The Steamship Authority is facing a $5 million gap between its projected revenues and expenses next year due to an unprecedented $15 million rise in costs, paired with a decline in revenues.
The Steamship Authority is facing a $5 million gap between its projected revenues and expenses next year due to an unprecedented $15 million rise in costs, paired with a decline in revenues.
To cover the shortfall, the boat line is now considering its largest fare increase ever, raising rates across the board for passengers, vehicles and parking.
The dramatic rise in expenses comes after a rocky year at the boat line. Crew shortages have plagued the Steamship, its general manager announced he planned to resign next year and cancellations piled up throughout the summer.
Still, the extent of the cost increases caught some members of the Steamship Authority’s port council off guard when it was unveiled Tuesday.
To pay for the higher expenses, the boat line is pondering walk-on tickets going up by $1, excursion fares rising (Islander vehicle rates) between $3.50 and $5, and standard fares (off-Island vehicle rates) jumping between $6 and $25.
“I think the expense increase is extraordinary,” said Rob Munier, the Falmouth member of the advisory board. “I need to be sure I understand that. I don’t know that we’ve ever had a $15 million expense increase in a given year.”
Unprecedented rise in expenses caught Steamship representatives by surprise at port council meeting.
Unprecedented rise in expenses caught Steamship representatives by surprise at port council meeting.
Steamship staff said the 2025’s higher costs were tied to increased training, and higher costs for insurance, technology and employee salaries.
The largest estimated increase in costs is related to the Steamship’s payroll, said Mark Rozum, the Steamship’s treasurer. The boat line is currently negotiating with its licensed deck officer union for a new contract, and Mr. Rozum said the Steamship Authority expects to be paying $7.6 million more in salaries next year — 16 per cent higher than in 2024.
The Steamship Authority also expects an additional $3 million for its IT expenses, a 113 per cent increase from last year, as the boat line tries to finish its new reservation system and website. It also estimates there will be an extra $1.2 million in vessel maintenance and $1.1 million in insurance given that new freight vessels will be coming online.
Daily parking fees on the Vineyard route could go up between $2 and $7 depending on the time of year and day of the week, and annual permits to park at the Falmouth Palmer lot could go up by $100.
The fares will need to be voted on by the Steamship Authority’s board of governors, and several budget workshops are planned for the coming weeks.
But Mr. Munier wondered if there would ever be a point where the cost of coming to the Islands — Nantucket will also see raised rates under the current proposal — could make tourists pause.
“[We] don’t want to find ourselves where we’re raising rates so much that we actually don’t generate the revenue,” he said.
Aside from the projected rise in expenses for the ferry system, changes in travel patterns have caused revenues to decline. The number of standard automobiles that have been coming to the Island have been falling for the last several years, while the number of excursion cars has gone up. That has resulted in lower revenues because excursion vehicles, which are charged a lower rate, are subsidized by standard vehicles.
Joe Sollitto, the Oak Bluffs representative on the port council, believed the drop in standard automobile traffic was due shifts in the Island’s population and more second homeowner’s leaving vehicles on the Island.
That could have also resulted in more vehicles becoming eligible for excursion rates, and fewer standard vehicles making the crossing.
“I think since Covid, there’s been an increase of people living here,” he said.
According to census records, the population grew by about 6,000 people between 2000 and 2020, now counting about 20,000. There are about 15,000 excursion customers, about 62 per cent of who are on the Vineyard route.
With these shifts, excursion trips in 2024 made up nearly 39 per cent off all vehicle crossings, up from 35 per cent in 2019.
Island officials also believed that there could be more excursions now because of the dwindling services here. That has necessitated more Islanders to have to go to the mainland for doctor’s visits, veterinarian trips and other appointments, said James Malkin, the Vineyard representative on the Steamship board of governors.
“There are fewer practitioners of various kinds on the Island,” he said. “The way we live on the Island now, we go back and forth more than we used to.”
The last time the excursion rate for passenger vehicles, which is now between $73 and $136, was raised was in 2021.
In interviews with the Gazette last month, several Steamship board members said they saw the writing on the wall when it came to cost increases. For Mr. Malkin, he wanted to make sure that the rising rates were distributed in a fair way.
“The money needs to come from everyone who uses the Authority boats,” he said. “At least from my point of view, I will try to deal with this as equitably as possible.”
Comments
We should have heard this
Warning TisburyWe should have heard this coming for years now.
You can't have mandates, suggestions, pay increases, union negotiations without significant consequences and this is just the first show to drop. I'm not passing judgment if it's good or bad I'm just saying things come with a cost and sometimes you have to weigh if it's smart to do it all at once or wait till technology allows you to make such significant drastic changes to just feel good.
The first electric transit bus service (September 2023)
Electrify the boat fleet (Ongoing since 2020 despite the lack of infrastructure on both the island (OB and VH ) and off island locations to charge these. Years away but the cost is going to be astronomical in spite of thinking it should be less.
Union Contract negotiations. 10% each year for 3 years plus amazing healthcare, benefits, etc and the Captains not wanting to work weekends.
The stopping of events on the island drives people away coupled with banning or talk of banning short term rentals, workforce housing, bashing island wealthy and forcing a 12 week a year season back to 7 weeks, arresting illegal crime people in the National spotlight? . This all results in less people wanting to come here although It didn't seem so this summer.
Parts for broken old vessels cost more than running to NAPA and replacing a 4 dollar part. More money in the budget needed for that and inflation.
Wait to see if the cost of Oil goes over $100 a barrel again.
The disparity between excursion rates vs regular fare. When you have a larger percent of excursion rates taking up a larger percentage of the boat it reduces your revenue per boat.
The call to NOT increase fates the last few years has led to a larger increase coming. Fares should be tied to an index so we all know what's coming.
Small list of reasons we've all been warned about for years of why this is here now. It's only going to get worse.
Want to know why? Just ask. I'll tell you more.
Wow...you almost got it all..
Gabrielle West TisburyWow...you almost got it all...except for the TICKS
Can you provide some evidence
Frequent Passenger FalmouthCan you provide some evidence that there are concrete plans to electrify the fleet? As far as I know it's just something a lot of people would like to see in the future, and not something SSA has invested any money into. Pessimistically, I don't expect the organization as it exists today to electrify unless forced. It also seems that the limiting factor for boats running and people coming over in the summer is staffing, not demand-- there were some very painful peak weekend trip cancellations from 1-2 people calling in sick this summer. There are many well-run ferry systems around the country and world, and I would love to see experienced leadership from one of those systems brought in and empowered to make the changes we need.
We could also stop wasting
JD Naron VHWe could also stop wasting countless millions of dollars on buildings we don't need.....
Or just build a bridge and be
Blythe OBOr just build a bridge and be done with this nonsense.
Absolutely!!!
Island GirlAbsolutely!!!
So raise rates... ya that
Darren S Welch Vineyard HavenSo raise rates... ya that will make people want to ride the boat !! How about scaling back a 32 million dollar joke of a building ! How about settling union contracts instead of stalling How about the top 1% shows some accountability for the short fall !! Like why are they hand building the forms for the maintenance shed ??? There aren't any form contractors on the cape with 8ft forms they could double up !! There's thousands in just waisted plywood... Davis should be gone now ! He couldn't lead ants to a picnic bleeding Honey the whole way there...
While I agree D. Welch i
Warning TisburyWhile I agree D. Welch i should have included that in my warnings. Concerns of the future expansion of the electrification of the fleet and the high raise wage increases coming with little change to the structure of the organization is going to topple the “independent “ ( absent state control ie Massport etc) steamship that we know and love to hate.
Not sure if Davis was the problem with the building. I don’t think Davis is the problem. I think the board and port council are the problems. The port council is a relatively new change (15 years maybe) and let’s face it, its been used to deflect decisions that should be made by our appointed governors. Why we watered down and created more red tape for a boat line that serves the people is ludicrous.
Streamline the operation! I am now in favor of a capital budget that the state provides $20 million to assist us to get what we need, our lifeline back!
How many times can you not
Jake EdgartownHow many times can you not book a reservation and the boat is empty? A LOT. How about eliminating days where’s there’s no stand by. I mean if you send a boat when it’s not full it is not our fault.
Absolutely
Gabrielle West TisburyAbsolutely
I have a question. If the
standby is the solution mvI have a question. If the schedule for a particular date shows the boats are full leaving the island and no reservations are available, yet the the other direction from Woodshole shows lots of space available, it makes no sense unless everyone who leaves never comes back?
I suggest allowing standby 7 days a week in both directions in order to fill the boats to capacity. Once a boat sails that possibility of revenue disappears. Standby is the solution to revenue loss.
Good idea
Gabrielle West TisburyGood idea
Agree completely. This just
Anne ChilmarkAgree completely. This just happened to me last weekend…again
The Vinyard Haven
Frank Brunelle TisburyThe Vinyard Haven reservations building was tiny until the new massive structure was built. In Woods Hole now an even more massively expensive replacement for what works. It is so obvious. Travelers would appreciate some economies of scale, including islanders.
A run away train! Ain't it
Ken Rusczyk OBA run away train! Ain't it fun, spending someone else's money. Time to drain the swamp.
They should stop running half
Danny East ChopThey should stop running half full boats. Could save money waiting 30min to run a full load. This could happen x5 per day, if you ride often enough you KNOW those ‘fully reserved’ boats are often under capacity. They should also open a bar where the current ticket office is. It’s a good spot with a captive audience, could generate at least $1m selling cold beer alone. Another idea; sell a Season Pass. Not for the wealthy, but the extremely rich amongst us that would pay $15k per year if they could drive straight on to any boat at any time. This SSA leadership could get much more creative with the resources at their disposal, if they were motivated I reckon.
I told you so! This is
Jean OBI told you so! This is outrageous. Meanwhile many Islanders are worry about Affordable housing… I don’t get it.
You are pushing tourism away. You will soon have all the affordable housing you will need… but no good paying jobs…
I live hear full time and have never seen the drop in tourism in 27 years!
We want to ban Short term rentals, then we want to tax the—— out of it….
It’s crazy
Let’s all stop this non sense before we lose are Economy.
Less standard fares means it
Mike SomewhereLess standard fares means it’s already too expensive and less people are coming.
It appears to be faulty thinking that raising fares will generate more revenue.
It will be the opposite.
Even fewer standard fares because it’s already too expensive going forward.
Let’s raise the fares so nobody except the truly wealthy can afford to come.
Brilliant.
Cut off your nose despite your face/kill the goose that laid the golden egg comes to mind.
SSA is already the most expensive ferry service in the country.
The State needs to take over the shameful governance of this crucial service.
The budget needs a wicked cut.
The governor's office should
TisKid MVThe governor's office should realize that the SSA has completely and totally failed in its mission. It is not reliable in any sense and is only getting worse. We need to proceed accordingly. This would probably require a major study by logistics experts. I don't believe any amount of money given to the SSA in any form will be enough. MV is in the process of being stranded. The governor needs to assume the worst and go from there before this gets worse. No amount of money and no current SSA employees are coming to save you.
Maybe the budget shortfall is
Charlie Callahan So Boston/EdgartownMaybe the budget shortfall is due to incompetence and building an EIGHTY MILLION DOLLAR ticket booth.Do ya think that might be part of the problem?????
That useless sun shelter
Gabrielle West TisburyThat useless sun shelter shows what lies ahead...kill the new terminal
Sadly, I don't think there is
Ben I. EdgartownSadly, I don't think there is any way to right this ship without serious legal action taken by us / the patrons of SSA / who are given no choice of service, nor what seems even a weighted voice as the constituents who deserve a productive governance from the SSA board. This situation is beyond dysfunctional and I welcome any legal scholars who would even remotely explore a Class Action suit against the SSA. Everything else is just "chatter" and we (like always and even now) will be ignored otherwise.
I buy my tickets on line. Don
Jim S BourneI buy my tickets on line. Don’t think we need a bigger ticket office.
Islanders should be more
Larry OBIslanders should be more concerned about this than Affordable Housing! Jeez
We are pushing away the tourist more and more… as someone else commented we will have plenty of Affordable Housing at this rate…
But no jobs, because no tourist!!!
Many good suggestions,
Penelope Dixon ChapaquiddickMany good suggestions, especially re. empty boats, but no one mentions the excess staff. If payroll is the biggest expense, why not shave it down. How many people does it take to stand around taking tickets and loading cars? NOT the usual 8 to 10. In the San Juan Islands the small boats have 1 or 2, the big boats 3 or 4.
The most mismanaged
Chris Thompson EdgartownThe most mismanaged enterprise ever! The Board of Governors should be replaced!
Looking at the rate fee chart
Bob Kelly Oak BluffsLooking at the rate fee chart, its the excursion fare that stands out like a sore thumb.
The excursion fare should be at least 50% of the regular fare as $36 is way too low. They should bring in a manager from Seattle where the rates are much lower and you can count on an on time ferry.
1. Washington State Ferries
Christine Senge1. Washington State Ferries has s a very cost-effective ferry system to the islands outside of Seattle that the SSA and the state of MA needs to study.
2. Stop building the $80 million ticket office. (I also get my tix on-line.)
3. All residents with confirmation on hospital letterhead of doctor's appointments/medical tests off-island should receive a discounted fare. Currently only people who vote on the island qualify for excursion rates. But many of us, who own homes here and spend half the year on the island, do not qualify for excursion. But we also go off-island for doctor and vet appointments. This needs to be addressed.
If raising fares allows them
Debbie B EdgartownIf raising fares allows them to retain staff,then it is needed and I'm for it. We need to support the crew that works so hard to make sure that we can get on and off the island. Making sure the boats have enough staff so they will not be cancelled by crew shortages is a good goal.
The SSA Charter worked until
Dee Ouchman Isles of LangerhansThe SSA Charter worked until it didn't. Time to think about State subsidies.(Just like about every other ferry system in the country.)
How about assigning 50% of
Fred Edg/HobokenHow about assigning 50% of the short term rental tax that is pouring in back to the steamship? The only caveat is that it should not go into effect until after the Board of Governors and current management are replaced because the money would be squandered.
Also, where are our elected state representatives? They should be pushing for either a state takeover or more funding from the state.
Simply put, this is insanity.
Islander EdgartownSimply put, this is insanity. $450 for a family of 4 on a round trip during a Summer weekend. The SSA Board of Governors needs to take serious action on cost containment. The fact that these fares are even under consideration demonstrates that the SSA Governors have been completely derelict in their oversight responsibilities. Keep it up — there will be no Island economy left because families will soon realize that this is an absolutely unaffordable island. Maine or the Cape will be the beneficiaries of this insanity.
Why institute a permanent 10
Chuck Hodgkinson West TisburyWhy institute a permanent 10 percent price increase to cover a temporary revenue shortfall caused by operational problems and resulting trip cancellations? Use the sinking and stabilization funds
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