Posted on July 6, 2020
“The COVID-19 pandemic puts it in a projected $22 million shortfall that municipal governments cannot be expected to cover while addressing the urgent needs of year-round and seasonal residents,” Sen. Julian Cyr said in a statement.
BOSTON — A move on Beacon Hill Thursday could ease the financial burden on the five port communities served by the Steamship Authority should the ferry line operate at a deficit by the end of the year.
The Steamship Authority’s enabling act allows the company to assess Nantucket, Martha’s Vineyard, New Bedford, Barnstable and Falmouth money if the ferry line has a shortfall at the end of the year.
State Sens. Julian Cyr, D-Truro, and Susan Moran, D-Falmouth, got an amendment passed Thursday to the supplemental state budget that would take the port communities off the hook for the assessments and have the state cover the deficit instead, according to Cyr’s office.
That shortfall is certainly possible.
The Steamship Authority does not receive state aid and funds itself through ticket sales, so when ridership dropped off, so did its revenue stream.
“The COVID-19 pandemic puts it in a projected $22 million shortfall that municipal governments cannot be expected to cover while addressing the urgent needs of year-round and seasonal residents,” Cyr said in a statement.
Ridership plummeted at the onset of the COVID-19 pandemic — down about 80% — and though it is slowly climbing back, it’s still far below normal.
During the first three weeks of June, passenger traffic was about 45% lower than last year and the Steamship Authority has only just crossed the 550,000 passenger mark, when it would normally be surpassing 1 million riders by this time of year.
At one point, the Steamship Authority wrote to the state pleading for help to keep the ferries running past May. The Authority did receive $10 million in federal relief funds from the CARES Act to keep it going, but the “lifeline to the islands” has been losing millions of dollars that it normally banks on to get it through the offseason.
With the CARES Act money and a credit line of about $10 million, the Steamship Authority projects that it will be able to stay afloat through the summer.
Thursday’s amendment will help the Steamship Authority cover its costs at the end of the year, but efforts are still being made to make sure money doesn’t run out and ferries can keep running until then.
General Manager Robert Davis thanked the legislators for their help.
“Ensuring that the burden of this epidemic does not fall on the shoulders of our port communities is of vital importance,” he said, “and thankfully our local legislators have understood our unique predicament from the outset of this crisis.”
The Senate’s version of the supplemental budget bill must still be reconciled with the House version, which did not have a Steamship Authority amendment, and then be signed by the governor.
This could lift a large financial burden off the port towns, which are already looking at their own municipal budget crunches caused by the pandemic.
“With the current projected deficits for the Steamship Authority, the town of Falmouth would have owed over $3 million,” said Moran.
The two islands would have to shoulder most of any potential shortfall. The mainland communities would each have to pay for 10%, while Nantucket and Martha’s Vineyard would split the remaining 70%.
When the pandemic first hit, Nantucket estimated that it would need to pay somewhere around $14 million in assessments. The town already cut its budget down and having to pay this massive figure would have been crippling, said Town Manager Libby Gibson.
“I have no idea where $14 million would come from,” she said.
Likewise on the Vineyard the Senate amendment was seen as a great help.
“The town of Tisbury is focused on the pressing financial challenges of our FY 21 budget and paying a portion of any Steamship Authority deficit is not something we can afford,” said Town Administrator James Grande.
Source: capecodtimes
