Obama proposes user fees to boost waterways spending

The Obama administration has weighed in with a plan to pump much needed capital into the nation’s crumbling inland infrastructure.

The proposal is part of the president’s deficit-reduction package that will be considered by congressional committees. The proposal’s funding mechanism, however, is opposed by the inland waterways industry: charging fees to use the nation’s waterways and navigational locks.

Called the “Inland Waterways Capital Investment Act,” the plan would set up a two-tier fee system. There would be one fee for vessels that operate on portions of the inland system that do not involve passage through a lock. There would be a higher fee for “vessels that are eligible to use the locks.”

These fees would supplement the 20-cent-per-gallon diesel tax that the inland barge industry now pays to cover its share of inland construction projects through the Inland Waterways Trust Fund.

Revenue from new fees would be placed in the trust fund along with the diesel tax receipts. Trust fund balances have been declining in recent years due to increased payouts for water projects and a dip in tax revenue due to the recession. The federal government matches the industry contribution in a 50-50 cost-sharing arrangement.

The amount of the fees and how they will collected will be decided later by the U.S. Army Corps of Engineers, which oversees inland navigation construction, operation and maintenance. The administration projects revenues of $1.1 billion over 10 years.

Congress must now consider this proposal, as well as another capital development plan prepared by a joint federal-industry group. That plan does not envision user fees, but a 6-to-9-cents increase in the diesel fuel tax as a way of recapitalizing the trust fund.

The Waterways Council, which is lobbying for the diesel fuel increase plan, was briefed on the proposal on Friday. “We find this a positive move by the administration because it recognizes the need for increased spending on the waterways,” Mike Toohey, WCI president and CEO, told WorkBoat.

But he added that the barge industry has never endorsed previous user fee concepts and will continue to lobby Congress for an increase in diesel fuel tax, which he says is far more equitable.

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