WASHINGTON — Members of a U.S. House subcommittee yesterday accused the Obama administration of underfunding port and inland waterway projects through its proposed fiscal 2015 budget.
U.S. House members’ criticism of the budget during a hearing reflects the disparity between Obama’s pledge to invest in freight infrastructure and the money the president actually wants to spend to help shippers and transport providers move their goods more efficiently, both domestically and internationally. The administration’s proposal to spend $4.5 billion on capital works projects, which includes flood mitigation work, is a $934 million, or 17 percent, reduction from funding levels in fiscal 2014.
“It is apparent to me that Congress has one vision for the [U.S. Army] Corps of Engineers and the administration has a starkly different one,” said Rep. Mike Simpson, R-Idaho, who chairs the Energy and Water Development Subcommittee. “We hear frequently about the challenges facing our shippers from filled-in channels and locks and dams which are falling apart.”
The corps’ budget for fiscal 2015 also illustrates the Obama administration’s opposition to reforming the harbor maintenance and inland waterway trust funds. The sharp disparity between reforms sought by Congress and Obama’s position is raising concerns about whether the president would sign major water resources development legislation being hashed out by both chambers.
Under Obama’s proposal, the corps would pull the most amount of money from the Harbor Maintenance Trust Fund in three years for dredging and jetty maintenance. But the $915 million that Obama plans to use for the work is far short of the roughly $1.6 billion collected by ports through the 0.125 percent levy on the value of imported cargo. Many ports lack the funding needed to dredge their harbors to federally authorized depths, limiting the ability of some container ports including Mobile, Ala.; Miami; Delaware River; and New York-New Jersey to handle fully loaded ships.
In a statement of policy released in December, the Obama administration raised concerns with Congress’s attempt to allow the Harbor Maintenance Trust Fund to dredge adjacent berths and deal with dredging spoils. The congressional push would give more “equity” to ports like Seattle/Tacoma and Los Angeles-Long Beach that already have naturally deep harbors and kick in far more to the trust fund than they receive back in funding for maintenance dredging.
Under the House bill, known as the Water Resources Reform Development Act, ports would receive at least 80 percent of collected taxes by fiscal 2020. The Senate version, known as the Water Resources Development Act, would require all the collected taxes to go toward the ports. Both chambers passed their respective bills last year, but Senate and House leaders have yet to agree on a final bill to send to Obama.
The corps’ budget also rejects inland waterway shippers and barge operators’ plea to shift the funding burden for the over-budget, long-delayed Olmsted lock and dam project to the federal government, allowing the Inland Water Trust Fund to pay for other much needed projects.
“The budget includes $160 million for Olmsted Locks and Dam, Ill., of which $80 million would be derived from the Inland Waterways Trust Fund,” said Jo-Ellen Darcy, assistant secretary of the Army for Civil Works, who commands the corps, told the subcommittee. “The budget does not support a reduction in the portion of the costs of this project financed from this trust fund.”
The Senate’s WRDA would require Uncle Sam to take on the entire cost of the project, which has ballooned from $775 million to nearly $3.1 billion. That would free up $84.5 million from the trust fund, and with a federal match, would allow the corps to take on $169 million worth of new projects annually. The House version, which shifts less of the onus to the federal government, would still provide other inland waterway projects with about $94 million annually.
The Obama administration has also ignored the inland waterway industry’s plea to increase the trust fund by raising the 20-cent-per-gallon fuel tax by 6 to 9 cents. A 1 cent hike would generate about $4.1 million in construction funding annually, said Waterways Council President and CEO Mike Toohey. Instead, the Obama administration proposes raising $1.1 billion in trust fund revenue over the next 10 years by implementing an annual per vessel fee.
“Under a two-tiered fee system, those who use the locks and dams would pay more of the non-federal share of capital investments, as they should,” Darcy said. “This would increase economic efficiency by requiring the specific users who benefit from these investments to internalize the costs.”
She added that the proposal would also clarify cost-sharing between the trust fund and federal coffers so that a loophole allowing cargo traffic on about 1,000 of miles of inland waterways doesn’t pay the fuels tax.