Thursday, March 12, 2009

When User Charges are Just Too Much

Since 1999, Washington State has witnessed a significant decline in ferry ridership. Much of the decline is due to annual increases in rider fares--up to 6 percent per year. The intention behind these increasing fares has been to offset rising operational and capital costs. Many ferries are more than 40 years old and require substantial maintenance

Washington State has long been aware of the need to attract more riders. In 2008, the Legislature froze passenger fares at 2007 levels. Now, a citizen-based proposal suggests raising excise taxes to prevent an additional increase in fares. The current proposal includes a raise in motor-vehicle excise tax, annual license fees, and/or the gas tax. 

Though most Washington residents view the excise tax as less-than-favorable, riders argue that it will raise revenue without increasing fares. More importantly, it will allow the ferry system to serve Puget Sound’s rapidly growing population. At present, no decisions have been made regarding the proposal.

Yet another option which would refrain from raising rider fares is Senate Bill 6005, which sets aside a portion of King County’s hotel-motel tax for “tourism promotion". Unfortunately, in its current economic state, King County is unwilling to relinquish such funds. The search for additional revenue (and better ridership) continues…

1 comment:

  1. The proposal of raising excise taxes to support the ferry system is interesting. I am wondering how they justify the subsidy.