AAPA stresses need for more port and waterside infrastructure funding in proposed White House budget

While surface transportation received a fair amount of funding in the White House’s proposed Fiscal Year 2016 budget, which was released earlier this week, the early feedback from the American Association of Port Authorities (AAPA) is that more attention–primarily in the form of increased funding–is needed to meet the international trade needs of the U.S. economy.

“International trade now accounts for fully 30 percent of the U.S. economy,” said Kurt Nagle, AAPA’s president and CEO, in a statement. “To compete in global markets, America needs an efficient and modern freight transportation infrastructure system, including seaports and the land and water connections into and out of port facilities. We’re pleased to see and support the increased funding requested for surface transportation infrastructure, but deeply troubled by the proposed cuts to maintenance and modernization of federal navigation channels, the critical waterside infrastructure that connect our ports and nation to the world marketplace.”

Some of the most notable transportation infrastructure and freight-related highlights of the proposed budget include:
-$478 billion for a six-year transportation reauthorization proposal geared towards improving safety, supporting critical infrastructure projects and job creation while improving the country’s roads, bridges, transit systems, and railways; and
-providing $1.25 billion per year for the TIGER grant program, which ensures that economic funding is rapidly made available for state and local transportation infrastructure projects and that project spending is monitored and transparent, among others

Even though these types of things are highly beneficial in terms of improved freight movement, the AAPA’s top executive said they may be limited in their true ability, because the proposed budget included various funding cuts for waterside infrastructure, programs such as reducing the U.S. Army Corps of Engineers funding from the $2.33 billion appropriated last year to the requested $1.95 billion for FY 2016.

And for the Harbor Maintenance Tax (HMT), which is comprised of revenues collected annually from importers and domestic shippers for deep-draft navigation maintenance dredging and the operation and maintenance of large and small ports, the White House’s budget request is unchanged from a year ago.

The AAPA said the HMT’s funding targets and formulas for equitable distribution, as per the 2014 Water Resources Reform and Development Act were not met in this proposed budget, considering that WRRDA’s funding target for FY 2016 is $1.32 billion, while the $915 million proposed in the budget amounts to 47 percent of the estimated calendar year 2015 HMT revenue of $1.93 billion. On top of that, AAPA noted that the White House request is 16 percent less than the $1.1 billion appropriated by Congress for fiscal 2015.

And the AAPA made it clear that should the budget’s proposed cuts for waterside infrastructure programs end up being the case, it will diminish the potential benefits of the budget being proposed for landside freight transportation.

The reason for this, Nagle, said, is that if goods cannot be efficiently and competitively moved into and out of the country through seaports and waterside navigation channels, it is have a negative impact on U.S. manufacturers and farmers as they will not be able to export their products in a competitive manner, which will also impact U.S. consumers and retailers.

AAPA Public Affairs Director Aaron Ellis told LM that this situation presents equal opportunity challenges across the country for ports, whether they need money for maintenance dredging, or an equitable distribution for ports considered donor ports, based on an clause in WRRDA that indicates some money can be used for dredging or other expanded and related uses. Other challenges it presents are for ports dealing with issues related to maintaining deep draft channels and improving them for the influx of larger vessels calling on U.S. ports.

“Across the country, there is a considerable uptick in the volume of cargo U.S. ports are handling as noted in the Global Port Tracker report,” he said. “Even with the West Coast port issues, imports are expected to rise. Ports are handling increasing cargo, and we are telling our members to talk to their representatives in Congress. The AAPA is also putting together nearly daily visits to Capitol Hill and working through the Ports Caucus and other avenues to raise awareness, such as an influencers roundtable in Long Beach in January to raise awareness on these issues.

AAPA Navigation Legislation and Policy Director Jim Walker said that getting the needed capital allocation in the budget is critical, as most US ports are operating with federal navigation channels that have depth and/or width restrictions due to insufficient maintenance dredging from partial use of HMT funds.

“These restrictions affect the safe and efficient freight movement to and from the global marketplace,” he explained. “The approach to dealing with these restrictions varies from things like limiting to one-way traffic instead of the 2-way traffic width authorized, constructed and needed for efficient operations; light loading ships – leaving cargo at the dock and increasing the transportation costs of goods; and delaying ship arrivals and departures for tidal peaks.”

Walker stressed that the current situation should not be the case in terms of how the HMT’s funds are used and allocated.

Congress established the Harbor Maintenance Tax (HMT) in 1986 with the tax revenues to be used to fund 100 percent of the operation and maintenance expenses of coastal and Great Lakes Federal navigation channels. Even though, the HMT revenues collected are sufficient to properly maintain the channels and waterways, Walker said “unfortunately the process established by Congress has the taxes deposited into the General Treasury leaving it up to the Administration and Congress to annually budget and appropriate the funds, respectively.  Constrained federal funding limits the amounts that can be requested within budget caps resulting in insufficiently maintained channels and an HMT surplus that stand at nearly $9 billion (and is expected to rise to nearly $10 billion by the end of fiscal 2015).”