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Falmouth and other port towns are officially absolved from any deficit the Steamship Authority incurs this year from COVID-related travel restrictions.

Governor Charles D. Baker signed the supplemental budget bill into law on Friday, July 24, ending a long process to relieve the port communities—Falmouth, Martha’s Vineyard, Nantucket, Hyannis and New Bedford—from covering expected end-of-year losses due to a massive drop in ridership since the coronavirus shutdowns began in mid-March.

Any losses from the cash-strapped ferry line will now be covered by the commonwealth, which is seeking reimbursement from the federal government.

“The core purpose of this bill is to establish spending authorization for costs that the commonwealth has incurred and continues to incur in response to the Covid-19 outbreak,” the governor wrote in a letter to legislators on Friday.

“Now that this authorization is in place, state agencies can finalize the documentation needed to secure federal reimbursement where available.”

Because it was included in supplemental Fiscal Year 2020 budget, the state is eligible to be reimbursed by the federal government through Federal Emergency Management Agency and the CARES Act. As such, the cost to state is expected to be zero, the governor wrote.

The Steamship Authority, with a yearly operating budget of $120 million, originally predicted it would finish the year as much as $60 million in the hole, but more recently that estimate has been lowered when it received $12 million in federal stimulus aid and is experiencing a modest uptick in ridership this summer. At a board of governor’s meeting earlier this week, Authority General Manager Robert C. Davis said the expected operating deficit is $25 million.

Falmouth and the other towns that are served by the ferry company are responsible for the end-of-year losses as set forth by the enabling legislation that created the Steamship Authority. The statute stipulates the islands would each pay 35 percent of the deficit, while the mainland municipalities of Falmouth, Barnstable and New Bedford would be responsible for 10 percent each. The only time this provision was used was in 1962.

“I am extremely grateful to see the progress of this supplemental budget bill and extend thanks to our state legislators on their ongoing support,” Mr. Davis said.

(1) comment

Gadfly

This is appropriate. I never could understand why towns had to share in the deficit. The idea may have been intended to hold the Authority's feet to the fire and keep them operating efficiently. (how's that working out?) Falmouth has minimum say in how this group operates so we should not have to pay for their lack of business, which is the root of their current deficit.

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