The Port of Los Angeles plans to take advantage of changes made to a tax aimed at maintaining harbor depths by using it to fund upgrades needed to accommodate the port’s growing cargo and cruise ship business.
Testifying Tuesday at a subcommittee of the House Transportation and Infrastructure Committee, Port of Los Angeles Executive Director Gene Seroka said that the historical defined uses of the Harbor Maintenance Trust Fund (HMTF) prevented the port from accessing those monies – even though the port was the largest revenue generator for the tax.
“This is how we came to be known as an HMTF ‘donor port,’” Seroka said of the nation’s largest container port. “By way of example, in 2018 and 2019, the Port of Los Angeles accounted for $224.5 million and $206.6 million of HMTF revenue, respectively, but received less than 3% in return per year.”
That’s because until reforms were made to the HMTF in the 2020 Water Resources Development Act (WRDA) – signed by President Trump late last year – expenditures from the fund were limited to the maintenance dredging of navigation channels. “For ports that require frequent dredging to maintain their dimensions this has been critical,” Seroka said, but ports such as Los Angeles that do not require such regular dredging lose out on funding that could go to other port maintenance requirements.
Seroka testified that the Port of LA will take advantage of the new expanded use provisions included in WRDA for:
- Repairing damaged concrete wharfs at the port’s seven container terminals.
- Replacing deteriorated berthing structures at the port’s five marine oil terminals.
- Replacing and seismically upgrading dry bulk terminals, cruise ship and ferry ship facilities.
- Environmental remediation of legacy sites, while also maintaining the authorized depth of the entire Port of Los Angeles complex.
Seroka told lawmakers that while the new HMTF financing method takes effect on Oct. 1, 2022, “it is imperative that Congress develop the fiscal year 2023 appropriations to include direction to implement the WRDA 2020 HMTF distribution approach,” he said. “Without this directive language, I am concerned that the implementation could be delayed until fiscal year 2024, resulting in postponement of planned port maintenance repairs.”
With record container imports combined with a reduction in workforce due to the pandemic to produce record congestion levels at the port, Seroka also used the opportunity to underscore steps that lawmakers and the Biden administration can take to address the surge.
“We must vaccinate all of our port workers,” he said. “There are about 100,000 folks that come to work at this port complex every day, and we’ve only begun to scratch the surface.”
In addition, he said, importers have to be more aggressive in picking up containers stacking up at the port.
“Warehouses from the shores of the Pacific to the Mojave Desert – more than 2 billion square feet of space – are overflowing with cargo,” Seroka said, due in part to a lack of workers. “More importantly we have to push this cargo through the system to the interior of the United States, and that starts with importers of record picking up their cargo at the Port of Los Angeles.”
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