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  • OTRI.USA
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American Shipper

Oakland port to vote on container tax

Oakland port to vote on container tax

Officials at the Port of Oakland will vote Thursday on a plan to impose a per-container tax similar to two taxes enacted at the Southern California ports earlier this year.

   The seven-member board of port commissioners for the Oakland port, the third-busiest container port in California, are citing a worsening financial situation at the port, a need to raise matching funds to obtain state bond money for port projects, and the lack of local control measures to be included in a statewide container tax moving through the state legislature, as reasons for seeking the $12.50-per-TEU tax on all loaded containers moving through the port. The proposed tax would charge a maximum of $25 per container, regardless of size.

   Port officials did not give a specific date that the proposed per-TEU tax would be implemented, but stated in a pre-vote report to the commission that it would be necessary before July 1, 2009.

   The port also notes that while the container tax would address the three main concerns cited, it could also be used to pay for other port projects, “such as implementation of a truck management program, infrastructure to reduce ship emissions, and infrastructure improvements to reduce congestion and improve efficiency of Port operations.”

   One reason for the worsening financial situation at the port has been a downturn in container volume. The port reported last month that it was facing a deficit next year of more than $18 million, forcing it to consider layoffs of 60 to 70 staff members, or about 10 percent of its workforce.

   In addition, the port has been earmarked to receive $5 million from the state Proposition 1B transportation bond funds for a drayage truck upgrade program, but is required to produce matching funds to obtain the funding. With the port's current financial situation, staff reported to the commissioners that the container tax would make the truck project affordable. And an additional $210 million in matching port funds also need to be raised for a major terminal and rail project at the port. Without the matching funds, the port stands to lose $75 million in state bond funds for the project.

   The port has also been seeking to include local control wording in pending state legislation that would impose a $30-per-TEU tax on containers moving through Oakland and the two Southern California ports for air quality and infrastructure projects throughout the state. The author of the bill, State Sen. Alan Lowenthal, D-Long Beach, is likely to move the bill through the final legislative steps by the end of the month,. But according to the Oakland port, he has not included language that would allow the port to have a say in what projects the collected money would go toward.

   Port staff continues to work with Lowenthal, but told the commissioners that a separate Oakland container tax “would ensure the use of container fee revenues to improve air quality and increase cargo throughput facilities at the port and for the benefit of the port and its surrounding communities.”

   The ports of Long beach and Los Angeles have already implemented two separate per-TEU taxes: a $35 per-TEU tax to pay for a $2.4 billion drayage re-regulation plan, and a $15 per-TEU tax to raise money for Southern California port-area infrastructure projects such as the $850 million Gerald Desmond Bridge replacement. ' Keith Higginbotham

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