Trump Budget Barge User Fee Could Cause Price Hikes: Trade Group

By Brandon Ross

The Trump administration’s budget proposal for a new user fee on commercial barge owners operating on the inland waterways system could disproportionately raise shipping prices for communities along the Mississippi River, the Waterways Council, Inc., told Bloomberg BNA.

The White House’s Office of Management and Budget proposes to establish an “annual fee” on inland commercial waterways traffic to fund waterway projects relating to construction, operation, maintenance and repairs on locks and dams. The budget says that existing diesel fuel taxes of 29 cents-per-gallon on barge operators won’t fund the industry’s part of capital investments in inland waterway projects projected over the next decade. The government and industry are supposed to share in a 50-50 project funding structure.

The budget estimates that the proposed user fee would generate more than $1 billion for the Inland Waterways Trust Fund by 2027; the fund has less than $60 million currently.

Similar-sounding proposals were advanced under the Obama and Bush administrations under various names, Debra Calhoun, senior vice president of the Waterways Council, Inc., told Bloomberg BNA May 24. The council doesn’t have the details of how the fees would be implemented exactly, but Calhoun said the Obama and Bush-era proposals were nonstarters for the organization and lawmakers alike.

“We need more details,” Calhoun said. "[W]e are not supportive of [the user fee method] and Congress has not been supportive of that.”

The diesel tax method is the best industry funding route, she added.

Pro-Trump Communities Would Be Hit Hardest

User-fee-based proposals would hit communities along the main part of the Mississippi River—communities that voted for President Trump—the hardest, she said. That’s because the highest concentration of locks and dams are along the main part of the river, meaning goods shipped specifically along that part would see higher shipping prices that translate to higher consumer prices, Calhoun said.

“You’re disadvantaging certain parts of the country that have more locks,” she said.

The Waterways Council just pushed successfully for Congress to raise the current waterway diesel tax on operators by 45 percent in 2014, she said. The tax was upped from 20 cents-per-gallon to 29 cents.

Barge operators are paying their fair share, Calhoun said, noting that commercial operators aren’t the only ones that benefit from the inland waterways system.

Calhoun also criticized the administration’s proposed billion-dollar cut to the Army Corps of Engineer’s budget. The Corps carries out maintenance and construction work on the country’s navigable waterways.

If anything, more money is needed for the nation’s infrastructure work, she said. Otherwise, the U.S.'s infrastructure will begin to trail China and South America, who each recently have been spending several times more on their infrastructure as compared with the U.S.'s $4 to $5 billion annual expenditure, she said.

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