With its borrowing limit increased by $50 million in the new state budget, the Steamship Authority now has the financial headroom to add a fourth ship to its growing fleet of identical former oilfield supply vessels, which the ferry line is converting into freight ferries.

Gov. Maura Healey signed the $56 billion fiscal year 2024 budget Wednesday. It included a provision raising the authority's bond limit to $150 million. 

The Steamship Authority had planned to buy and refit all four vessels within its previous borrowing limit of $100 million, Cape and Islands state Sen. Julian Cyr told the Gazette, but sharply rising costs — largely due to inflation — made that impossible.

“This increase is going to allow them to purchase that fourth sister ship and have an interoperable freight fleet, which will really ensure consistency,” Mr. Cyr said Wednesday.

“If we didn’t do this now, they would have lost an opportunity with the fourth vessel,” he said.

The borrowing boost also will allow the Steamship Authority to explore electric propulsion for its fleet, said Mr. Cyr, who worked with state Rep. Dylan Fernandes to win house and senate approval for the increase earlier this year.

“[Mr. Fernandes] and I have been pretty aggressive on the Steamship Authority …  devising a plan toward electrification,” Mr. Cyr said.

In a report to boat line officials earlier this summer, chief operating office Mark Higgins recommended exploring a hybrid diesel-electric propulsion system, with stored power, for the fourth offshore supply vessel if the purchase goes ahead.

Mr. Cyr said the new borrowing limit also will ensure that port upgrades can continue, not only in Woods Hole but at other terminals including Oak Bluffs.

“That port gets pretty hammered,” he said.

Speaking with the Gazette by phone, Mr. Cyr emphasized that the Steamship Authority’s new bond limit does not impose any additional costs on taxpayers.

“This does not draw on the commonwealth’s borrowing limit,” he said. “They have to pay this money back from the fare box.”

Mr. Cyr expressed confidence that the boat line will be able to repay its bonds.

“Financially, they’ve always been in a pretty strong position [with] the fare box,” he said.

The Steamship Authority’s borrowing limit was last raised by the state legislature in 2014, from $75 million to $100 million.

“As a self-funded public agency, increasing the bond limit is a crucial step in being able to undertake several pending and planned capital projects,” general manager Robert Davis said in a statement Wednesday.

The new state budget, which is effective immediately, also contains $65,000 for a study of per- and poly-fluorinated substances (PFAS) in all six Island towns, Mr. Cyr said.

“It’s going to begin sometime this fiscal year [and] it can take several months,” he said.

Free school lunches and breakfasts, initially a pandemic measure, became a permanent institution in Massachusetts when Gov. Healy signed the 2024 budget.

“We’ve known for so long that ensuring students have access to two meals at school makes a huge difference, especially at a time when we’re seeing escalating food insecurity,” Mr. Cyr said.