The crafting of long-delayed federal legislation key to authorizing U.S. port projects features some familiar elements: a bipartisan Senate effort, a push to streamline projects and, of course, severe funding challenges.
Add some partisan rhetoric to the creation of the long-delayed Water Resources Development Act and you have the makings of a sequel to the recently passed $105 billion surface transportation bill. Fortunately, signs of infighting were noticeably absent from the first full Senate committee hearing on WRDA, which was last passed in 2007.
Even more encouraging for shipping interests, the focus at the Sept. 20 hearing was on streamlining the Army Corps of Engineers’ project review process so projects, particularly the deepening of East Coast harbors, can be completed faster. The effort to cut bureaucracy to promote economic development fits into broader pushes by Congress and President Obama, who fast-tracked seven large East Coast port projects in late July.
“Some studies have stalled for many years and are not advancing because of technical or policy conflicts among reviewers, the study teams and the project sponsor,” Jerry Bridges, chairman of the American Association of Port Authorities, told the Senate Environment and Public Works Committee.
Keeping the corps oversight but shifting more study responsibilities to port authorities, along with the removal of external peer review, would speed project approval, said Dave Sanford, the AAPA’s director of navigation policy and legislation. Project studies now take six to 10 years, while the Port of Oakland’s feasibility study for a 50-foot dredging project took about 2 ½ years in the late 1990s.
The AAPA also wants the federal government to pay a larger share of projects to dredge waterways to 55 feet or more, because the need for deeper channels to handle larger vessels has made the old formula outdated.
Getting port proponents’ other two major platforms — authorizing projects and boosting funding — into WRDA will be much harder. Whereas Congress’s ban on earmarks made striking compromises in the surface transportation bill more complicated, the absence of the vehicle leaves both chambers without a means to authorize projects.
Sen. Barbara Boxer, D-Calif., hinted during the hearing that a standard for authorization should be adopted. Congress could determine which projects should be authorized by using the corps’ cost-benefit analysis and following the White House’s guide that projects should have at least a 3-to-1 ratio. Although port funding is granted separately through the annual appropriations process, WRDA sets the stage regarding which project will get the dollars. The big question is whether lawmakers will back WRDA if their port projects aren’t prioritized.
Reforming the Harbor Maintenance Trust Fund, the main engine of dredging funding, likely will make creating a project prioritization standard easy. Despite growing momentum for reform, attempts to ensure 100 percent of the Harbor Maintenance Tax, a charge on imported cargo, goes to port projects, and not plugging budget gaps, have been watered down. Instead of including proposed language that would have slapped the hands of would-be trust fund siphoners, the surface transportation bill only has language suggesting the tax should be used solely for maritime projects.
About $700 million annually is diverted from the HMTF, and ports’ maintenance and expansion needs would be covered if the $1.5 billion collected annually were spent just on ports. Boxer, who chairs the EPW committee, said reforming the HMTF, which is expected to have a nearly $7 billion surplus by fiscal 2013, is “definitely something we want to do.”
That reform is needed, according to a recent American Society of Civil Engineers report. The U.S. needs to spend about $30 billion more by 2030 and another $62 billion by 2040 to allow East Coast ports to handle the large ships able to transit the expanded Panama Canal and cope with inland waterways growth. Lacking those investments, the U.S. will lose out on some $270 billion in exports by 2010 and nearly $2 trillion in exports by 2040, according to the report.
To reform the HMTF, “Congress would have to ask (President Obama) to request that all the money is used for (port projects), and the administration would have to reduce the other areas where HMT is diverted to,” Sanford said. Just as a deal to avert the looming $120 billion federal sequestration could produce a fuel tax hike, a compromise also could bring the needed HMTF reform.
For now, the focus is on whether Boxer and Sen. James Inhofe, R-Okla., the ranking committee member, succeed in marking up the legislation during the lame duck session following the Nov. 6 elections.
Momentum on the Senate side could spur the House to follow suit, giving Congress a shot at passing WRDA by the end of the year.