Repulsive Lockage-Fee Proposals Linger

The Waterways Journal - Editorial
20 April 2009

The idea of lockage fees as a way to bolster federal income, which supposedly would be directed toward better waterways, is as old as grass. So are the arguments against it. The Office of Management and Budget (OMB) has been sowing the seeds for decades. And for decades, towing industry stakeholders have been trying (almost in vain) to get the point across that the method is unfair and won’t work. So far, no fees have made it past go, but not because proponents (including OMB) haven’t tried.

As could have been expected, when President Obama’s budget proposal for fiscal year 2010 was released, OMB included a proposal to phase out the current inland waterways excise tax (a 20-cent-per-gallon tax on fuel) and replace it with a lock usage tax. Since then, 10 senators, led by Tom Harkin (D-Iowa) and Charles Grassley (R-Iowa), sent a letter to OMB Director Peter Orszag requesting that OMB reconsider including lockage fees as part of the fiscal 2010 budget proposal. Other signers of the letter included: Mary Landrieu (D-La.), Sherrod Brown (D-Ohio), Christopher Bond (R-Mo.), Arlen Specter (R-Pa.), Jim Bunning (R-Ky.), Roland Burris (D-Ill.), James Inhofe (R-Okla.) and Tom Coburn (R-Okla.).

The writers informed Orszag that while the Inland Waterways Trust Fund is running out of money due to high demands upon it, they are examining possible methods to overcome the expected shortfall in funding and to improve the efficiency of construction. The senators’ letter, which was reprinted in the American Waterways Operators newsletter of April 13, said industry is working with the Inland Waterways User Board and the U.S. Army Corps of Engineers to find a solution to the problem.

The senators reminded the OMB director that lockage fees have been proposed before and have been rejected by Congress in the past. They said they would expect a similar result if it were to be proposed in the future. “Simply put,” they wrote, “funding the Inland Waterways Trust Fund by increasing [sic] lockage fees is unfair and unbalanced. It discriminates against the portions of the country that depend on large numbers of locks to move cargo, while giving a free pass to commercial vessels that operate in areas of the country without locks. The Corps…does considerable work along portions of rivers without locks to maintain navigation. To expect only those portions of the rivers with locks to pay for that construction is inappropriate.”

There are other reasons, too, why the lockage fee scheme and how it would be applied are inappropriate. The 12,000-plus miles of navigable waterways in the United States are an infrastructure benefit that supports the nation’s effort to import and export goods. Railroads and truck lines also benefit greatly from waterways via intermodalism. Perhaps if the government looked upon it in that light, they would find more acceptable ways to finance maintenance and modernization.

As we have reported in the past, the federal government’s own records confirm that water transportation (all phases) contribute upwards of $15 billion to $16 billion annually to federal coffers through various duties. Roughly a third of this supports waterways via the Corps budget, which for decades has been lower than necessary to maintain and improve waterways. The rest goes into the general fund.

Still kicking around in the wings is an $11 billion plan to restore the Everglades in Florida. We don’t quarrel with the plan, but we do wonder why it is so easy to authorize that amount of money for the Everglades when authorizing and appropriating not much more than that for maintaining and modernizing the Upper Mississippi and Illinois Waterway is such an overwhelming task. Presently we are watching funds slip away from the federal treasury by the trillions.

We suggest that the inland waterways are a national treasure, and that we fall heir to untold benefits because of them. Should they not get their rightful due without bare-knuckle sessions every year? Without the inland waterways, the export of agricultural products would be much altered for us, not to mention the numerous products that cannot be moved efficiently and inexpensively via any other mode.
We hope OMD pays attention.