Port Leaders to Question Administration Proposed Funding

Monday, February 05, 2007
At a news conference beginning at the National Press Club, the top two leaders representing public port authorities in the United States will respond to the Bush Administration’s recommended appropriation levels for the Department of Homeland Security’s Port Security Grant program and the portion of the U.S. Army Corps of Engineers’ Civil Works program that provides crucial navigation access to ports.

Representing the American Association of Port Authorities will be Kurt Nagle, president and CEO of the American Association of Port Authorities (AAPA), and Warren McCrimmon, president and CEO of Ohio’s Toledo-Lucas County Port Authority, who also serves as AAPA’s U.S. Delegation chairman. In its proposed fiscal 2008 budget, the Bush Administration recommends the Department of Homeland Security’s Port Security Grant program—the only federal program that assists public ports to fund marine facility security improvements—receive $210 million in Congressional appropriations. This is the largest amount the President has ever recommended as a line item for this program and it is equal to what Congress appropriated in fiscal 2007. Still, it is in stark contrast to action taken last fall when Congress approved and the President signed into law the SAFE Port Act of 2006, authorizing $400 million a year in Port Security Grant program appropriations—the level that AAPA recommended. The Administration’s budget request calls for an 8 percent overall increase in DHS’s budget in fiscal 2008, but recommends no increase for port facility security. “The federal share of the seaport facility security funding partnership needs to be increased to the level the President and Congress approved in the SAFE Port Act,” said AAPA’s Mr. Nagle. Since its inception in 2002, the Port Security Grant program has provided much-needed help to address immediate security needs and assessments. But federal money allocated in the first six rounds of the program–about $876 million–accounted for only one-fifth of what seaports identified as needs. For more than four years, AAPA has urged the Administration and Congress to annually fund the program at the $400 million level. AAPA has also urged DHS to allow the grants to reimburse expenses such as security personnel and long-term security equipment maintenance. 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 9 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, in some instances at the cost of improving their facilities to handle fast-growing trade volumes. According to Mr. Nagle, the Administration’s budget request also seeks an insufficient amount to fund the Corps of Engineers’ Civil Works program, which is vital to meet the navigation needs of America’s seaports and the businesses they serve. Although $1.1 billion to $1.3 billion in funding from the Harbor Maintenance Trust Fund is needed to maintain federal navigation channels, the Administration’s budget calls for only $735 million. U.S. port development and maintenance is a shared responsibility of federal, state and local governments, with extensive private sector participation. The federal government maintains harbor access channels, while individual ports spend more than $2.1 billion annually to construct and maintain the landside terminal facilities, dredge their own berths and contribute to channel improvement cost-sharing programs.

Overall, the Administration is requesting $4.871 billion for the Corps’ Civil Works program, compared to the $4.733 billion it requested last year, representing about a 3 percent increase. “We’re pleased the President’s budget request for the Corps’ overall Civil Works program appropriation is about $141 million more than last year’s request. If accepted, that would translate to $28 million more coming out of the Harbor Maintenance Trust Fund to pay for navigation channel maintenance,” stated Mr. Nagle. “While we applaud any incremental increase in funding for this program, the President’s proposed budget still falls far short of the more than $1 billion that is needed annually to maintain the nation’s navigation channels at their required depths and widths. Proper funding would help reduce shipping costs for America’s businesses, making the products we buy and sell less expensive.” Mr. McCrimmon, AAPA’s U.S. Delegation chairman, noted that it’s particularly troubling that the Administration recommends short-changing navigation channel maintenance when the money to dredge the country’s shipping lanes to their required levels has been “prepaid” by the users of those waterways via payment of a cargo tax on imports and domestic freight. 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 appropriations for the Corps’ Civil Works program are raised to meet the needs of businesses and the port industry.

Nagle noted recent reports about a rise in U.S. exports as being “…good news for American businesses trying to compete in overseas markets.” However, he said that this type of news would be much more common if the harbor maintenance taxes collected from U.S. importers and domestic shippers were used exclusively for their intended purpose, which is to maintain the country’s shipping lanes at their authorized levels, thereby improving access and reducing transportation costs. Mr. Nagle added that the U.S. economy, environment and national defense depend largely on how well we can ensure deep-draft shipping access to our seaports and protect them against terrorism.

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