And she said if the cure wasn't to be found in her idea of handing over control to a regional ferry district then they should come up with a fix of their own.
"We cannot leave here without a solution," Gregoire said in her state of the state address.
Today, they don't have a plan but House and Senate members insist they've got an approach to bring fiscal stability to Washington State Ferries now and in the future by cutting labor costs, reforming management practices and raising funds for boats.
Bills have been introduced and hearings held. On Thursday, the Senate Transportation Committee considered a proposal to add a quarter to the price of a ferry ride to generate money for building or buying new vessels.
"When the governor challenged us on what can we do if we didn't do what she proposed, I said, 'All right, I'll come up with a package,' " said Sen. Mary Margaret Haugen, D-Camano Island, the committee's chairwoman and sponsor of the surcharge bill.
"We've heard the labor bill. We've heard the management bill. The other piece is money. This probably is not enough money but it at least starts us in the right direction," she said in the hearing.
The financial plight of the Washington State Ferries is a well-told story.
Initiative 695 passed by voters in 1999 eliminated the motor vehicle excise tax which covered large chunks of the ferry system's operating costs.
Now, fares cover about 70 percent of the ferries' day-to-day expenses with the rest coming from gas taxes deposited in the state's road fund.
Gregoire's proposed ferry budget for 2011-13 period is roughly $440 million and includes raising fares by 10 percent, adding a surcharge for fuel and reducing the number of daily sailings. To get the budget balanced, she counts on diverting $44 million from the road fund.
Lawmakers want to avoid large fare hikes or fewer sailings and think they can come up with some of the $44 million by good, old-fashioned cuts.
"We are scrubbing the ferry system budget, going line-by-line to find efficiencies," said Rep. Marko Liias, D-Edmonds, vice-chairman of the House Transportation Committee. "When we're done there'll be no grand plan or something to put on a poster board that you stand in front of."
They are turning to workers, managers and riders for a big chunk of it.
On the labor front, there are bills to cut several pay-related provisions in a collective bargaining agreement now under negotiation. Historically, ferry workers enjoyed more generous benefits than other state employee groups on items like overtime.
Lawmakers want that to end. They also want to end a much criticized practice of paying some ferry workers for their time and mileage traveling to and from a shift.
Those bills may not pass in a Democratic-controlled Legislature but members said their introduction helped stimulate ferry workers in their negotiations with the state.
That's not true, said Gordon Baxter, a lobbyist for unions representing roughly 1,600 Washington State Ferries workers.
Workers have been at the table and are agreeing to changes which will save as much as $10 million a year, he said. The amount may eclipse targets set by the governor, he said.
"If the legislators want to think they tricked the unions to go back to the table because they're so scared of these bills, well, that's disappointing," he said.
Regarding management, bills range from immediately privatizing leadership of the system to creating an accountability board to set performance measures and goals for managers. If they fail to achieve the goals, Gregoire could wind up firing the transportation secretary or ferries chief.
Finally, there's the matter of raising money.
Haugen's bill would pour quarters into a newly created vessel replacement account. The surcharge would be spelled out on each ticket.
Washington State Ferries, assuming an Oct. 1 start date, estimates it will net $6.3 million in the 2011-13 biennium and $7.8 million in the two-year budget after that.
Those sums are quite a bit less than the price of a new boat -- the Chetzemoka cost $77 million -- but it is a start, Haugen said.
"It's probably enough that we can begin to bond against it," she said.
Lawmakers said there's no quick remedy for the ferry's fiscal problems. They hope they've framed a foundation which will get them a lot closer to a cure this year.
"We're making a good-faith effort to address what (the governor) wanted us to do," said Sen. Curtis King, R-Yakima, the ranking Republican on the Senate Transportation Committee. "We're not going to be able to rectify the ferry system budget 100 percent but we'll be making a good start in the session for the next biennium."
David Moseley, assistant secretary of transportation in charge of ferries, said it's been the most "constructive discussion of our funding needs" since he took the helm three years ago.
Whether the governor agrees is anyone's guess.
"We won't know until the very last week of the session to see how it all works out," he said.
Jerry Cornfield: 360-352-8623;firstname.lastname@example.org.
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