North Carolina collected about $2 million in ferry fares but spent $1.4 million collecting them; a new state law requires tolls on all ferry routes

North Carolina’s ferry system raises a basic public-transport question: how much should the state spend collecting fares when the service is essential to the communities it serves? The state’s ferries carry residents, workers, tourists and emergency evacuees across the sounds and rivers of its coast. Yet the revenue generated by some routes has historically been small compared with the administrative expense of collecting it. The issue is especially relevant to Ocracoke Island, which is reachable from the mainland mainly by ferry or private boat. For years, North Carolina operated a free vehicle ferry between Hatteras and Ocracoke while charging fares on other routes.

A ferry system that functions as a public road

According to the North Carolina Department of Transportation's NC Moves 2050 State of the System report, the Ferry Division operated 21 ferries on seven regular routes across the state's coastal waterways. In 2017, the system transported 1,801,573 people and 793,172 vehicles, making it the second-largest state-run ferry system in the United States. These ferries connect communities with schools, jobs, shopping and other essential services, while transporting goods and supporting emergency evacuations during hurricanes. Ocracoke Island, part of North Carolina's Outer Banks, illustrates their importance. The island is served by ferries from Hatteras, Cedar Island and Swan Quarter. Historically, the Hatteras-to-Ocracoke vehicle ferry was free, while the Cedar Island-to-Ocracoke and Swan Quarter-to-Ocracoke routes charged tolls. However, under legislation passed in 2026, tolls are scheduled to be introduced on the Hatteras-to-Ocracoke vehicle route from 1 January 2027.


When fare collection costs eat into revenue

This financial issue is highlighted in the state’s NC Moves 2050 document, which examines the ferry system using information dating back to 2017 and earlier. The report says the division collected about $2 million from ticket and commuter pass sales in the tolled system, while maintaining the necessary infrastructure and services for collection cost around $1.4 million. This implies that 70 per cent of the collected revenues were spent on the process, leaving approximately $600,000 to be accounted for in relation to ferry operations. The figures do not show whether the ferry service was profitable overall or whether fare revenue covered operating costs.

The report outlined three routes that generated toll revenue. Southport-Fort Fisher provided 46% of the total income, while the Swan Quarter-Ocracoke route produced 32% and the Cedar Island-Ocracoke route produced 22%. It presented two options: tolling all routes or eliminating tolls. In this case, the first option could generate additional revenue, but it would leave the toll route as the only way to reach Ocracoke. Under the second option, there would be no fare-collection cost, but the state would need to allocate more funding.

Why the funding debate has changed

The figures are historical, but the legal position has since changed. In July 2026, North Carolina enacted legislation requiring the Ferry Division to begin collecting tolls on all state ferry routes by 1 January 2027, including the Hatteras-Ocracoke vehicle ferry, which had historically been free. In October, the department recommended a one-way toll of $10 for standard vehicles on the Hatteras-Ocracoke route and $7 on three other previously untolled routes. These rates had not yet received final approval.

However, the recommendations were expected to generate an average of $4.4 million a year for vessel replacement, which still would not fully cover the cost of replacing a vessel every four years. The Board of Transportation also asked for a delay so more preparation could be completed. The NC Moves 2050 report noted that there are decreased passenger numbers, disruptions due to extreme weather, and a need for sustainable funding for maintenance and operation.

Tolling is now mandatory under the new legislation, and it is up to the state to figure out how to implement it while minimising the impact on communities that are dependent on the ferries for transportation. The gap between $2 million in revenue and $1.4 million in collection costs suggests that some transport systems are expensive to charge for, even when they are essential enough that governments cannot easily cancel them.