N. Ferry to reduce walk-on rate
Tax exemption law prompts petition for $1.50 resident fares
By Cara Loriz
“This is really great news for Shelter Island,” Bridg Hunt, general manager of North Ferry Company, said of a new law exempting ferry companies that operate entirely within New York State from sales tax on purchases of boats and more. Both North and South ferry companies will be exempt from paying 4 percent in state sales tax on their new boats, repair costs, fuel and supplies. And North Ferry will translate the new law into a new resident walk-on rate, down from $2 to $1.50 per trip.
“This is an opportunity to take savings from the state and pass it along to our rate payers,” Mr. Hunt said when he announced a plan to petition the Suffolk County Legislature for an adjustment in the North Ferry rate structure Tuesday. If approved, residents will be able to buy bags of 10 tokens for $15 as early as November or December of this year.
South Ferry President Cliff Clark told the Reporter last Friday, September 26, that a bill sponsored by Senator Ken LaValle, 1st District Assemblyman Marc Alessi and South Fork Assemblyman Fred Thiele was law after being signed by Governor David Paterson. That means that South Ferry will be able to purchase their new boat, on order since last year, without paying 4 percent in state sales tax. Interstate ferry companies, like Cross Sound Ferry, have enjoyed a state sales tax exemption for years but not so the Shelter Island and Fire Island ferries that operate entirely within state waters. “We feel blessed that it has been corrected, especially in the current financial environment,” Mr. Clark said.
Because the law is retroactive for boat purchases made between January 1 and August 31, 2008, North Ferry is also exempt from the sales tax on their new boat, the Manhassett, delivered last February. To pay for that boat, the ferry company won county approval of a new fare structure in September 2006 that doubled the fares for walk-on and car passengers from $1 per trip to $2; resident car passengers received a round-trip discount, crossing for $1.50 each way. Opposition to the rate increase during public hearings was not widespread.
But residents protested en masse after the rate increase went into effect and a special hearing of the New Ferry Study Group, a local advisory group that makes recommendations to the county legislature, was convened in January 2007. An overflow crowd called for relief from a passenger fare that made it more expensive for a family to walk to Greenport than to drive. Legislator Ed Romaine, then the chairman of the group, sympathized and proposed a county resolution to revoke authorization for the rate increase but no action was taken by the county or the ferry company.
In July 2007, North Ferry offered to roll back the walk-on fare to $1 for a limited period of time if the sales tax legislation, originally proposed several years ago, was passed promptly. However, there was no roll back — no action was taken before the legislature recessed for the year.
But this year the bill was passed by the legislature and last week signed into law by the governor, an act Town Supervisor Jim Dougherty, speaking at the Town Board work session, described as “courageous” in a time when the state is pinching every penny of revenue.
“This finally squares up that speed bump where it costs more to walk,” Mr. Hunt said of the proposed resident walk-on rate, adding, “We took such a hit with that last rate structure.” He described the new walk-on rate change as long-term and the only change requested in the petition to be filed with the legislature, a request that will take time for the county to process. Legislator Romaine will advocate for quick passage but the Budget Review Office is allotted 45 days to review the proposal, and public hearings must be held at the legislature.
Mr. Hunt commented on the tax exemption and rate relief it will bring. “It’s great for everybody. It’s a win-win for Shelter Island.”
Earlier drafts of the bill exempted sales tax on capital expenditures only. The final law also exempted purchases for fuel, provisions, supplies, maintenance and repairs necessary to operate the vessel — an additional savings introduced into the bill this year, Mr. Hunt said. According to the law, applications for retroactive refunds or credits must be made by December 31, 2009; Mr. Hunt has already applied for an exemption on the $172,000 sales tax paid on the new boat. Ferry companies must file a statement of projected savings with the county, which must be factored into their rate structure. The effective date is September 1, 2008 for all purposes other than boat purchases so it will apply this quarter when the ferry companies next file their sales tax return with the state.
“I am proud to have worked with the North Ferry Company to see the vision of this legislation come to light,” Assemblyman Alessi commented. “A year ago we came up with the plan to use the tax savings provided by this legislation as a means to roll back the fares on the ferry. I applaud the Governor for signing this legislation which now will give the customers a reduced fare at a time when every bit of savings helps.”
Mr. Thiele commented, “I was pleased to sponsor this legislation with Assemblyman Alessi and Senator LaValle that will benefit both the ferry companies and their passengers with lower costs and lower fares. It will grant intra-state ferries tax parity with their inter-state counterparts that already had such an exemption. The Governor made the right decision in signing this bill.”
“Ferry boats are invaluable to our state transportation system,” said Senator LaValle. “This law will help prevent rate increases and provide significant savings for the ferry company ... As the cost of operating a ferry boat continues to rise, this law will provide ferry companies financial relief and ensure that ferry rates are affordable for riders,” the senator concluded.
Mr. Clark said that the exemption will save South Ferry $80,000 in taxes on the new boat alone. That cost, coupled with tax exemptions on fuel and other purchases, won’t need to be passed on to travelers, he said. Mr. Clark added that representatives Alessi, Thiele and LaValle “along with some other elected folks deserve much credit. I would think Alessi most of all” for his efforts on the bill.
