Waterways Council, Inc. Reacts to President Obama's Proposal for Inland Waterways Infrastructure Funding

WCI Release
28 September 2011

Arlington, VA – Michael J. Toohey, President and CEO of Waterways Council, Inc. (WCI), issued the following statement today regarding President Obama’s proposed plan to provide additional funding for inland waterways infrastructure:

“While Waterways Council, Inc. and its members applaud President Obama’s call for higher levels to recapitalize our Nation’s lock and dam infrastructure, the Obama plan for collecting the funding may be counter-productive to the Nation’s economy and fails to include the necessary project delivery and other reforms that must be a part of a comprehensive investment strategy for our waterways.

The Administration’s plan, which may be unworkable in its current form, includes a new fee for all operators and a second fee for those transiting locks in addition to the 20-cent-per-gallon tax commercial operators currently pay.

The proposed legislation would more than double the amount of taxes and fees on one beneficiary of our Nation’s waterways, commercial shippers. Currently, commercial users are the only contributors to the Inland Waterways Trust Fund. These new economic burdens will disrupt the fragile economic recovery by unfairly disadvantaging consumers who will surely pay more for their goods and electricity. The proposal also discourages use of our waterways, which provide the most energy-efficient, environmentally sound, traffic congestion-relieving, safest way to transport bulk commodities.

This Administration initiative also discriminates against shippers and industries that locate along waterways served by locks and dams, de-leveling the competitive playing field. We urge Congress to not delegate to the Secretary of the Army the unfettered discretion to impose fees on one beneficiary in any amount at any time as one unelected official sees fit. Congress has never delegated the power to tax to the Executive Branch, and we urge our elected officials to continue this precedent.

The waterways industry and its stakeholders continue to support all elements of the Inland Waterways Capital Development Plan, which calls for Corps of Engineers’ project cost-escalation reform, cost-sharing changes, project prioritization, and a user-financed fuel tax increase of 6-to-9-cents per gallon on the commercial sector’s current fuel tax. It also lays out a plan for the efficient completion of more than 20 navigation projects over 20 years by American workers in family-wage jobs rather than just six projects in the same timeframe under the current broken construction management model. It would also optimize taxpayer investment by completing projects on time and on budget.

Modernizing our Nation’s waterways transportation system in a way that is fair and equitable to our farmers and shippers will result in the creation of American jobs, increased exports, and billions of dollars injected into the lagging U.S. economy.

The President recognized in his American Jobs Act the importance of investment in inland waterways. WCI stands ready to work further with the Administration and Congress for a comprehensive capital investment strategy for our Nation’s inland waterways system.”

Key elements of the Obama Plan are:

Plan proposed raising $1.1 billion over 10 years to build and repair locks and dams.
Includes a two-tier fee that would augment the current 20-cent-per-gallon diesel fuel tax paid by operators
General Treasury funds would continue to match the amount of tax paid by commercial users, which would raise the amount invested in the inland waterways to $380-400 million a year, up from the current $160 million.
The first tier of the Obama proposal would be levied on all commercial users of the waterways. The second tier would be paid only by vessels transiting locks, essentially a lockage fee. The Secretary of the Army would arbitrate the fees annually.

WCI continues to support the Capital Development Plan, which also calls for raising the level of annual funding for navigation projects to around $380 million, but does so through a 6-to-9-cent increase to the existing fuel tax, removes dams from Trust Fund-financed projects recognizing the multiple beneficiaries of the lock and dam system, prioritizes projects, and puts reforms on the Corps of Engineers’ for cost over-runs such as at Olmsted.