Barge industry, Obama administration at odds over inland funding

Inland navigation leaders are disappointed with the Obama administration’s rejection of a waterways development plan and are urging the administration to reconsider its opposition.

In a letter dated Dec. 21, 2010, and recently obtained by WorkBoat, Jo-Ellen Darcy, assistant secretary of the Army (Civil Works), outlined four pages of objections to the plan. She wrote to former Rep. James Oberstar, former chair of the House Transportation and Infrastructure Committee, that the Army Corps of Engineers “has serious concerns with several of the major recommendations” of the plan. The letter was not sent directly to industry.

The Army, she said, does not support the recommendation that nearly all lock rehabilitation work, all construction work for new dams, and all work to replace, modernize, expand or extend existing dams be exempted from the current federal/industry cost-sharing scheme.

“These recommendations would transfer a significant responsibility from [waterways]users to the general taxpayer,” Darcy wrote. “Such a major shift of costs is inconsistent with the user-pay principle that helps to guide Civil Works investment decisions.”

Darcy also said that the Army objects to a proposed 30-45 percent increase in the 20-cent-per-gallon fuel tax that is now paid by the inland industry into the Inland Waterways Trust Fund. The Trust Fund pays for half the costs of navigation construction and the federal government pays the rest. “The Army notes that this level of revenue increase would not be sufficient to support efficient investment in the inland waterways,” she wrote.

The administration, she said, “continues to urge consideration of a funding mechanism that is sufficient to finance capital improvements.” In other words, Obama wants to again push the idea of user fees, which have been rejected by Congress in the past.

In a pointed response dated Jan. 18, the Inland Waterways Users Board, which took the lead in crafting the plan, said that the administration’s criticisms “are breathtaking in their disregard of the value that our system provides to the nation.” And the board noted the irony that it was the Corps of Engineers that had identified serious problems in the current way that waterways projects were funded and managed and fully participated in the process to find a solution.

Steve Little, president of Crounse Corp., Paducah, Ky., and chairman of the IWUB, said the next step depends on whether the administration reconsiders its objections. “We think we have a compelling case. The plan has a lot of merit, and it should be the centerpiece of discussion as it goes forward,” he said.   

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