USACE Still Needs More Money, Says NWC

Thursday, August 26, 1999
To properly do its job, the U.S. Army Corps of Engineers needs at least $4.7 billion, said some speakers at the National Waterways Conference Budget Summit. On the other hand, some asked, should the USACE be responsible for waterways management at all? Although the budget proposed by the Administration for the USACE in FY 00 is "close" to what's needed; there is still a shortfall of approximately $700 million, said speakers at the National Waterways Conference (NWC) Budget Summitt, held last month in Washington, D.C. Additionally, some speakers questioned the need of proposed harbor services fees; especially if they should be added to the budget proposal. And at least one speaker asked if the USACE should even be the responsible party for waterways management and maintenance. T. Fred Caver, chief, Programs Management Division, USACE, began the summit by assuring the audience, "the new budget request is far better than the previous proposal." Caver pointed to the earlier request, which included the lowest construction amount in history. "It would have resulted in the termination of ongoing construction projects," Caver said. "Fortunately, the amount was not acceptable to Congress, and we ended up with a reasonable amount. "This year's Administration budget proposal acknowledges for the first time the importance of waterways management. There's balance in the program, and the entire budget is at near-capability levels." "Proponents would like to see USACE funding at $4.7 billion," said Ann M. McCulloch, public affairs manager, NWC. "Last year the Administration proposed $3.3 billion, and Congress settled on $4.1 billion. This year, the Administration suggested $3.9 billion, which is certainly better than in the past, but still far short of what's needed." Funding of high priority programs, mostly environmental, head the list, including Everglades restoration activities and the Pacific West Columbia River Salmon restoration project, the largest single item budgeted. "Other areas are not treated as well," Caver continued. "Flood control, for instance, along the inland navigation channels, is funded at about the same amount as last year, which is approximately two-thirds the amount required. The result is an extension of completion dates." Additionally, the general investigation fund, which contributes to the investment decision-making process of which water resource projects to construct in the future, has also been reduced, by $27 million for FY 00. Caver also discussed the proposed Harbor Services Users Fee, a topic of much debate. "The Harbor Services Users Fee would fund deepdraft navigation," said Caver. "It would replace the Harbor Maintenance Fund, which was recently declared partially unconstitutional [tax is not allowed on exports, but still is collected on imports, resulting in a total of $629 million, annually]. It changes from a 'tax' to a 'users fee.' "The fee would fund operation and maintenance (O&M) requirements and would fund capital improvements in deepdraft water. The President estimates $951 million can be raised from the new users fee being included into the FY 00 budget, of which $258 million would go to capital improvements, and $693 million would fund O&M activities." The anticipated total is $322 million more than the Harbor Maintenance Fund already collects, Caver said, meaning if the new user's fee is not passed, approximately $330 million would need to be "found." "There's nearly one billion dollars in new taxes in that budget proposal - they call it 'fees,' but it's taxes - and we don't even need it yet," said Jean C. Godwin, senior vice-president, American Association of Port Authorities (AAPA). "There's no connection between the value of a cargo and the cost of dredging," Godwin continued. "So why should a vessel carrying a shipment of computers pay more than a vessel carrying a shipment of wastepaper? "We're not recovering what we need for maritime dredging - with what's left of the Harbor Maintenance Trust Fund, we still collect $629 million, which is more than enough. This plan means the money collected will cover the federal government's contribution, as well. So even though military ships use the channel, as well, maintenance dredging costs will be borne entirely by commercial shippers…a very narrow universe. "We cannot let budget 'sleight-of-hand' create new policy," Godwin said. "There's a great deal of skepticism surrounding the Harbor Services Fee," said Benjamin H. Grumbles, senior counsel, Subcommittee on Water Resources and Environment, House Committee on Transportation and Infrastructure. "And then, there's H.R. 111, a bill proposing to take trust funds off budget; also known as the 'truth in budgeting' act. Both of these are sure to generate much debate. "The chances of a Water Resources Development Act (WRDA) being passed in the first session are relatively high, but it needs to be enacted by summer, otherwise, the odds decrease." The FY 00 budget will allow the USACE to continue with its ongoing studies, although only one new study - flood control in California - will be started. Caver said the USACE had proposed starting 90 reconnaissance studies, of which flood control in California was not one, ironically. The O&M budget would also enable the USACE to not have to add to the backlog of maintenance for the first time in years. Currently, the value of the USACE's backlog is $1.6 billion worth of postponed work. The amount won't allow the USACE to start working the backlog off, but will prevent any more work being added, said Caver. "Since we have no more budget deficits - at least, on paper - is now the time to begin making investments into the infrastructure? If not, when is?" asked Caver. "We've reached 'zero;' we've balanced the budget," said Rich Meade, chief of staff to Congr. Jim Nussle (Iowa). "Now we need to agree on how to set up the budget. One group wants to increase spending, on education, aviation, infrastructure; one group wants tax relief; one group advocates discretionary spending; some are lobbying for a prescription drug plan for senior citizens." "It's important to realize, we spent well above the budget last year, so already, in the House budget, some trends have been established: special education was increased; there will be tax relief when possible; and Social Security is being preserved. "Even if the decision is to spend, then all the groups lobbying for that will need to compete with each other for what slice of the pie they get," Meade concluded. Congressman Jay Dickey (Ark.) spoke on the importance of waterways; and the need for associations such as the NWC to harness its lobbying power to convince the policymakers of the need for the maintenance in danger of not being funded. "This country is dependent upon waterways," said Dickey, a member of the House Appropriations Committee. "All major cities are near rivers. All the other methods of transportation - rail, air, truck - they all have liabilities. That's not the case with waterways. "As professionals, you need to spend money into political action committees. You need to convince the policymakers that waterways are important. "Are there too many waterways organizations? Well - one thing for certain is the other transportation organizations, the air and rail associations, are very organized. As waterways professionals, you have to aspire to be that organized; you have to be convincing." David L. McMurray, chairman, Upper Mississippi, Illinois and Missouri Rivers Association, said in his region the navigation, environmental stewardship and flood protection were all lacking. The Upper Mississippi River, Illinois River and their tributaries are funded at $10.5 million for flood protection, in contrast to the $330 million funded to the Lower Mississippi River. "When we suffered $20 billion of damage from flooding, it was not because of inferior levees," McMurray said. "They didn't break, it was just a lot of rain and poor structural design. But it's had to maintenance such as rebuilding levees, mainly because of environmental concerns. "Environmental concerns are important, but need to be dealt with on a reasonable level.," McMurray continued. Robert Portiss, port director, Tulsa Port of Catoosa, said the industry needs to foster a better public image to eliminate threats to the industry. "Our industry is not 'user-friendly.' We're fragmented. But without a positive public image, the industry is threatened. Along the Columbia Snake River, there's a plan to remove the dams - all of them - and to restore the river to its original condition. This is part of the plan for salmon restoration." R. Barry Palmer, executive director, DINAMO, said his region is currently being funded for construction of locks and dams and new projects at approximately $75 million. This is in comparison to FY 96's budget of $225 million. "We have new authorized projects valued at three billion dollars," Palmer said. "If we could get to a level of approximately $250 million by 2002 or 2003, that would mean there'd be substantial completion of many unfinished locks and dams by 2010. "Even now, we'd still need another $75 million to get to a reasonable level of construction, as it is, some projects have been delayed by as much as six years. Reaching a level of adequate funding would help us speed up the completion dates of projects by three to nine years." Should the USACE be Replaced? "Should we be looking somewhere else in the government to give water transportation a home?" asked Christopher Brescia, president, Midwest Area River Coalition 2000 (MARC 2000). "Should the USACE be the ones with jurisdiction? "Eight years ago, the Upper Mississippi Region began a reconnaissance study to determine the need for lock and dam modernization. Four years ago, the railroad in the same area was determined to need trackage - a $1.4 billion investment. The railroad will start construction in one year. There are no plans to begin construction on the waterways project. "The feasibility study was begun six years ago," Brescia continued. "Within a week, legislation will be introduced to begin construction on the locks and dams, even though there's no feasibility report. The USACE has to answer why there is no report. They'll have to answer the question of 'how do you authorize lock extensions in one part of the country with 17 million tons of cargo and not in another part of the country with 35-45 million tons of cargo?' "We are on the threshold of a revolution in agriculture in the form of biotechnology. You know you're on the verge of a revolution when other countries try to keep the product out, because they know it's better than what they have. "We have the capability today of doubling our agricultural production, yet, in the feasibility study, biotechnology has not been factored in. Any increase in production has not been included. "When projections were given, we said, 'we'll fulfill all domestic consumption, and whatever's left, we'll export or keep as reserves.' We were told the exports would be reduced - as barge rates go up, the excess will instead go to domestic consumption. 'Wait a minute? Didn't we say we'd meet all requirements of domestic consumption? So where's the increased need for this excess?' We were simply told, 'it'll be there.' "We have lost faith in the feasibility process, which is why legislation is being introduced," Brescia concluded. "We have lost faith in a system where our region contributes 40 percent to a trust fund and receives 15 percent back. We have lost faith in the USACE."-Chris Palermo

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