Alaska
Alaska ferry system faces $78M budget hole after Trump administration delays federal grant
The Alaska ferry system is at risk of running out of operating funds this summer because of a frozen federal grant program, according to state transportation officials.
Nearly half of the Alaska Marine Highway System operating budget in the current calendar year was intended to be funded with a grant from the Federal Transit Administration, according to a budget approved by lawmakers last year. But the grant, which was expected to be issued last year, has not yet been released.
That has left a nearly $78 million hole in the $170 million budget for the current calendar year. Without a solution, ferry boats that provide transportation to communities in Southeast Alaska, Kodiak and along the Aleutian chain could be left without the funds needed to continue running as soon as July.
Amid a tight revenue outlook, the state has few options for backfilling the $78 million that it was counting on receiving from the federal grant, lawmakers in the House and Senate budget committees said in recent days.
The federal grant, known as the Ferry Service for Rural Communities Program, was created through the bipartisan infrastructure bill that passed in 2022.
Alaska’s U.S. Sen. Lisa Murkowski was instrumental in creating the program and designing it to benefit the ailing ferry system, which has seen decreased service and reliability amid years of declining state investment.
Murkowski’s spokesperson Joe Plesha said Monday that the senator had “received a commitment” that the grant funding window would open “this spring.” However, he said her office didn’t have a specific time for releasing the funds, nor any specifics on the amount of funding that would be available this year, given that funding was not released last year. The state is again banking on a federal grant through the program to fund ferry operations in the 2027 calendar year.
In the first three years of the federal program, the state received $45 million, $38 million and $66 million for ferry operations. Because of the grant timeline, the Alaska Legislature has built the grant into its annual budget each year before the specific funding amount has been announced.
Last year, lawmakers — at the request of Gov. Mike Dunleavy — built a $78 million federal grant for ferry operations into the state budget. But after President Donald Trump took office, the grant application window never opened.
In response to a request for comment, the Federal Transportation Administration said in a December statement that it “anticipates announcing a Notice of Funding Opportunity for its Ferry Programs in 2026.” The FTA press office did not provide an explanation as to why the funding had not been awarded in 2025, or when in 2026 the funding opportunity would open.
The office did not immediately respond to additional questions sent Monday.
Murkowski personally reached out to U.S. Transportation Secretary Sean Duffy “to ensure that steps are taken so that this funding can get out the door as soon as possible,” her spokesperson said in December.
In previous years of the program, the application window has opened between April and July. Specific funding amounts were announced between five and six months after the window opened. That means that even if Trump administration opens an application window in the coming days or weeks, the funding amount awarded to Alaska likely won’t be known until after the legislative session ends.
State transportation officials, including Transportation Commissioner Ryan Anderson, told the Alaska Senate Finance Committee on Monday that they will be traveling to Washington, D.C., later this month to advocate for the funding to be released.
But they provided few details on how they would proceed if the funding is not awarded in time to keep ferries running through the summer months, which are the system’s most busy and most profitable.
Department officials are proposing to move the ferry system from a calendar year budget cycle to a two-year cycle, which would give them more flexibility in balancing state and federal funding streams.
One idea that Anderson raised was to shore up the system’s available funding by selling the Matanuska, a mainline vessel built in 1963. That ferry has not been in regular operation since 2020 due to structural problems that have been deemed too costly and complicated to fix. Instead, the vessel has been used to house ferry workers in Ketchikan amid a housing crunch that has made it difficult to attract new workers and fill vacancies. But Anderson said other operational ferries, the Kennicott and the Columbia, could be used intermittently as so-called “hotel ferries,” instead of the Matanuska.
It is unclear how much the state would save by selling the Matanuska. In 2022, the state sold the Malaspina — another mainline ferry built in 1963 — to Alaska businessmen John Binkley and David Spokey for $128,250.
Two US soldiers were wounded by a brown bear during a training exercise in Alaska on Thursday, the US Army stated.
Anchorage Daily News reported that the soldiers were from the 11th Airborne Division, and that the exercise had been a “land navigation training event” near Joint Base Elmendorf-Richardson.
State wildlife officials said that the bear attack seemed to be a defensive one, from a bear which had recently emerged from its den. Staff members from the Alaska Department of Fish and Game collected evidence at the scene in an attempt to learn more about the bear, such as its species and gender.
“The incident is currently under investigation, and we are working closely with installation authorities and local wildlife officials to gather all relevant information and ensure the safety of all personnel in the area,” the 11th Airborne Division said in a statement, reported ABC News.
ABC News also cited an 11th Airborne Division spokesperson, Lt.-Col. Jo Nederhoed, who said that the two soldiers had been seriously wounded, but were receiving care at a hospital in Anchorage, and had shown improvement by Saturday morning.
“We hope both individuals have a full and quick recovery, and our thoughts are with them during this time,” Fish and Game Regional Supervisor Cyndi Wardlow said in a statement reported by Anchorage Daily News. “In this case, having bear spray with them in the field may have saved their lives.”
Both of the soldiers reportedly had and used bear spray during the attack.
The bear’s condition and whereabouts are currently unknown.
Up, up and away … that’s where most travel prices are going.
It’s true. Not only are our nation’s geopolitical thrusts in the Mideast affecting the cost of your fill-ups, every component of your trip from airfares to car rentals and hotel stays are subject to price hikes.
Imagine filling up a jetliner with jet fuel that’s doubled in price. It’s enough to melt your credit card, regardless of the number of points you get for every dollar spent!
Because the price of oil affects everything, higher prices are eating away at your travel budget in many ways.
Bag fees
There’s lots of press on this. All airlines are increasing their checked-bag fees because of the jump in fuel prices.
Back in 2009, Alaska Airlines instituted a $15 fee for the first checked bag and $25 for the second bag. At the time, there was no charge for the first bag and a second bag was $25.
Last week, Alaska Airlines, along with other major airlines, increased its fees to $45 for the first checked bag and $55 for the second bag. Delta Air Lines charges the same.
Even if the cost of oil comes down, I don’t expect bag fees will ever be reduced.
Travelers who live in Alaska are somewhat insulated from the new hikes because both Delta and Alaska Airlines offer two free checked bags, with conditions:
1. Alaska offers two free checked bags for travelers flying to or from Alaska who are enrolled in Club 49. This does not affect other flights on Alaska. Separately, ATMOS credit card holders can get a free checked bag. Also, elite members of the ATMOS scheme get one or two free checked bags systemwide.
2. Delta offers two free checked bags for travelers flying to or from Alaska who are SkyMiles members who live in Alaska. Again, this does not apply to other Delta flights. Separately, Delta American Express cardholders can get a free checked bag.
3. Elite-level travelers with the oneworld airline cartel, including Alaska Airlines, can get one or two checked bags on American, British Airways, Japan Airlines, Qantas or other oneworld carriers.
[Anchorage’s international airport rolls out self-driving wheelchairs]
Main Cabin vs. Basic Economy
The spread between the lowest available price, Basic Economy, and a more flexible ticket, Main Cabin, has increased. While the difference used to be $20-$30 each way when the Basic Economy scheme was introduced in 2018, the round-trip upcharge now can exceed $100.
For example, the lowest Basic fare to Portland is $337 round-trip on Alaska Airlines. The upcharge to Main Cabin, with full loyalty points, pre-assigned seats and more flexibility on changes and cancellations, is $447, a 33% upcharge.
This trend is not specifically attributable to the new Iran War. It’s just a cost that continues to rise.
New fees
I’m impressed at the creativity of airline people who dream up new fees. Here are some of my favorites from Alaska Airlines:
1. Phone reservations: $15
2. Partner award booking fee: $12.50
3. Pet travel fee: $100 in the cabin, $200 in the baggage compartment with a kennel
4. Left on board item return fee: $20
On Condor Airlines, operating the only nonstop service from Anchorage to Europe, travelers can choose from four different bundles in economy class. The least-expensive, Economy Zero, from $840 round-trip, features fees for travelers:
1. Carry-on bag fee, up to 8kg: $35; a small bag like a purse always is included for free
2. Checked bag: $75
3. Airport check-in: $30
All three of these fees are included in the next-highest fare bucket, Economy Classic, from $900 round-trip. It’s cheaper to buy the bundle than it is to buy the components a la carte. Seat assignments are additional, from $25 for economy.
Airfares on the rise
There are a few good deals available for travel to select West Coast/Intermountain destinations in May, including:
1. Anchorage-San Francisco on Alaska Airlines, from $307 round-trip. Fly May 15-28 only. Add $90 round-trip for Main cabin.
2. Anchorage-Los Angeles on Alaska Airlines, from $317 round-trip. May 15-25 only. Add $90 round-trip for Main.
3. Anchorage-Phoenix on United, Delta or Alaska, from $267-$287 round-trip. Fly May 8-June 9 only. Add $90-$100 for Main.
4. Anchorage-Denver $357 round-trip on Delta. Fly May 8-June 9 only. Add $90 round-trip for Main.
For travel to other destinations, or later in the summer, be prepared to pay more.
Flying to Hawaii? Alaska Air’s nonstop prices out at $706 round-trip between May 30 and June 6. Add $110 round-trip for Main.
Nonstop flights from Anchorage to Salt Lake City start at $669 round-trip with Delta on May 17. That’s $100 more than the cost for the same flights last month. Add $90 more for Main.
Hotel costs continue to rise, accompanied by pesky resort fees.
The Outrigger on the Beach in Waikiki is a very nice beachfront hotel. It’s not plush, or the nicest property. But it’s solid. The cost is $334 per night.
But there’s more: a $50 per night resort fee, plus a variety of taxes and charges, totaling $112.55 per night.
Down in Seattle, the Sound Hotel in the Belltown neighborhood is marketed by Hilton. The discounted rate for “Honors” members — it’s free to join — is $313.34 per night for a king room in late May. Taxes and fees add an extra $56.40 per night.
There’s no appreciable bump yet for hotel rates as a result of the oil price surge. Yet. But if these hotel rates seem high, they’re in line with hotel rates in Anchorage this summer. At the Sheraton in Anchorage in June, it’s $450 per night, plus $54 in taxes and fees, when booked at Expedia.
Car rentals are not cheap
My go-to site for car rentals is the Costco site, which compares major brands and automatically includes Costco discounts.
In Las Vegas, for a one-day rental in May, Budget charges $67 per day, which includes taxes and fees of $22.77. In Anchorage, the same kind of car, medium SUV, costs $92.97 with Alamo.
The biggest differences so far in car rental rates seems to be the bill you’ll pay when you fill up the tank before returning. There’s no appreciable jump in prices because of the new war.
When it comes to making travel arrangements for the spring and summer, it’s more risky making completely non-refundable arrangements.
I made the decision to purchase most of my summer travel plans in advance, but only after determining I would not need to change the dates. Particularly with airline tickets, it’s expensive to change your dates.
There’s lots of uncertainty regarding travel arrangements, particularly international travel. As fuel prices go up due to oil shortages, travel companies will look for ways to recoup the increased costs. In most cases, those higher costs will be borne by travelers.
ANCHORAGE, Alaska (KTUU) – The reopening of the Strait of Hormuz has led to a decrease in oil prices nationally, but Alaska’s senior senator said the state faces a different situation that could threaten rural communities.
“If you can’t produce power because you don’t have the diesel or you just can’t pay the prices, your little communities can collapse,” Sen. Lisa Murkowski, R-Alaska, said at a Friday press conference at the Arctic Encounter Summit in Anchorage.
The price of oil has been a double-edged sword for Alaska. On one hand, the increased price of North Slope oil brings more revenue to the state, but consumer prices can also rise.
North Slope oil prices were $106.36 a barrel on Thursday.
“This is a very precarious time,” Murkowski said. “Our state has enjoyed a bounty because we have benefited from the higher prices of oil that goes into our treasury, but it’s the Alaskans in … the off-road communities that are threatened to be hit most hard.”
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