services to remote communities across Alaska. Juneau is the top-served port in Southeast and Southwest Alaska, according to data by the McDowell Group in a presentation at the House meeting from a 2016 report.

“As soon as you cut another boat, that’s service that goes down, which means that the reliability goes down, which means the passengers and public start voicing their opinions,” said Shannon Adamson, a representative for the International Organization of Masters, Mates and Pilots and member of the AMHS Reform subcommittee.

• Contact reporter Mollie Barnes at or 523-2228.

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