Two-thirds of harbor maintenance tax is supposed to be dedicated for keeping channels from silting up.
More than 400 maritime industry stakeholders, including shippers who depend on ports to move their cargo, have signed a letter to leaders of the House and Senate appropriations committees urging them to meet the funding commitments for dredging made in the Water Resources Reform & Development Act enacted last summer.
The Harbor Maintenance Trust Fund in the last fiscal year received about $1.8 billion in revenues from a tax based on the cargo value of imports and coastal shipments, as well as on cruise passengers, but Congress only appropriated less than $900 million of the amount for channel maintenance. Congress for many years has only allowed half the annual receipts to be used for their intended purpose, with the rest of the money used to mask the size the federal budget deficit. Over time, the HMTF has built up a surplus of more than $8 billion.
That money is unlikely to be returned to the HMTF, but WRRDA created a path to achieve full utilization of annual receipts by 2025.
Under the legislation, which passed both chambers by overwhelming margins, 67 percent of the $1.79 billion collected in fiscal year 2014 is authorized to be spent on harbor maintenance.
The American Association of Port Authorities and the U.S. Chamber of Commerce are drumming up support through a “Hit the HMT Target!” campaign. The goal is for Congress to direct $1.17 billion in the fiscal year 2015 Energy and Water Development and Related Agencies Appropriations Act (E&W) to the Army Corps of Engineers for dredging.
Businesses say maintaining authorized depths and widths of harbor channels is crucial to their bottom lines because otherwise bigger vessels can’t access many ports or have to light load in order to have sufficient draft. Bigger vessels are much more efficient to operate and can keep a lid on transportation costs for shippers.
In July, the House passed an E&W appropriations bill that included the required funding amount, but a Senate appropriations subcommittee report proposes to appropriate $1.075 toward maintenance dredging, or about $100 million less than the target.
The Senate has not yet voted on its version of the E&W bill.
“Harbors and navigation channels are a vital part of our nation’s transportation infrastructure, and the elimination or reduction in their capacity can have significant impacts on local communities and economies,” the “Hit the HMT Target!” letter said. “While addressing increased funding is difficult, the United States should not miss opportunities to spur economic growth, improve our global competitiveness and create jobs.”
Fifty-eight House members have also signed an AAPA-crafted, “Dear Colleague” letter urging House appropriators to work with the Senate on a final appropriations bill that meets WRRDA’s spending targets and allocation provisions. AAPA is also urging senators to sign a similar letter to appropriators in the Senate.
AAPA said the next step in the HMT funding campaign is for shipper groups, port authorities and other organizations to meet with congressional leaders and their staffs to stress the importance of following through on HMT reform.
Under the new distribution formula in WRRDA, 10 percent of appropriations at the fiscal year 2012 baseline of $898 million are set aside for smaller, emerging ports.
The extra $300 million above the baseline would be allocated differently, too: High and moderate-use harbors would get 90 percent of the money and 10 percent would go to smaller harbors. Within that 10 percent there are carve-outs for expanded uses of funds beyond dredging for donor ports, Great Lakes harbors and under-served harbors.
Donor ports are ones that typically don’t require much maintenance dredging because they are naturally deep or aren’t on rivers where silt flows. Under WRRDA, donors are eligible to get money to dredge berths or make other improvements if the port brings in $15 million in HMT revenue and receives less than 25 percent in return.
Businesses groups press Congress to allocate dredging dollars
