Study Calls for Ferry Route Cuts, Fare Hikes

The reception to recommendations for fare increases and cuts in off-season ferry trips ranged from tepid to ice cold at a legislative hearing here last week.

Members of the joint House and Senate Program Evaluation Oversight Committee said the proposal from the legislature’s Program Evaluation Division, which would double the fares for some state-operated ferry routes and cut dozens of crossings, needs more study and could potentially treat coastal residents differently than other North Carolinians when it comes to the state’s transportation system.

Rep. Nelson Dollar, R-Wake, who chairs the House Appropriations Committee, said there’s not enough data, including passenger counts for individual trips, to make decisions on specific route cuts. He also argued against the plan on philosophical grounds, stressing that the ferry service is part of the transportation system and not a business.

“I hope we don’t do anything as a General Assembly that will treat our folks down east, in those rural counties who have enough to struggle with, that we don’t do anything that treats them like second-class citizens,” Dollar said. “Because they’ve got to get from Point A to Point B, too, and this ferry system is their bridge system.”

Chuck Hefren, a principal program evaluator with the Program Evaluation Division who worked on the study, said there is no way the state could make the ferry system pay for itself using fares, which at present only provide 4 percent of the funds for the system. But Hefren said the state can make improvements. The cost per vehicle on off-season crossings on expensive routes can run as high as $250, he said.

“We think the reliance on state funds can be lessened and still provide great ferry service in North Carolina,” Hefren said.

The proposal reviewed by the oversight committee finds that the state could save $1.5 million by reducing the number of crossings and another $1.7 million through fare increases. The bulk of the estimated $1.5 million in savings, $953,419, would come from dropping 12 daily crossings for the Hatteras-Ocracoke route, the service’s highest-cost route. Other reductions in service to Ocracoke would include eliminating two daily crossings each from Swan Quarter and Cedar Island. The largest number of daily crossings eliminated would be 18 of the 54 crossings for the Cherry Branch-Minnesott route. Fort Fisher to Southport service would be reduced by nine crossings.

Hefren told the committee that the impact of fare increases on local residents and regular commuters would be minimal because most would take advantage of the $150 year-round pass.

North Carolina Department of Transportation officials offered a response to the report, saying the cost-saving estimates are unrealistically high and that many of the suggestions, such as targeted route reductions, are already being considered.

Dollar said the proposal was unnecessary given improvements and route adjustments already being made by NCDOT and would likely be met with heavy opposition on the coast. He recalled reaction to an effort in 2012 to start charging fares for free routes.

“Folks came out by the hundreds of thousands with their pitchforks,” he said. Pointing to the process used to settle on the upcoming fare increase for the Southport to Fort Fisher route, Dollar said the system is working.

“We need to leave these things to DOT under the structure that we’ve got and make sure that the local governments are involved and do it that way, as opposed to the General Assembly weighing in,” he said.

Rep. Becky Carney, D-Mecklenburg, agreed, saying that she’d like to see better reporting and updates on the system before taking on large-scale changes.

‘Struggling With the Math’

Some inland legislators were more receptive to the report’s recommendations.

Sen. Andy Wells, R-Catawba, said he didn’t understand why the state is providing a free commute for coastal residents. Wells said a 5-mile commute, the length of the average ferry run, costs $1,400 per year based on the current Internal Revenue Service mileage deduction rate of 54.5 cents per mile.

“I’m struggling with the math on this,” Wells said. “If your commute is over the highway your cost is $1,400 a year, but if it’s over the water, it’s zero.”

Rather than move forward with the proposed fare increases and crossing reductions, the committee is reviewing potential legislation for the 2018 short session that would require NCDOT to develop a 20- to 30-year forecast of transportation demands for the coastal region and look at possible alternatives for transporting vehicles and passengers via ferries. The plan would include a review of routes, pricing structures for fares and all ferry operations. The report would be due Dec. 1, 2019.

The committee is scheduled to review the proposed legislation at its April 9 meeting and decide whether to forward it to the General Assembly for consideration during the session, which opens May 16.

Rep. Pat McElraft, R-Carteret, said she agrees there needs to be more information before considering major changes.

“I think the long-term study is the right decision,” she said Tuesday in a text response to Coastal Review Online. “There are many moving pieces to this issue. We need to consider tourism that generates billions of dollars to the economy. A modest fee increase for cars on ferries where there is an alternative road might be appropriate but there needs to be stakeholders involved in the final plan for any changes.”

Partnerships Pushed

While there was plenty of pushback on parts of the ferry service evaluation, a proposal to encourage more public-private partnerships was generally applauded.

A plan under consideration would revive the idea of a network of passenger ferries to boost tourism in the state’s Inner Banks, a marketing term that describes the inland areas of the coastal plain, particularly in the Albemarle Sound region.

Nick Didow, a marketing professor at the Kenan-Flagler Business School at the University of North Carolina Chapel Hill, told the committee that a new study by a new Inner Banks collaboration, showed that a public-private partnership model could be used to launch a new ferry passenger as part of an economic revitalizations for Albemarle communities. The concept draws on an idea proposed in 1993 by former Roper mayor Bunny Sanders, Phil McMullan and Peter Thompson.

The network of ferries, Didow told the committee, would benefit locals by connecting communities as well as the tourism economy. It also would expand eco-tourism in the region.

The study, conducted for a coalition dubbed the Harbor Town Project, looked at adding passenger ferry service between Elizabeth City, Edenton, Hertford, Plymouth, Columbia and Kitty Hawk. One proposed route would be an express service between Kitty Hawk and Edenton.

In the study, the infrastructure, including docks and vessels for the system, would be provided with public funds, with an initial investment estimated at $22 million. The service would be operated by a commercial ferry service.

The study estimates that 107,000 passengers would use the service during the first year and 170,000 per year after that and increase as routes increase.