INLAND WATERWAY OPERATORS, CONGRESSMEN OPPOSE TAX PROPOSAL

INLAND WATERWAY OPERATORS, CONGRESSMEN OPPOSE TAX PROPOSAL    The nation’s barge and towing operators and many congressional members oppose President Bush’s proposal to further tax the inland waterway industry in fiscal year 2004.
   The administration’s fiscal year 2004 budget request proposes to assess between 25 and 50 percent of the Inland Waterways Trust Fund to cover not only the currently mandated costs of new capital improvements, but also the costs to operate and maintain the country’s waterways.
   The House Transportation and Infrastructure said it does not support the use of Inland Waterways and Harbor Maintenance Trust Funds “when currently authorized waterways construction and harbor maintenance needs are not being met.”
   The transportation industry pays more than $100 million a year into the Inland Waterway Trust Fund through a fuel tax of 20 cents per gallon. These funds, after being matched by general revenue funds from the federal government, have been dedicated by law to underwrite the cost to construct locks and dams on the inland waterway system. However, more than $400 million in inland trust fund receipts have been allowed to accumulate and remain unspent.
   “There are indeed large surpluses in these funds that should be spent,” said Rep. John Duncan Jr., R-Tenn., chairman of the House Water Resources and Environmental Subcommittee. “However, these funds should be spent on the original purpose for which these fees were collected.”
   “The users of ports and waterways have paid these fees in good faith for harbor maintenance and for improvements to waterways,” Duncan added. “It is wrong for the administration to now suggest that the money should be used for other purposes.”
   “The budget proposal to fund a portion of operation and maintenance would eliminate the balance in the fund and create a deficit in about three years,” said Rep. Jerry Costello, D-Ill., ranking minority member of the House Water Resources and Environmental Subcommittee. “After that we would either need to reduce federal investment in the inland waterway system or raise the fuel tax that constitutes the trust fund. Either option would have disastrous effects on the economy of my district and the nation.”
   Waterways Work!, an industry-led campaign to promote the economic contributions of U.S. inland waterways, also opposes the proposed tax increase.
   “The industry is gratified to see that a key congressional committee and members of Congress recognize that this misguided proposal could have a serious impact on a vital transportation sector at a time when the economy is struggling to recover,” said Dennis Kirwin, president of Waterways Work!
   Congress has defeated two similar tax proposals. “We hope to see that action again,” Kirwin said.
   The nation’s barge and towing industry, which uses the waterways to transport large volumes of bulk commodities, such as coal, grain, petroleum and chemicals, is valued at more than $31 billion a year. Waterways Work! estimates that waterway transport saves shippers more than $7 billion a year compared to other transport modes.