Originating in the early 1900s, Puget Sound ferry service was initially provided by a number of companies using small steamers known as the “Mosquito Fleet.” By 1929, the ferry industry had consolidated into two companies: Puget Sound Navigation Company and Kitsap County Transportation Company. A strike in 1935 forced Kitsap County Transportation Company out of business and left the Puget Sound Navigation Company, commonly known as Black Ball line, with primary control of ferry service on Puget Sound.

After World War II, increasing labor costs made private operation of the ferry system increasingly challenging. In the late 1940s, ferry workers’ labor unions succeeded in securing higher wages from the Puget Sound Navigation Company. The ferry service provider petitioned the State Highway Department to allow a 30% fare increase to meet new operating costs. When the State refused its request, the Puget Sound Navigation Company tied up its boats, bringing much of cross-sound ferry service to a halt.

Creation of WSF
Washington State recognized that the ferries were a life line for many communities and there was a need for reliable ferry service to meet growing demand. In 1951, after numerous discussions with the State Legislature over fares and service, the Puget Sound Navigation Company sold all of its terminal facilities and ferries (with the exception of the Seattle/Port Angeles/Victoria, B.C. route) for $5 Million to a newly created Washington Toll Bridge Authority, now known as Washington State Ferries (WSF).

The ferry system was originally intended to provide temporary service until a network of bridges could be built connecting the west and east sides of Puget Sound. In 1959, however, the legislature rejected the plan to build numerous cross sound bridges. At that time, the responsibility for managing the ferry system was shared by the Toll Bridge Authority and the State Highway Commission.

The Toll Bridge Authority set fares and controlled the system’s finance, including long-term indebtedness, while the operation of the ferry system was controlled by the Highway Commission. In 1977, the two agencies were combined under the existing Washington State Department of Transportation (WSDOT).

Development of the Fleet
In its first year of service, the State operated ferry system carried approximately four million passengers. The boats the State purchased from the Puget Sound Navigation Company included a number of steel diesel-electrics from San Francisco, the Illahee, Klickitat, Nisqually, Quinault, Enetai, and Willapa; wooden diesel-electrics including the Chetzemoka, Kehloken, and Klahanie; steamers such as San Mateo and Shasta; wooden diesel-powered boats built in the Northwest such as the Rosario, Kitsap, Crosline, Leschi, Skansonia and Vashon; and a former great Lakes steamer, the Chippewa.

The new ferry system’s first challenge was to add boats to meet growing demands for service, relieving backups that had started occurring at terminals. Two ferries were purchased from Maryland’s Chesapeake Bay, the Rhododendron and the Olympic. In 1953, the State commissioned the Puget Sound Dredge and Bridge Company (subsequently Lockheed) to build the first Evergreen State-class vessel, which could carry 100 vehicles and 1000 passengers. Over the next 13 years, the ferry system responded to growing demand by rebuilding and expanding the existing fleet. However, the Evergreen State-class ferries could not keep pace with the demand. The Super-class ferries Hyak, Kaleetan, Yakima and Elwha were built in 1967, each able to carry 160 cars and 2500 passengers. Within several years even the Super-class ferries were unable to handle the demands of the system. To meet this need, the Jumbo-class Spokane and Walla Walla ferries were built in 1973 with a capacity of 2000 passengers and 206 vehicles. The Issaquah-class Issaquah, Kittitas, Chelan, Kitsap, Cathlamet and Sealth ferries were added in the early 1980s to improve operations and replace aging boats. These ferries each carry 1200 passengers and 100 cars (five have since been modified to carry 130 cars).

The fleet expanded during the 1997/99 biennium with the arrival of the Jumbo Mark II-class vessels, Tacoma, Puyallup and Wenatchee. These vessels, built by Todd Shipyards in Seattle came into active service in the 97/99 biennium. Each vessel carries 2500 passengers and 212 vehicles. Construction of a new high-speed passenger-only class ferry, the Chinook, was also completed this biennium. The Snohomish, the Chinook's sister ship, was received in the 1999/01 biennium.

Financial History
When the ferry system was first purchased by the State from the Puget Sound Navigation Company, it was intended to finance itself solely through the fare box (revenues). The original bonds issued by the Toll Bridge Authority in 1951 required that the system generate net revenues. The ferry routes sustained revenues in excess of operating expenses until 1960. The entire ferry/bridge system generated net revenue until 1974 because of the financial success of the Hood Canal toll bridge.

Tax support of the ferry system began in 1957 when the State Legislature brought ferry system employees into the State Retirement System. In 1959, the State Legislature created an account, funded by 0.25 cents per gallon of the State’s gasoline sales tax, to help pay debt service on revenue bonds issues by the Toll Bridge Authority if costs exceeded revenues. In 1960, the ferry system failed to meet the annual debt service requirements, and the ferry system received $672,000 from the State’s motor vehicle fuel tax to cover the bond payments. Additional ferry system/Hood Canal Bridge bonds were issues in 1963. However, since the early 1970s, all of the debt service payments for the ferry system bonds have come from motor vehicle fuel taxes, not from ferry system operating revenues.

Over time, Washington State has continued to provide tax support for ferry system operating and capital costs as a supplement to WSF-generated revenues from fares and other miscellaneous income. Since the 1970s, State tax sources have included a gasoline sales tax, motor vehicle registration fees. Additionally, WSF pursues federal and local funds for specific projects. The use of public funds for ferry system purposes is strictly regulated, and taxes imposed for operating and capital expenses are levied and tracked separately. The taxes used to fund operating and capital expenses have been raised over the years in order to cover growing operating and capital costs. In fiscal years 1998 and 1999, the ferry system generated revenue to cover 65% and 66% of its operating costs, respectively. The Washington State Transportation Commission mandates that the ferry system fare box generate a minimum of 60% of the system’s operating expenses. The remaining percentage is provided by tax support from the State.

WSF has been involved in the on-going assessment of fares since 1991. Fare changes during the 1997/99 biennium have included across-the-board fare increases of 2.3% and 2.2% in FY 1998 and FY 1999, respectively, to adjust for inflation and several fare policy changes such as fare rounding, revised commuter discounts, and a revision to the peak season vehicle/driver surcharge.

WSF Today
WSF is the largest ferry system in the United States, serving eight counties within Washington and the Province of British Columbia in Canada. Counties served include Pierce, King, Snohomish, Kitsap, Skagit, Island, San Juan, and Jefferson Counties. WSF’s existing system has 10 routes and 20 terminals that are served by 28 vessels. In fiscal year 1999, WSF carried over 11 million vehicles and 26 million people—over one million more walk-on and vehicle passengers and 500,000 more vehicles and drivers than in fiscal year 1997.