Massive Fare Increase Spells End Of Farming On Guemes

Massive ferry fare increase spells the end of farming on Guemes Island

As I drove to the Guemes Island Ferry from my home on the Island’s North Beach, I passed Allen Bush Jr.’s field where a nice herd of Black Angus with calves busily grazed on spring grass. Growing up on the island, I worked my high school summers haying for Charles Bush and Allen Bush Sr. This herd of Black Angus does not belong to third generation Allen Jr. Rather he rents out his fields no longer keeping a herd of his own as his grandfather Chuck and father Allen Sr., did. Allen Jr. says that the proposed massive 64% increase in Guemes Island Ferry fares will likely put him out of business permanently because the cost of moving these cattle to the island will make his operation uncompetitive. 

Another cattle farmer on Guemes, Glen Veal, whose father moved to the island in the 1940s, has come to the same conclusion. Veal just sold the last of his cattle herd but will still bale hay which he had hoped to sell on the mainland. Glen says the fare increase, the first, a 14% jump July 1, 2023 with four more to follow, will likely take him out business.

For the past five decades, since Skagit County asked islanders to form a Ferry Committee to represent the ridership, setting the Guemes Island ferry fares has adhered to the bridge analogy. The capital costs of the island’s bridge, the Guemes Island Ferry, have been paid, like roads and bridges, from capital funding sources that a county can raise from a variety of Federal and State of Washington sources. The current Guemes Island Ferry, the Guemes, was paid by Federal funds. The operations and maintenance (O&M) costs of the Guemes Ferry have been shared by the Skagit County Road Fund, the State, and ferry fares paid by the ferry users. Under the current resolutions, adopted in 2010 and 2011, the fare target methodology has been based on a five-year rolling average of actual costs offset by two streams of revenue, the State Deficit Reimbursement and the State Motor Vehicle Fuel Tax, that the County receives because it operates a ferry. Of this target, the fare box is to pay 65%, a level set by the County Commissioners. (Keep in mind that for 2023 the assessed value of Guemes is $605,785,292 of which $787,521 is Road Fund tax. None of this tax money is allowed to be used to offset the Road Fund payments to the ferry in any fare calculation, rather it goes directly into the Road Fund to be used for all roads and bridges in the County.) 

Only Guemes Island ferry users pay additional transportation costs above their property taxes. The Skagit County Public Works Department currently projects Guemes Island Ferry O&M costs will be over $700,000 above the current planned budget. They propose funding this gap solely from the Guemes Ferry ridership necessitating a total fare increase of about 64%.* They claim their proposal is necessary for the Road Fund to maintain the roads and bridges in the remainder of Skagit County which have also experienced inflationary pressure.

The current Ferry Fare Target Methodology originally codified in Resolutions R2010050/R20110382 is dead.  It will be replaced by a new methodology which projects an increasing O&M budget over the next five years.  The fare box revenue has to meet 65% of this projected amount, an increase of $737,000 over the current average fare box revenue of $1,154,077. This means a 63.86% increase in the fares. 

Realizing that this increase if levied in one year might have a debilitating economic impact on islanders, the Commissioners instructed their consultant, KPFF, to phase in this fare increase. This phased approach will see fare increases at the rate of about 14% each year for the next five years. KPFF constructed a model based on the projected 2023 annual O&M budget of $3,412,191 the highest in the history of the Guemes Ferry, and increases it by 2028 to $4,020,522, an inflation of 20.32% in the 5 year period.  (The actual five year rolling average budget has been $2,598,678 so the new projected budget which forms the basis for the fare increases is $813,513 above the five-year actual cost of operation.)

The first 15% fare increase is slated for July 1, 2023.  This model will be reviewed annually for adjustments by staff. The first review will be in January, 2025. The KPFF representative stated that there is no State Motor Vehicle Fuel Tax nor State Deficit Reimbursement for county ferries credited to fare box revenue in this model. (Both these revenue streams are included in the current methodology.)  The details of how this model will work are not immediately apparent. The process excluded any Ferry Committee input, which was not the case in all fare discussions in past decades.  

The five-year projected O&M budgets are for the current diesel ferry, the Guemes.  No reductions in cost are projected for a new electric ferry- or any other O&M savings. In the week of April 24, 2023, Skagit County received $14 million from the State for the completion of its planned new electric ferry. In promoting the all-electric ferry, then County Commissioner Ken Dahlstedt stated that the new vessel would immediately reduce O&M costs by about 25%. The projected pro forma budget methodology is an artifice to ensure collection of the $737,000 2023 fare increase over five years and has nothing to do with the actual costs of operation. The promised O&M reductions of a new electric ferry, now scheduled to be online in 2025, will not be credited to island fares but will accrue to the Road Fund. Any other overpayment in fares exceeding the 65% target will automatically revert to the Road Fund. 

In addition to the “concession” of spreading the massive fare increase over five years, the new fare methodology will not charge for youth 18 years and under. Currently, school age children are not charged for their daily return from classes. This is to help families with children continue to support their education and sports activities in Anacortes.  (Guemes Island property tax contains a healthy assessment for Anacortes schools.)  A number of working families, like the farmers, have said they do not know how they can continue on the island. Further, the necessity of this youth fare policy is questionable should the County terminate runs after 6:00 pm which has been proposed as another cost reduction step in the ferry’s operation.  

Given the proposed structure of the new ferry fare methodology, the severe rate hike will shift County transportation cost increases to a minority group of citizens while continuing to distribute all of the fare revenue plus 100% of the Road Fund taxes from the lucrative tax base of the island to the rest of the County. This is a more favorable political solution for the County Commissioners than the more equitable solution of an increase in the Road Fund tax county-wide.

- Steve Orsini


*Skagit Valley Herald, May 11: “Currently, local funding for road projects comes from a property tax on unincorporated Skagit County. This money is generally used as a local match for larger state or federal grants, though a large portion of it is used to subsidize operations and maintenance for the Guemes Island Ferry, according to Grace Kane, county public works director.” [Misleading, if not outright false statement.]





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