Penny-Wise, Pound-Foolish?


The Maine State Ferry Service has announced a plan to raise fares for ferry use. This plan can be viewed by using two of many possible approaches. One involves the use of the adjective micro and the other, macro.

A micro view would tell us that the ferry fare exists in a vacuum. Raising the fare will only affect a limited number of people. The number of these people would be insignificant as they are contained within a vacuum that is isolated from the world that surrounds them. Other events, whether current, historical, or of wider economic impact, are insignificant and irrelevant.

The second adjective, macro, gives a different perspective. It tells us that no event exists in isolation. Any event is part of a wider expansive world and no act is singular in its occurrence or effect. Some may popularly refer to this as: “The Law of Unintended Consequences.”

We can begin to question whether or not the Ferry Service and its decisions exist as an isolated entity. If it exists totally independent of all social and economic systems, our questioning ends here. However, if the Maine State Ferry Service is part of a Maine state transportation system, our perspective must change.

History tells us that transportation systems are of extreme economic importance. We all know of the highway system of the Roman Empire. While of military use, it was a major economic force in acquiring and maintaining the wealth of the empire. Historians have pointed out that one of the reasons why the Romans attacked Masada was that its occupation enabled rebels to block a major transportation route necessary for economic trade.

England in the 18th century constructed a canal system that facilitated transportation and helped make Britain an economic powerhouse. Governor Clinton of New York was initially criticized for spending money on his “Big Ditch.” However, it enabled New York to become an economic powerhouse in the 19th century. In more recent memory, the Eisenhower Highway System also brought economic benefit to the United States.

Is there a transportation system in Maine and how can it affect the Maine economy?

It may be of real importance to view the islands in Maine not just as destinations on a map but as economic generators. If we use Swans Island as an example, the number of pounds of lobster landed can be estimated at 2,000,000 pounds per year. At an average of $4 per pound, the island generates about $8,000,000 directly into the Maine economy.

This income directly supports approximately 100 taxpaying families who are economic engines and are not a burden on the State of Maine. They are producers and contributors to the economic well-being of Maine. These fishermen provide more than a primary contribution. Their product is transported, processed, and distributed, creating other jobs. Fishermen create benefits far beyond initial sales. These additional transactions add greater value to the worth of their product and provide additional jobs and income. Movement of their product adds to the economy of Maine. It is within reason to say that the total value of their efforts provides a valuable economic extension to the entire state. This is true of all island fishermen, not just Swans islanders.

At this period in time, good-paying jobs are a national issue. If the State of Maine is trying to improve its economic climate, is it prudent to attack workers and an industry that provides fuel for the Maine economy and jobs throughout the state?

The point that I am trying to make is simple. Costs of maintenance, fuel, bait, supplies, trucks, boats, and unexpected contingencies have reduced the profit margin for fishermen. Their economic well-being is precarious. Some people have given up fishing. Is the state willing to gamble with an industry that has aided the economy for so long?

Lobster dealers spend tens of thouands of dollars per year on ferry costs. Additional costs will be passed on to the margin made by the fishermen. Fishermen must get supplies vital to their production. Is the state willing to indirectly tax hard-working fishermen for their labors?

Tourism is another mainstay of the Maine economy. Swans Island once had a solid summer rental income base. This income has declined over the recent past. A small but steady growth has begun. Increased fares will only serve to discourage tourism. If fares affect the rental value of property, real estate values may be negatively influenced. This decline in real estate values may lead to an increased tax burden on all property owners.

Many islands have stores that depend on summer tourism for survival. If increased fares diminish tourism, these stores that provide islanders with basic necessities may not survive.

The ferry fare increase is really an indirect tax. Indirect taxes are hidden taxes. They are economically inefficient and not as productive as direct taxes. Indirect taxes historically have been inefficient and, in some cases, destructive.

The news media has reported that the State of Maine is closing some toll booths. It is reported that this will create a deficit in the tens of millions. Will the ferry fare make up for this decision’s deficit? Is it time to reinvest in the transportation system using the toll revenues that the state now plans on discounting?

We might also consider streamlining the Ferry Service management. Recent multiple breakdowns have shown a lack of efficiency on their repair and maintenance policy. Who is responsible for this inefficiency? Can the Ferry Service provide us with a flow chart describing and defining the positions of each management employee and their responsibilities?

Can measures be introduced to increase ferry cost-effectiveness? San Francisco has pioneered many changes to make San Francisco Bay ferries more cost-effective. Can we learn anything from their efforts? Could the ferry service try to increase ridership with tickets that encourage tourists to spend a full day of touring on an island? This has worked for years on the Cranberry Islands.

It is my hope that through careful thought and planning, we may seek ways to invest in the economy of Maine. It is not enough to believe that one is saving money. The full ramifications of what one does in order to save money must be carefully measured. It is not enough to simply say that money is being saved.

John R. Williams
Swans Island, Maine