Inland waterways shippers and barge companies welcome the prospect of freeing up Inland Waterways Trust Fund dollars for projects other than the problem-plagued, over-budget Olmsted Lock and Dam project. But they’re also keen to pay more in fuel taxes so the U.S. Army Corps of Engineers can better maintain and modernize the nation’s lock and dam system.
The catch is that they need the House Ways and Means Committee to allow them to raise the current tax of 20 cents a gallon by 6 to 9 cents. The committee needs to get on board with the tax hike for it to be included in the House’s Water Resources Reform and Development Act. A 1-cent hike would generate about $4.1 million in construction funding annually, said Mike Toohey, president and CEO of the Waterways Council.
The time might be right for some legislators to vote for the fuel fee increase, even if they risk being portrayed as tax raisers by proponents. Numerous agriculture and business groups, including the U.S. Chamber of Commerce and the National Association of Manufacturers, support the tax increase, giving legislators some political cover.
Low water levels on the Mississippi continue to endanger the efficient transport of commodities ranging from agriculture exports to fertilizers. Grain exporters also are expected to benefit from the economies of scale gained through shipping via post-Panamax vessels, but they need good inland waterway connections to capitalize on the Panama Canal expansion, Toohey said. Increasingly inadequate waterway drafts, meanwhile, are hurting companies such as Nucor, a major steel manufacturer and recycler. “For every 1-inch decrease in draft, you lose 17 tons of cargo on a barge,” Rob Roberson, Nucor Steel Berkeley’s material and logistics manager, told Congress this month. “This forces companies like ours to use more costly alternatives.”
Those costlier alternatives — truck and rail — can erode U.S. exporters’ global competitive edge. House Transportation and Infrastructure Chair Bill Shuster, R-Pa., is fond of reminding fellow members that the nation’s inland waterways allow soybean exports to ship from Davenport, Iowa, to Shanghai for 40 percent less than it costs Brazilian exporters. The question is whether Shuster’s colleagues will have the political courage to keep that edge.