Maybe this ‘subsidy’ thing makes sense

While it’s unfortunate that Gov. Gregoire referred to the state’s support of Washington State Ferries as a “subsidy,” her proposal to form a regional ferry district with authority to raise revenue for ferries might turn out well for South Kitsap residents.

Using state revenue to pay for part of the state highway system hardly constitutes a subsidy, since the revenue is collected and spent by the same governmental entity — the state — to carry out the entity’s responsibilities.

Calling the state’s share of the total cost a subsidy gets the discussion started on the wrong foot, since it implies that something other than a state function is being funded.

The central issue in paying the state ferry operating and capital costs is determining how to divide the total cost burden among the state’s taxpayers, the ferry riders, and perhaps the taxpayers in areas with ferries.

Pointing to the inadequacy of revenues already earmarked for the ferries and then calling the rest of the needed revenue a subsidy doesn’t help resolve the central issue, but it does tend to make people think someone’s getting some undeserved special benefit.

From the perspective of the millions of state taxpayers who have little or no use for the state ferries, there would likely be opposition to using state funds to pay a disproportionate share of the cost.

For those who frequently ride the ferries or perceive a local economic benefit in having them, there seems to be a tendency to be blind to the possibility that a disproportionate share could be paid by people who neither use the ferries nor receive any local benefit.

Arriving at an agreement about the share to be paid by each group requires an examination of the facts that could perhaps only occur through the legislative process — and that’s what the governor’s proposal could initiate.

South Kitsap is served by two state ferry runs that collect less in fares compared to some other runs, so deciding how much the state’s taxpayers should pay for our ferries is not the same as for others.

The ferry runs using the terminals on Bainbridge Island and Kingston have a lot more traffic and thus a lot more revenue from fares than the runs serving Southworth and Bremerton.

Even within our own county we don’t have a similar division of the total costs for each of our ferry runs.

The same is true for ferries serving other parts of the region, so deciding how to divide the total cost will probably require accepting significant differences among the several ferry runs — just as is now the case.

These differences will make it hard to agree within the region that is mainly benefited by the state ferries.

But what may be even harder to resolve is the question whether to increase the state revenues that are earmarked for the ferries.

The governor merely proposed that a “dedicated and ongoing state subsidy level would be provided” without saying how much it would be or how it would be collected.

Revenue from the state’s motor vehicle fuel tax is earmarked for ferry operating and capital costs, but it’s not enough.

Even when the fares paid by riders cover about 70 percent of operating costs (but none of the capital costs), the total of fares and earmarked tax revenue is too small

So, should the state’s taxes for ferries be raised, or should the difference be made up solely through new taxes collected within the region served by the ferries?

If this question is of special importance to residents of all counties in the Puget Sound region rather than only Kitsap County, then we may be better able to obtain a higher state tax dedicated to ferries.

The governor’s proposal makes the question especially important for all these counties, because any shortfall would have to come from the regional ferry district’s taxpayers.

Our ferry service will limp along until the revenue is increased, and this proposal for a regional ferry district may be just the thing to accomplish that revenue increase even if such a district isn’t formed.

Bob Meadows is a Port Orchard resident.

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