Waterways group rejects ‘recycled’ user fee proposed in Trump budget

Calling it “swamp behavior,” the Waterways Council Inc. is urging Congress to reject a 10-year, $1 billion user fee proposed by the Trump administration that would be slapped on commercial users of the inland waterway system.

The group, which advocates for modernization and upkeep of the nation’s aging locks and dams, said the proposal would double the 29-cent per gallon diesel fuel tax that barge operators currently pay to support infrastructure improvements. The fuel tax was raised from 20-cents per gallon in 2015.

The user fee is part of the fiscal 2018 federal budget plan for the U.S. Army Corps of Engineers that was sent to Congress on May 25.

“How can this administration ask commercial users to double their support for the inland waterways when the administration proposes to utilize only 12.3% of the revenues for the purposes for which the tax is raised,” asked Michael Toohey, WCI’s president and CEO. “We once again call on Congress to reject this onerous tax increase and leave it in the swamp.”

About 400 barge operators pay fuel taxes into the Inland Waterways Trust Fund that finances half the cost of lock and dam improvements. Uncle Sam pays the rest, plus the costs of operating and maintaining the infrastructure.

User fees are a perennial revenue-raising favorite of previous administrations in looking for ways to fund the Corps budget. Each time, including the last year of the Obama administration, they have been rejected by Congress.

Toohey said it was unfair and unworkable to charge only one user of the waterways — commercial barge operators — a toll when there are many other beneficiaries. These include hydroelectric plants, the federal government (the space shuttle, for example, is moved on the waterways from the manufacturer in Alabama), municipal water agencies and recreational users.

A recent analysis by WCI of the impact of placing a toll at one inland lock concluded that the rate of return would be prohibitive, Toohey said. Additional fees would drive commodity traffic off the rivers, and the paying operator would not recoup his investment.

Toohey said that funding for waterways projects has enjoyed “a very positive trend” in recent years, showing a commitment by Congress to support the Corps’ construction program. “But it’s not so with this administration, which is a surprise given their emphasis on infrastructure.”

The Trump budget proposes $5.02 billion for the Corps’ Civil Works program, an increase over what Obama had proposed last year, but $1 billion below the $6 billion appropriated by Congress. For inland waterways capital projects, the budget would fund only the Olmsted lock and dam on the Ohio River, leaving a $243 million balance in the fund by the end of the year, WCI said.

As evidenced by the Trump budget plan, the waterways will likely face the same budget scenario again this year as in years past when the president low-balls a budget figure and Congress rescues the program with higher funding levels.

Toohey said that career budget officials at the Office of Management and the Budget still seem to be influencing this pattern by not fully supporting waterways infrastructure spending.

The group “seeks full use spending of the trust fund revenues for the many capital needs on the inland waterways and this budget request represents bare use spending,” Toohey said. “Under this proposal, workers at three priority navigation projects — the Lower Monongahela Lock and Dam project (near Pittsburgh, Pa.), Kentucky Lock and Dam (near Paducah, Ky.) and Chickamauga (near Chattanooga, Tenn.) — will be laid off with additional costs incurred from shutting these ongoing projects down.”

There’s one bright spot in the budget: the highest-ever recommendation of $3.1 billion for operating and maintaining inland locks and dams, Toohey added.

Also discussed at the press conference:

  • There has been an increasing pattern of unscheduled lock closures throughout the inland system, and “this is a major concern” to efficiency of river transport, Toohey said. Corps of Engineers data is 3-4 years behind, he said, so this assessment is based on information passed on from barge operators.
  • The average age of nation’s locks and dams is 59 years old, with the average life expectancy of a lock being 50 years. Thirty-nine locks are now operating, some with great difficulty, far beyond their design life.
  • WCI has urged the White House to include waterways improvements in the $1 Trillion infrastructure package that the Trump administration is now crafting. This would include $8.7 billion to be spent on a backlog of 24 priority modernization projects over 10 years rather than the current projection of 20 years, and a temporary cost-share change from the current 50 percent industry through the diesel tax and 50 percent federal, to 25 percent industry and 75 percent federal. “There’s been no reaction yet,” Toohey said, adding that the $8.7 billion proposal is “not much” compared to the nearly $45 billion request for highways.

About the author

Pamela Glass

Pamela Glass is the Washington, D.C., correspondent for WorkBoat. She reports on the decisions and deliberations of congressional committees and federal agencies that affect the maritime industry, including the Coast Guard, U.S. Maritime Administration and U.S. Army Corps of Engineers. Prior to coming to WorkBoat, she covered coastal, oceans and maritime industry news for 15 years for newspapers in coastal areas of Massachusetts and Michigan for Ottaway News Service, a division of the Dow Jones Company. She began her newspaper career at the New Bedford (Mass.) Standard-Times. A native of Massachusetts, she is a 1978 graduate of Wesleyan University (Conn.). She currently resides in Potomac, Md.

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