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March 13, 2013
Awonderfully ironic consequence of bad legislation (and the NC General Assembly’s ferry toll legislation is really bad) is that it inspires people to work very hard to find a better solution. It forces us to question issues that we have in the past taken for granted.Greg Piner
For instance, this question: If ferry tolls are bad to impose on the commuter ferries, are they also bad for the three ferries already being tolled? For reasons I will show shortly, the answer is yes. That leads to another question: Could the state make more tax revenue if tolls were removed from all ferries? I believe the answer is also yes.
I only came to this conclusion the other day, just before driving up to Raleigh for the DOT hearing on the ferry tolls. It might have seemed of little import, were it not for the fact that State House Representative Charles Jeter, Republican from Huntersville and Representative Paul Tine, Democrat, from Kitty Hawk arrived at this same conclusion, and will be introducing legislation to do away with tolls on all ferry routes. Several people from Pamlico County met with Rep. Jeter in Raleigh Monday, and were impressed with his enthusiasm to champion this cause.
So now, I will try to explain how eliminating all ferry tolls will increase tax revenue for the state. Hang with me on this one. I really believe it is our best chance to stop the ferry tolls.
Unless we can stop it, this July 1 the NC Department of Transportation will add tolls for the first time on the two river commuter ferries serving Pamlico County. They will also increase the tolls on the three ferries already collecting them. The General Assembly mandated these tolls in order to generate $5 million in gross revenue for the ferry system. The plan is destined to fail, costing the state millions in overhead, while generating little to no net revenue. The irony is that our ferry system has tremendous potential to increase tax revenue for the state, by simply eliminating all ferry tolls.
The existing ferry toll process is a really terrible way to raise revenue. Think about it. Just over $2 million per year of gross revenue is collected from tolling the Southport, Ocracoke, and Swan Quarter ferries. What isn’t often discussed is the fact that it costs almost $1 million per year in labor and IT expenses to collect that $2 million. The annual costs of adding tolls to the two river ferries will be even greater, approaching 60% overhead per year.
Now the real paradox. In spite of the cumbersome and inefficient tolling operations, the ferry system still generates tens of millions of dollars of tax revenue for the state each year. Between November 2011 and October 2012 total ridership on all NC ferries was just under 900,000 vehicles. A little over half of these vehicles were tourists. Using the state’s own estimates from the NC Division of Tourism, the tourists spend on average $1003 per stay. The total economic impact for coastal NC was $478 million dollars, generating over $42 million in tax revenue, dwarfing the $1 million net revenue raised by ferry tolls.
The proposed ferry toll increases have generated much debate during the last year. I hear almost daily someone saying, “Either toll all the ferries or don’t toll any”. The General Assembly has a golden opportunity to get rid of the failed, bureaucratic ferry toll system. Eliminating the ferry tolls and reservation system will save almost $1 million each year. The lost revenue from tolling will be quickly eclipsed by tax revenue gained from increased visitors to our coastal region.
Ridership on our ferries has dropped by over 130,000 vehicles since 2008. Eliminate ferry tolls and more people will use our ferries to visit the coast. Increase ferry tolls and fewer and fewer people will ride the ferries, leading to what many fear will be a death spiral for this vital resource.
The General Assembly must change the focus from what ferries cost the taxpayer, to what ferries generate in new tax revenue. Each new tourist family visiting coastal NC generates about $95 of tax revenue per stay. An increase of just 5 new visitors per day on each of our 7 existing ferry routes will generate over $1 million in new tax revenue. Get back the 130,000 visitors lost since 2008 and the state will gain $6.5 million in tax revenue.
Coastal NC has been ravaged in recent years with natural and economic disasters. Local citizens and small businesses are looking to the General Assembly to ease their burden. Don’t slap us with a bureaucratic ferry toll that will slow growth, and raise almost no net revenue. Get rid of all the ferry tolls and help the coastal region prosper. Spread the word across America; Come and visit coastal NC, where the fish are jumping, and the ferries are free.
Greg Piner is a resident of Oriental, NC.