Rick Calhoun sees the inland waterways infrastructure crisis from the perspective of both shipper and carrier. He is president of Cargill Carriers, a barge operator and also a subsidiary of the $3.3 billion, privately held worldwide trader in commodities ranging from grain to processed food to steel. Cargill ranked seventh this year in The Journal of Commerce Top 100 exporters list.
“We use all modes of transportation. We’re one of the largest rail shippers around,” not to mention shipping by road and water, Calhoun said.
As the outgoing chairman of the Waterways Council, an advocacy group of some 250 inland carriers, shippers, ports and related groups, Calhoun understands the dire need for repairing and replacing locks and dams on the inland waterways system. Some structures are 100 years old, and many more were built during the Great Depression.
Cargill Carriers operates some 1,300 barges on the inland waterways system, less than 15 percent of the country’s barge fleet.
“We feel pretty strongly that the waterways have a place in the transportation infrastructure, as do highways and rail,” Calhoun said. “We talk about planes, trains and automobiles, but waterways have been left out of the discussion.”
There’s no question the system needs urgent attention, but when it comes to funding, the uphill battle for waterways infrastructure funding mirrors ones other groups are fighting, seeking funding for landside transportation infrastructure projects.
The Army Corps of Engineers this year is asking for $1.48 billion for construction, repair and replacement of locks and dams, but it has a backlog of some $80 billion in projects authorized by Congress but not funded.
Two years ago, the corps and the Inland Waterways Users Board, an advisory council composed of barge companies, developed the Capital Development Plan, offering a solution that would prioritize and fund infrastructure projects over the next 20 years.
Until Sept. 19, the development plan was the only proposal out there. Then President Obama offered a deficit-reduction plan suggesting a combination of fuel tax increases and user fees to add $1.1 billion to waterways infrastructure improvement over the next 10 years.
So far, Congress has been cool to both ideas. The Waterways Council supports a 9-cent increase in fuel taxes to bolster the Inland Waterways Trust Fund, but Republican lawmakers will resist any tax increase. The capital improvement plan also proposes additional expenditures from general revenue, something unpleasing to representatives of both parties.
The president’s user fee proposal takes up only a few lines of a 67-page deficit-reduction plan. The lack of detail has led to “massive speculation,” according to Alex Herrgott, director of transportation and infrastructure for the U.S. Chamber of Commerce.
Herrgott said the government would only collect fees from about half of all inland waterways users — the carriers that transit the lock system. Somehow all others should share the burden. The congressional “super committee,” tasked with finding ways to reduce the country’s $1.5 trillion deficit, may shed light on the issue, if they approve revenue increases for transportation infrastructure. The committee must report no later than Nov. 23.
“We’re pleased that the president is putting out his ideas, but we differ on what we consider a fair share,” Calhoun said. “We’re happy to move the discussion forward in a positive manner.”
Mike Toohey, Waterways Council president, calls the president’s proposal a marker for negotiation. It’s easier to propose a user fee than a tax increase. If Congress shows bipartisan support, the administration may be willing to propose a tax increase, which would be easier to collect through existing channels than a fee that would require new collection apparatus.
“It’s a tricky issue. I recognize that a lot of members are firmly entrenched in the ‘no new taxes’ pledge, even when we say we want it,” Toohey said. “It’s going to be up to Congress.”
Toohey believes the House Transportation and Infrastructure Committee may begin debating a new surface transportation bill this fall, and waterways would be part of that discussion. “There’s an opportunity for talking about the Capital Development Plan. There is a maritime title under the jurisdiction of the water subcommittee.”
The Waterways Council stands behind the Capital Development Plan, but Toohey cautions it’s about more than revenue. The plan also calls for more corps accountability in spending on and delivering projects.
“We’re talking about a package of reforms, cost-sharing, project delivery, and prioritization of projects,” Toohey said. “Then we talk about the revenue component. We’re urging the Super Committee and the committees of jurisdiction that if they’re going to act, act comprehensively, not just on the revenue.”
Contact R.G. Edmonson at email@example.com.