Originally published by Island Free Press: Ferry tolls are coming: What to know before the September listening sessions
When Hatteras and Ocracoke residents walk into public listening sessions next week on North Carolina’s new ferry toll mandate, some parts of the equation will already be settled.
Unless state lawmakers change the law, tolls must begin on the Hatteras-Ocracoke ferry and every other currently free state ferry route by Jan. 1, 2027. The law also establishes a $150 annual pass for qualifying coastal residents and active-duty military personnel and directs the money collected through fares toward replacing vessels in the state’s aging ferry fleet.
But many of the questions that will determine what tolling actually looks like for Hatteras and Ocracoke remain unanswered.
How much will a trip cost? Will motorists stop and pay an employee, buy a ticket online, use NC Quick Pass, or have their license plates photographed and receive a bill later? Will Ocracoke residents receive additional protections beyond the $150 annual pass? What happens with ambulances, law enforcement vehicles, and other public-service traffic? And how will a payment system work at the north end of Ocracoke, where vehicles often queue directly on N.C. Highway 12 rather than entering traditional stacking lanes?
Those questions are no longer theoretical.
The N.C. Department of Transportation’s Ferry Division is developing the policies, recommended rates, payment and collection systems, and infrastructure needed to comply with the new law.
The five public listening sessions are scheduled for September, including Sept. 8 in Hatteras and Sept. 9 in Ocracoke, and Ferry Division Director Jed Dixon has said the agency is committed to keeping affected communities informed as the implementation plan is developed.
But the meetings come with an unusually short timeline. The Ferry Division is scheduled to present its proposed tolling methodology and recommended rates to the N.C. Board of Transportation on Oct. 8 and return Nov. 5 seeking approval of the tolling policy and rate structure. NCDOT must report to lawmakers by Dec. 1, and toll collection is required to begin one month later.
Meanwhile, Dare County and eight other coastal counties are pursuing a joint resolution asking state leaders to permanently exempt locally registered vehicles from ferry tolls, which adds another wrinkle to the mess of details that need to be worked out.
Against that backdrop, here is what Hatteras and Ocracoke residents should know — and what remains to be decided — before the September listening sessions.
Are ferry tolls definitely coming?
Under current North Carolina law, yes.
The budget signed into law on July 7 requires the Ferry Division to begin collecting fares on all state-operated ferry routes by Jan. 1, 2027. That means the issue before NCDOT is no longer whether it has authority to toll the currently free routes; the agency has been directed by the General Assembly to do so.
The General Assembly could still change the requirement before Jan. 1, but efforts so far to postpone or remove the mandate have been unsuccessful.
Ocracoke community leaders asked lawmakers in July to delay implementation until Jan. 1, 2028, arguing another year would give the Ferry Division and Board of Transportation time to establish rates, develop a collection system, gather public input, and resolve a wave of unanswered operational questions.
A subsequent state budget corrections bill did not include a change to the ferry toll deadline, leaving Jan. 1 in place.
Which currently free ferries will become tolled?
Four vehicle ferry routes that currently operate without fares will be affected: Hatteras-Ocracoke, Currituck-Knotts Island, Bayview-Aurora, and Cherry Branch-Minnesott Beach.
North Carolina already charges fares on the Cedar Island-Ocracoke, Swan Quarter-Ocracoke, and Southport-Fort Fisher vehicle routes, as well as the seasonal Ocracoke Express passenger ferry.
The new law therefore does not create ferry tolling from scratch statewide. What it does is extend the requirement to routes that have historically operated for free — including Hatteras-Ocracoke, where free state-operated vehicle ferry service has existed for nearly 70 years.
How much will it cost to ride the Hatteras-Ocracoke ferry?
That is still unknown.
The budget does not establish the individual toll for Hatteras-Ocracoke or any other route. Instead, the Board of Transportation, in consultation with the Ferry Division, is responsible for setting the fares.
Various figures have appeared during the ferry toll debate, but none should be confused with a final state-approved fare.
Earlier legislative proposals and discussions contemplated new tolls on Hatteras-Ocracoke, often hovering at $20 one way, or $40 round trip. The Ocracoke Access Alliance (OAA), meanwhile, recommended a $10-per-trip fare on Hatteras-Ocracoke, or alternatively a single $20 charge collected when departing Hatteras with no toll charged on the return crossing.
Those are advocacy recommendations, not the fares that will necessarily emerge from NCDOT’s current process.
The Ferry Division is scheduled to present its proposed tolling methodology and recommended rates to the Board of Transportation on Oct. 8.
What is the $150 annual commuter pass?
Unlike the still-unknown individual ferry fares, the $150 annual pass is already written into the state budget that was passed in July.
The legislation creates a $150 annual commuter pass for permanent residents of North Carolina’s coastal counties and active-duty military personnel. The pass applies to one vehicle and allows ferry travel without an additional per-trip charge. The $150 statutory price remains in place through June 30, 2028, after which the Board of Transportation may set the price.
For frequent ferry users, that could make the annual pass one of the most important pieces of the new system.
But the pass should not be confused with the Ferry Division’s existing Priority Pass program.
The commuter pass concerns payment. The existing Priority Pass concerns boarding priority for qualifying residents and essential-service users. Purchasing the new $150 commuter pass would not automatically give a traveler priority boarding privileges.
Exactly how the new annual pass will be issued, verified, and connected to a vehicle is among the many practical details the state must still work through.
Will Ocracoke residents continue to ride for free?
Not under the law as currently written.
The new statute provides the $150 coastal resident commuter pass rather than a blanket exemption for permanent Ocracoke residents.
That differs from what the Ocracoke Access Alliance proposed earlier this year. OAA called for a free annual pass for full-time Ocracoke residents tied to a driver’s license and vehicle registration showing an Ocracoke address.
Justin LeBlanc of the OAA said the proposal was based on the argument that “all North Carolina residents should have at least one toll-free transportation option to reach their homes.”
Whether additional discounts or special rate categories will be proposed as part of the Board of Transportation’s toll-setting process remains unresolved.
What about the coastal counties that are seeking an exemption?
A new multi-county resolution seeks a permanent ferry toll exemption for locally registered vehicles, although it would require action by state leaders to take effect.
The proposed resolution involves Beaufort, Brunswick, Carteret, Craven, Currituck, Dare, Hyde, New Hanover and Pamlico counties. It asks Gov. Josh Stein and the N.C. Department of Transportation to waive all ferry tolls and fees for personal and commercial vehicles registered in counties with ferry terminals.
The Dare County Board of Commissioners is scheduled to consider adopting the resolution during its Sept. 1 meeting in Manteo.
The proposal would go further than the relief already provided under state law. Instead of requiring eligible coastal residents to purchase the new $150 annual commuter pass, the counties are seeking a permanent exemption from ferry tolls for locally registered vehicles.
The resolution argues that ferries function as essential highways and bridges for coastal communities and that charging residents to use them amounts to “an unfair system of double taxation.” It also asks that any revenue adjustments needed to support the ferry system focus on nonresident and seasonal tourism traffic rather than local citizens.
Approval by the participating counties would not change the law by itself. Unless the General Assembly revises the tolling requirement or state officials establish an applicable exemption, toll collection must still begin on all ferry routes no later than Jan. 1, 2027.
What vehicles are exempt?
The law specifically exempts school buses and certain other vehicles used to transport students. It does not expressly provide the same standing exemption for ambulances, fire apparatus, law enforcement vehicles, county vehicles, utility crews, or other public-service traffic.
Current law does, however, allow the NCDOT secretary to suspend toll collection on a ferry route serving an area under a declared state of emergency for the duration of that emergency – a practice that has been in place for years.
That distinction is important for Hatteras and Ocracoke, where hurricanes and mandatory evacuations are a regular part of emergency planning. While there is a mechanism for suspending tolls during a declared emergency, how ambulances, law enforcement, and other public-service vehicles will be handled during ordinary operations remains unresolved.
Those questions have already surfaced in Ocracoke discussions. At a July community meeting, participants specifically asked how these emergency vehicles would be treated under the eventual collection system.
How will motorists actually pay?
That may be the biggest implementation question still unanswered.
The law requires toll collection, but it does not mandate a particular collection system.
Several possibilities exist.
The state could use traditional staffed booths or payment stations, where motorists stop and pay before entering the ferry line. It could expand its existing online ferry ticketing and reservation platform. It could use NC Quick Pass and license-plate recognition technology similar to the state’s electronic toll highways. Or it could develop a hybrid system that combines multiple payment options.
Each approach comes with tradeoffs involving cost, staffing, traffic flow, equipment and maintenance, and implementation time.
NCDOT has said the payment and collection system remains under development ahead of the October presentation to the Board of Transportation.
In a previous interview with the Island Free Press, Sen. Bobby Hanig criticized the process that led to the mandate, arguing that lawmakers established the tolling requirement without first developing a blueprint for any sort of implementation.
“You can tell it’s agenda-driven because there’s no plan,” Hanig said. “A few leaders decided this was what they wanted to do. There wasn’t a lot of thought put into how it would actually work.”
Hanig stressed that his criticism was not directed at the Ferry Division, which was left with the task of developing and implementing the system within the timeline established by the new law.
“The Ferry Division is working their tail off right now to try to figure out how to get this done, but I don’t see a foreseeable way for them to get it done without a bunch of hiccups,” Hanig said. “There’s so much that has to go into it.”
Why is Hatteras-Ocracoke so difficult to toll?
Because it does not operate like the ferry routes that already collect fares.
The Cedar Island-Ocracoke and Swan Quarter-Ocracoke routes have three or four scheduled departures per day, and allow travelers to reserve space in advance.
Hatteras-Ocracoke is a high-volume, first-come, first-served operation with 36-52 departures per day.
Vehicles arrive from 4:00 a.m. until midnight and move into stacking lanes at Hatteras, while traffic on the Ocracoke side lines up directly on N.C. Highway 12 before boarding the next available ferry.
That means there is currently no universal checkpoint where every motorist stops to buy or display a ticket. And approximately 165,000 vehicles use the Hatteras-Ocracoke vehicle ferry annually, according to figures previously cited by the OAA and the Outer Banks Visitors Bureau.
Leblanc has also described Hatteras-Ocracoke as fundamentally different from the state’s existing reservation-based toll operation when the question of how the new toll will work arises.
“This is not a system where you just expand the existing reservation system and toll system to the rest of the fleet,” LeBlanc said in a July interview. “This is a completely different beast. Something has to be created from scratch, and doing that in five months is going to be really hard.”
Any collection system would therefore have to introduce a new payment step without creating major backups or fundamentally disrupting the route’s first-come, first-served character.
And with the timeline requiring the NCDOT to have a plan in place by December 1, it’s hard to imagine a complicated system that could be fully launched and functioning in a month.
Could NC Quick Pass be used?
Potentially.
North Carolina already has an electronic toll operation that includes NC Quick Pass customer accounts, transponders, license-plate billing, and Bill by Mail. Those existing systems could provide a foundation for ferry toll collection rather than requiring NCDOT to build an entirely new payment network.
For Hatteras-Ocracoke, an electronic system could potentially identify vehicles as they enter the ferry line and charge compatible accounts automatically, while vehicles without accounts could be billed through license-plate recognition.
That approach could preserve traffic flow better than requiring every motorist to stop at a booth, and would also reduce on-site staffing needs – a clear benefit considering that recruiting personnel is a constant challenge.
But integrating ferry tolls into NC Quick Pass would still require new infrastructure, ferry-specific pricing and software, annual-pass and exemption rules, testing, public education, and potentially changes to existing vendor contracts.
A previous implementation story found that comparable electronic tolling projects elsewhere generally involved months or years of planning, installation, and testing before becoming fully operational.
Could the existing ferry ticket system be used instead?
Possibly, and that could provide another route to implementation.
NCDOT already sells advance tickets and reservations for the longer Ocracoke-mainland ferries. That platform could conceivably be modified so travelers purchase a fare online without reserving a specific departure.
A Hatteras-Ocracoke ticket, for example, might remain valid for a certain period rather than guaranteeing a place on a particular ferry, allowing the current first-come, first-served boarding system to remain intact.
Travelers arriving without tickets could potentially use a mobile website, kiosk, or staffed payment point.
The challenge is that Hatteras-Ocracoke has never required every traveler to purchase a ticket before boarding. Adding verification to a high-volume route without causing delays would require new procedures, equipment, and staff training.
That is one reason the September sessions matter: the eventual system may affect not only how much travelers pay, but how they physically move through the two ferry terminals.
Why did lawmakers require tolls in the first place?
The debate is rooted in the growing cost of maintaining and replacing North Carolina’s ferry fleet.
Ferry Division Director Jed Dixon told legislators last year that roughly 70% of the fleet was over 20 years old and that the agency was facing more than $92 million in additional operating, maintenance, and capital needs.
“We’re at the place where the fleet is aging faster than we can service it,” Dixon told lawmakers. “If we don’t get ahead of these needs now, we’ll see more breakdowns, more interruptions, and higher long-term costs.”
The Manns Harbor Shipyard, the division’s main maintenance facility, also faces capacity problems, while dredging, shoreline stabilization, propulsion repairs, and other infrastructure needs continue to grow.
Supporters of expanded tolling have argued that ferry users, including visitors, should contribute toward replacing the vessels they use. Earlier Senate proposals estimated expanded tolling could generate about $6.4 million annually.
Opponents counter that ferries serve as extensions of North Carolina’s highway system in coastal communities, and that charging residents who rely on ferries for work, school, medical appointments and everyday travel is fundamentally different from charging users of an optional toll facility.
Gov. Josh Stein made a similar argument when he signed the budget, calling ferries an essential part of the transportation system for many residents.
How expensive is vessel replacement?
Very.
A state vessel replacement model cited during legislative discussions estimated that maintaining the Ferry Division’s long-term replacement schedule could cost approximately $552 million over the first 20 years and about $1.13 billion over 50 years.
The existing reserves for individual routes fall far short of the cost of a new vessel. Dixon previously told lawmakers that route reserves included approximately $13.3 million for the Ocracoke-mainland routes, $5.7 million for Hatteras-Ocracoke, and $2.65 million for Currituck-Knotts Island, while a new Sound Class vessel was approaching $20 million.
Those figures help explain why lawmakers have sought a recurring source of money dedicated specifically to new ferries, although the planning behind the proposal appears to be lacking.
Where does the new toll money go?
This is an important distinction to keep in mind.
The toll money does not simply become additional money for day-to-day Ferry Division operations.
Revenue from the new tolls and annual passes is directed into the Ferry Capital Special Fund for vessel replacement. The money is not intended to pay ordinary operating expenses such as salaries and fuel.
At the same time, the law authorizes the Ferry Division to use available operating funds to purchase and install the technology and infrastructure required to collect the tolls.
That creates an unusual funding sequence: the Ferry Division must spend money from its operating budget to establish the collection system, but the revenue generated by that system cannot be returned to the operating budget to offset those costs.
Depending on the collection method ultimately selected, implementation could require payment equipment, cameras or toll readers, software modifications, communications infrastructure, traffic-control improvements, and other upfront expenses. A system that relies on staffed collection could also create additional personnel and administrative costs.
Those expenses would arrive at a time when the Ferry Division has already reported significant operating, maintenance, and capital needs.
In practical terms, money spent establishing and administering toll collection is money that is not available for other operating expenses unless the General Assembly provides additional funding.
The result is that tolling may eventually generate millions of dollars for new vessels while simultaneously placing additional pressure on the budget used to operate the existing ferry system.
Didn’t the new budget also give the Ferry Division more money?
Yes.
The 2026 budget included approximately $15 million in nonrecurring funding for immediate ferry needs — about $12 million for operations and fuel and $3 million for maintenance and capital needs.
That money came after a difficult period for the division.
Lawmakers had previously approved a $7 million stopgap package to prevent a proposed 60% statewide service reduction, including money for maintenance and Coast Guard-required dry-dock work.
But temporary operating appropriations and future toll revenue serve different purposes.
The new toll revenue is tied to vessel replacement. The additional budget appropriations help address more immediate operating, fuel, maintenance and capital pressures.
Isn’t the state also auditing the Ferry Division?
Yes.
Gov. Josh Stein signed legislation in July requiring the Office of State Auditor to conduct a comprehensive performance audit of the Ferry Division.
The audit will examine finances, operations, maintenance practices, route structure, scheduling, capital projects and potential new revenue sources. The report is due to lawmakers Jan. 15, 2027.
That timing is notable.
The Ferry Division must begin collecting tolls Jan. 1 — two weeks before the audit is due.
Lawmakers previously said the audit was intended to provide an independent assessment that could help shape future decisions on vessel replacement, service levels, and funding.
But under the current timeline, the state will establish toll rates and implement the new collection system before receiving the independent assessment that lawmakers said could help guide decisions about the Ferry Division’s financial needs.
What is the ferry economic impact survey?
That is a separate process.
The Institute for Transportation Research and Education at N.C. State University is conducting a new economic impact study for the Ferry Division. Separate surveys are available for each ferry route, and responses are being accepted through Dec. 31.
The surveys ask passengers about the purpose of their trips, frequency of ferry use, spending on lodging, restaurants and shopping, wait times, service reliability, ticketing and reservations, and whether they would have made their trip another way without ferry service.
A previous ITRE analysis found the state ferry system supported 5,860 jobs, generated $217.3 million in labor income and produced $735.2 million in statewide economic output.
Again, the timing is unusual: the survey closes Dec. 31, one day before toll collection is required to begin.
Under the current schedule, therefore, both the economic study and the performance audit will be unfinished when the toll mandate takes effect.
Why aren’t lawmakers waiting for the audit and economic study before implementing tolls?
The legislation does not explain why the toll mandate takes effect before two major reviews of the Ferry Division are complete. But it is not the first time in recent years that North Carolina’s General Assembly has considered a major change affecting a coastal industry while a state-ordered study relevant to that industry was nearing completion.
In June 2025, during a controversy that became known along the coast as “Shrimpgate,” the N.C. Senate approved legislation that would have prohibited shrimp trawling in the state’s inshore waters and in the Atlantic Ocean within one-half mile of shore. The restriction was added to a fisheries bill shortly before a years-long N.C. Collaboratory study of the state’s coastal and marine fisheries was due to lawmakers.
The General Assembly had ordered that study in 2021 and directed the Collaboratory to examine the status of North Carolina’s coastal fisheries, including shrimp, and develop recommendations for improving their long-term health and viability. Its final report was due June 30, 2025.
But the Senate acted on the shrimp trawling proposal before that report was available. During the debate, Rep. Maria Cervania publicly pointed to the pending study and argued that lawmakers should wait for its findings before making a final decision.
The House ultimately declined to move forward with the Senate’s shrimp-trawling provision, and the Collaboratory released its report June 30.
The circumstances are not identical to the current ferry toll mandate. But they offer a recent example of the General Assembly moving toward a significant coastal policy change before receiving the results of a study it had previously commissioned.
In the ferry case, the timing is even more clearly defined: tolls are required to begin Jan. 1, while one study closes Dec. 31 and the separate performance audit is not due until Jan. 15.
What can residents weigh in on at the listening sessions?
The law itself already requires tolling, but many implementation details remain under development.
NCDOT says the September sessions are intended to allow affected communities to learn more about the requirement and share their thoughts and concerns with Ferry Division staff as the implementation plan is developed.
That leaves residents with a number of concrete issues to raise.
Among them are how fares should be collected; whether electronic tolling is preferable to staffed booths or kiosks; how the Ocracoke terminal can accommodate new infrastructure; how a system should operate during internet, electrical, or communications outages; how annual passes will be verified; what additional vehicles should qualify for exemptions or special rates; how trailers and oversized vehicles should be charged; and how the new commuter pass should interact with the existing Priority Pass system.
Residents can also raise broader impacts, including commuting costs, access to jobs and health care, effects on businesses and tourism, delivery expenses, and the practical consequences for an island where ferry transportation is part of everyday life.
The listening sessions therefore are not a referendum on whether the existing law requires tolls. They are an opportunity to help shape how the mandate is implemented while many of the details remain unsettled.
When and where are the Hatteras and Ocracoke sessions?
The Hatteras Island listening session will be held Tuesday, Sept. 8, from 6-8 p.m. at the Graveyard of the Atlantic Museum, 59200 Museum Drive in Hatteras.
The Ocracoke listening session will follow Wednesday, Sept. 9, from 6-8 p.m. at Ocracoke School, 120 Schoolhouse Road.
Additional sessions are scheduled Sept. 1 at Beaufort County Community College in Washington, Sept. 2 at Pamlico Community College’s Delamar Center in Grantsboro and Sept. 3 at Knotts Island Elementary School.
What happens after September?
The schedule moves quickly.
After the listening sessions, Ferry Division staff are expected to continue developing the proposed implementation approach.
- On Oct. 8, the division plans to present the Board of Transportation with its proposed tolling methodology and recommended fares.
- On Nov. 5, ferry officials are scheduled to return to seek approval of the tolling policy and rate structure.
- By Dec. 1, NCDOT must report to the General Assembly on the new system.
- The ferry economic impact survey closes Dec. 31.
- Tolls are required to begin Jan. 1, 2027.
- The Ferry Division performance audit is due Jan. 15.
That leaves only a matter of weeks between the fall public-input process, formal approval of the tolling policy and rates, and the legally required start of toll collection.
For Hatteras and Ocracoke residents, the September meetings therefore arrive at a critical point in the process.
The law has already answered the broadest question: unless lawmakers change course, the currently free ferry routes must begin collecting tolls Jan. 1.
Almost everything that will determine what that means in practice — the fare, the payment system, the treatment of different users and vehicles, the annual-pass procedures, the infrastructure and the day-to-day experience of getting across Hatteras Inlet — is still up in the air.