As the state Legislature convened on Monday to tackle its most difficult budget in decades, state lawmakers and ferry advocates prepared to challenge Gov. Chris Gregoire’s latest proposal to bail out the struggling ferry system.

Gregoire introduced a plan on Thursday that would transfer control of the largest ferry system in the nation to a regional ferry district with local taxing authority.

Under the plan, which Gregoire outlined at a press conference in Olympia, ferry-dependent communities would elect representatives to a regional board, which would govern the system. The district would be funded by fares and state subsidies that would provide an undetermined core level of service, but local taxes would provide what Gregoire called the “critical third leg to the stool.”

“It’s up to them to say whether they want to contribute more to their taxing authority to get that level of service they want,” she said.

The Puget Sound Regional Ferry District, as Gregoire dubbed it, would include all of San Juan, Island, Jefferson, Clallam and Kitsap counties and parts of King, Skagit, Snohomish and Pierce counties.

Gregoire said she believed ferry-dependent communities would welcome the idea of a regional ferry district because it would give them more control over their service.

So far, though, that doesn’t seem to be the case.

Sen. Sharon Nelson (D-Maury Island) said she participated in a conference call on Thursday with other lawmakers from ferry-served communities, and all expressed serious concerns about the governor’s plan. All of them, she said, think the state should continue to support the ferries, which are considered part of the state highway system, rather than transferring responsibility to local governments that are also struggling.

“The state is already stressed, but it’s our responsibility,” she said.

King County Council-member Joe McDermott, newly elected to represent Vashon on the nine-member council, said he, too, has concerns.

Taxing ferry communities, especially during tough economic times, strikes him as a bad idea, he said.

“The idea to create local taxing districts and create more taxes I’m not sure is the best approach,” he said. “We certainly need money in the ferry system, and there’s no easy answer, but I want to keep looking.”

Ferry advocates on Vashon also took aim at the proposal, saying they see it as an effort on Gregoire’s part to foist an underfunded system onto the counties.

Kari Ulatoski, who chairs the Island’s Transportation Committee, said she was shocked by the governor’s proposal and believes others are as well.

“I’m a little stunned. … I don’t think anybody had an inkling the governor was going to propose something like this,” she said.

Ulatoski said that if the governor considers the ferry system to be part of the state highway system, it should be funded by the entire state instead of double-taxing those in ferry-dependent communities.

“Why are those communities singled out?” she asked. “Doesn’t the whole state benefit?”

Greg Beardsley, chair of Vashon’s Ferry Advisory Committee, said that Gregoire’s proposed ferry district is similar to the model used in British Columbia. And while he liked the idea of local communities having a voice on a ferry board, he agreed with Ulatoski that local taxing to fund service would be unfair, especially considering that riders already pay to use the ferries.

“The ferry users are getting the short shift,” he said.

Ulatoski said the Transportation Committee and Ferry Advisory Committee will continue to collect signatures on a petition to oppose the proposed ferry cuts, and will discuss their response to the governor’s proposal at their next meeting.

“That will be at the top of the discussion: How do we want to change our strategy,” she said.

For months, Gregoire’s top ferry official David Moseley has been visiting ferry-dependent communities, noting that the state system is in dire financial shape — a situation that started in 1999, when voters repealed the Motor Vehicle Excise Tax. Despite slashing the system’s budget and seeking larger subsidies from the state’s operating budget, the system faces a projected $900 million shortfall over the next 10 years.

Gregoire, at her news conference, said she crafted the proposal after a study by the Passenger Vessel Association, a national organization of passenger vessel owners and operators, showed that a patchwork system of recommended cuts and changes would still not bail out the ferry system.

The report also determined that privatizing ferry service was not viable.

“If we privatize, … those who purchase it to make a profit would raise fares so dramatically that it would shut it down,” she said.

She said the Legislature will still consider service reductions and fare increases to close the ferry funding gap in the 2011-2013 budget. Meanwhile, she plans to introduce legislation at the start of the next legislative biennium this month to create the new ferry district, hoping to have it in place as early as 2013.

“There are no more Band-Aids. … Once we get through the 11-13 budget, we will be in the red forever if we don’t take action this legislative session,” she said.

The Transportation Committee will meet at 7 p.m. Thursday, Jan. 13, at the Chamber of Commerce’s office. On the agenda will be the governor’s proposal.