State transportation officials say that Maine State Ferry Service ticket prices must increase to keep the service financially viable. But representatives from island communities warn that raising the rates too drastically will drive ridership — and therefore ticket sales — down.
The Maine Department of Transportation is expected to release a proposal later this month outlining a new rate structure that officials say is merely a starting point for further discussion. The flat rate included in the proposal will likely be about 17 percent higher than the current flat rate, Maine Transportation Commissioner Bruce Van Note said.
“We know that to cover the needed revenue, fares are going to have to go up,” Van Note said. “We also know that every dollar of [a] fare [increase] has a big impact on islanders. We want to look at, ‘Are there other ways to make those island Mainers not feel as much of the pain?’”
Releasing the proposal will be the first step in a renewed four-month rulemaking process the department is undertaking to set a new rate structure for the state-run ferry service.
The ferry service, which is part of the Department of Transportation, takes passengers and vehicles to and from the mainland to the islands of Frenchboro, Swan’s Island, Matinicus, North Haven, Vinalhaven and Islesboro.
The DOT initially began the rulemaking process last fall after the department was sued by Islesboro residents for allegedly failing to follow the appropriate process when the current rate structure was put in place last May.
On Thursday, Van Note met with the Maine State Ferry Service Board of Advisors in Rockland. The board, made up of island residents, understood that rates needed to increase to mitigate a projected budget shortfall, but told department officials that if the prices go too high, it will create a financial disincentive that will undermine efforts to increase revenue.
Since Islesboro residents saw ticket prices more than double last May under the current flat rate structure, they have adjusted how frequently they travel to the mainland.
“If you live on [Islesboro] right now, you will not take the ferry unless you absolutely have to. That, from a revenue-generating standpoint is exactly what I think we don’t want to do,” said John King, an alternate advisory board member for Islesboro. “I’m all for generating revenue, but I’m also all for trying to have vibrant island communities.”
According to DOT data presented at Thursday’s meeting, walk-on passengers decreased about 9.7 percent through the end of February compared to 2018 ridership figures. For vehicles, ridership was down about 10.4 percent for the same period.
Mark Higgins, manager of the Maine State Ferry Service, said the decrease in ridership is due in part to Islesboro residents scaling back on ferry use. But he also said the rise of e-commerce plays a role in decreasing ridership, with island residents being able to order more of the goods they need online.
Islesboro representative Gabe Pendleton urged the DOT to take into consideration the impact rate increases will have on ridership when forming the ferry service budget. Pendleton said the DOT cannot depend on ridership staying the same when ticket prices go up. He suggested that instead of just looking at increasing revenue, the department should look at how the ferry service can cut costs.
“As we hear from people [on the advisory board], it’s affecting all of the communities when the rates go up. You’re going to have people who are not going to be able to afford to ride the ferry,” Pendleton said. “I’ve talked to many people who don’t use the ferry despite having medical appointments because they can’t afford it. […] These are real and heartbreaking consequences that are the result of the ferry rate changes.”
Van Note said the department’s goal is to enact a rate structure that would not change for at least four years. To mitigate a budget shortfall during that period, revenue for the ferry service must increase about 17 percent, he said.
However, Van Note said he would “certainly” like to avoid a final rate structure that would cause an island’s ticket prices to go up more than 100 percent, as the current rate structure has done for Islesboro residents.
With the forthcoming rate proposal being “fully subject to change,” Van Note said that the department is considering a number of different options, including seasonal rates, differing island specific flat rates and commercial vehicle rates.
Representatives from Islesboro said they would support seasonal rates. But Kathy Clark, a representative from Swan’s Island, said seasonal rates can negatively affect islanders and are not fair to the seasonal population, which is mostly “working people” on the island.
Thursday’s discussion was the first of many that Van Note said the DOT will have with representatives of island communities served by the ferry service. A public hearing is scheduled for the end of April in Belfast, and the advisory board will meet again in early May to discuss the rate structure.
After the DOT releases its rate structure proposal at the end of March, a final decision is due within 120 days, per the rulemaking process.