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Inland Shippers Would Face
New Fees Under Trump Plan

by Ariel Wittenberg
E&E News, February 12, 2018

"Commercial operators and shippers are the only ones who will be expected to pay, and significantly more,
for the nation's waterways transportation system, despite being just one beneficiary of the lock and dam system."

Steve Petrie, Oregon State University Columbia Basin Agricultural Research Center director, asks questions while standing in a 'dewatered' navigation lock with Little Goose Dam chief of maintenance Jim Simonsen March 14. The Trump administration is asking Congress to reform how it pays for infrastructure improvements on the nation's waterways.

The administration's fiscal 2019 budget request released today proposes charging an annual per-vessel fee for commercial users of the nation's inland waterways, which are managed by the Army Corps of Engineers.

The fee would be used to help finance future capital investments on waterways and help pay to operate and maintain them.

Barge owners are responsible for paying 50 percent of the cost for most inland waterways capital investments under current law, with the exception of the Olmsted Locks and Dam project. The General Fund, funded by the government, generates the other 50 percent of capital investments, plus operation and maintenance costs.

To pay for their share, inland waterway users are subject to a diesel fuel tax of 29 cents per gallon. That tax was raised from 20 cents in 2014 at the request of carriers and shippers, which wanted increased investment in the system.

The Trump administration says that tax "will not generate enough revenue to support the user-financed 50 percent share of the capital investments that will be needed over the next 10 to 15 years."

The administration wants Congress to levy a fee that would raise just over $1.7 billion over the next 10 years and that would finance the industry's 50 percent share of capital investments as well as 10 percent of operation and maintenance costs.

The proposal is meant to complement President Trump's infrastructure investment plan, also unveiled today, which seeks to use federal funding to leverage private investments in infrastructure (Greenwire, Feb. 12).

"The budget does this by focusing federal investment where it is most warranted and proposing reforms to provide states and communities greater flexibility to make the investments they deem priorities," the budget blueprint states.

Indeed, as the Trump administration asks inland waterway users to pay more, it is simultaneously proposing reducing the Harbor Maintenance Fee in order to encourage ports to fund more of their own infrastructure needs.

"By reducing the tax burden on users of ports, ports would have greater flexibility to determine appropriate fees for services they provide in order to help finance their operations," the budget proposal says.

Edward Belk, chief of civil works programs integration at the Army Corps, said at a press conference that the agency is not yet proposing specific figures for either the inland waterway users fee or the harbor trust fund tax reduction, saying, "At this point, the proposal is in play."

"Details have not been worked out with Congress," he said. "The administration wants to generate additional revenue, but the details have yet to be negotiated."

Mike Toohey, president of industry trade group the Waterways Council, decried the proposal. He said it contradicts remarks Trump made when he visited the Ohio River in June and said industry and government would fix the nation's infrastructure together.

Toohey said the budget proposal, coupled with the administration's infrastructure plan, means that "commercial operators and shippers are the only ones who will be expected to pay, and significantly more, for the nation's waterways transportation system, despite being just one beneficiary of the lock and dam system."

Noting that many American industries depend on carriers and shippers to bring their goods from the nation's heartland to its ports for export, he said, "This would negatively affect our agriculture trade balance, increase traffic congestion on our highways and railways, and impact our environment."

The administration is also doubling down on its proposal from last year to use just $965 million from the Harbor Maintenance Trust Fund, which had a $9 billion balance in fiscal 2018. Lawmakers last year criticized that proposal.

This year, Deputy Assistant Secretary of the Army for Civil Works Ryan Fisher repeated the same argument he made last year that the $965 million request represents the "highest amount ever budgeted" for harbor maintenance.

A focus on completing 'ongoing priority projects'

Overall, the Trump administration is requesting $4.6 billion for the Army Corps of Engineers' civil works program, a more than 20 percent decrease from 2017 enacted levels.

That funding is focused on operation and maintenance costs, and the administration is not proposing starting any new construction projects.

Doing so, the administration wrote, "allows the Corps to focus on completing these ongoing priority projects faster for less cost, allowing the affected communities to see their benefits sooner."

For example, the budget proposal would accelerate repairs of the Herbert Hoover Dike around Florida's Lake Okeechobee in the Everglades. The administration is requesting $96 million for that project.

Overall, the administration is requesting funding for 26 construction projects and programs, including 12 flood risk management projects, seven commercial navigation projects and seven aquatic ecosystem restoration projects. Of those, the Olmsted Locks and Dam would be funded to completion, and the South Florida Ecosystem Restoration program, which includes Everglades restoration, would receive $68 million.

The proposal also requests $200 million for the Army Corps' regulatory program, which, among other things, will be working with U.S. EPA to rewrite the Waters of the U.S. regulation this year.

The administration is requesting $1.491 billion for flood risk management, including $431 million for dam safety projects, which would help "reduce the risk of loss of life and property damage from riverine and coastal flooding, and increase the resiliency of local communities through structural and non-structural measures."

Related Pages: Columbia, Snake Rivers Lock and Dam Closures Begin in March by Staff, WorkBoat, 2/18/18
Corps Stresses Maintenance Needs on Columbia-Snake Locks by Matthew Weaver, Capital Press 4/12/13
Opening of Lower Monumental Dam Lock Pushed Back by Staff, Walla Walla Union Bulletin, 3/14/11

Ariel Wittenberg
Inland Shippers Would Face New Fees Under Trump Plan
E&E News, February 12, 2018

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