Port Leaders Respond to President’s FY07 Budget Request

Tuesday, February 07, 2006
At a news conference the National Press Club, two leaders representing America’s public seaports expressed their concerns about the Administration’s recommended changes to the Department of Homeland Security’s Port Security Grant program and under-funding of the portion of the U.S. Army Corps of Engineers’ Civil Works program that provides needed navigation access to ports.

Representing the American Association of Port Authorities at the news conference will be Kurt Nagle, president and CEO of the American Association of Port Authorities (AAPA), and Bernard Groseclose, president and CEO of the South Carolina State Ports Authority, who is also this year’s AAPA chairman. Similar to last year, the President’s 2007 budget proposal recommends lumping the security infrastructure needs of seaports with those of trains, trucks, busses and other public transit into a new and consolidated Targeted Infrastructure Protection program (TIP).

“The federal share of the seaport facility security funding partnership needs to be increased, not reprogrammed and diluted,” said AAPA’s Mr. Nagle. “Another top federal priority should be to adequately fund the U.S. Army Corps of Engineers to keep the nation’s deep-draft channel maintenance projects on schedule. Simply put, we believe all authorized channel projects with positive benefit-cost ratios should be maintained at their authorized project depths.” Nagle noted that United States economy, safety and national defense depend largely on how well the country can protect its seaports and ensure deep-draft shipping access to them.

“When the Administration proposed lumping port security into the TIP last year, the proposal was debated in the Congressional appropriations process and rejected,” said Mr. Nagle. “It’s not in the nation’s best interest to dilute the focus on maritime security.” Since its inception in 2002, the Port Security Grant program has provided much-needed support to address immediate security needs and assessments. But federal money allocated in the first five rounds of the program – about $708 million – accounted for only about one-fifth of what seaports identified as needs. AAPA has urged the Administration and Congress to annually fund the program at the $400 million level. AAPA also urges DHS to allow all U.S. port facilities that handle international cargo to be eligible to apply for port security grant assistance.

Although airports, first responders and research and development centers receive most of the federal attention and funding for security and terrorism prevention, seaports – which support 5 million jobs and annually handle $2 trillion worth of cargo and more than 8 million cruise ship passengers – remain largely under-funded at the federal level. As a result, they must divert limited port resources to pay for enhanced security, often at the cost of improving their facilities to handle fast-growing trade volumes. The Administration’s budget request also seeks an amount for the Corps of Engineers’ Civil Works program that is insufficient to meet the navigation needs of America’s seaports. While at least $750 million in funding from the Harbor Maintenance Trust Fund is needed for navigation channel maintenance, the Administration’s budget calls for $707 million.

“We are pleased that the President’s latest budget request represents an increase of $33 million over last year’s request,” stated Mr. Nagle “Yet, the budget still falls short of what is needed to adequately maintain the nation’s ports and harbors." AAPA Chairman Bernard Groseclose noted that it’s particularly troubling that channel maintenance is underfunded since the money to maintain the country’s federal navigation channels has been “prepaid” by the users of the channels via payment of a harbor maintenance tax on imports and domestic cargo shipments. He said AAPA will continue to work with the Administration and Congress this year and in future years “to help put the ‘trust’ back into the Harbor Maintenance Trust Fund” and to assure that federal budgets for the Corps’ Civil Works program are adequate to meet the needs of business and the port industry.

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