Little Opposes New User Fee Proposal

Thursday, May 01, 2008

Before there is any discussion of raising taxes on the industry, Waterways Council, Inc. urges an intense, focused effort to examine why it takes so much longer to build projects than this nation was able to do just two decades ago. This effort must identify the structural and process changes, both within the Corps’ control and external to it, that are required to “get more project” for the dollars that are currently being contributed by industry and invested in lock and dam modernization.  The current system forces the industry to pay for these significantly delayed projects and extraordinary cost escalations.

According to Mr. Little, “Clearly, something is seriously wrong with the way that construction of inland waterway lock and dam modernization projects is currently proceeding.  The cost for Olmsted Lock and Dam, for example, has skyrocketed the most, having a current estimated completion cost that is 271% -- more than two-and a-half times – the $775 million construction cost that Congress originally authorized.   “This is a problem of serious import from the perspective of anyone who cares about how government should perform on behalf of its citizens,” Little continued.

Waterways Council’s alternate solution to the proposed user tax is to adjust the Inland Waterways Trust Fund cost-sharing regimen.  Instead of one-half of the cost of a waterway infrastructure modernization project coming from barge diesel fuel taxes paid into the Trust Fund, only one-fourth of the needed funding should be drawn each year from current diesel fuel tax receipts, with the remainder drawn from general revenues.

At the current $90-$95 million revenue the barge and towing industry presently pays into the Trust Fund each year, a revised cost-sharing regimen would support a Trust Fund-financed annual program in the range of $360-$380 million, approximately the level that the Trust Fund-financed program has reached in recent years.

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