Ports Stress Need for Federal Government Partnership

Friday, December 17, 1999
U.S. public ports testified at a hearing before the House Transportation and Infrastructure Subcommittee on Water Resources and Environment about the continued need for federal government investment in maintaining harbors around the country to ensure the U.S. has the most efficient, safe and environmentally responsible marine transportation system in the world. Testifying on behalf of the American Association of Port Authorities (AAPA), Lillian Borrone, director, Port Commerce Department, The Port Authority of New York and New Jersey, said "the health of our nation's ports depends on the strong and long-standing partnership between local public port authorities and the federal government." According to the U.S. Maritime Administration, in 1998 alone, ports invested nearly $1.5 billion in updating and improving their facilities; an additional $9.1 billion of non-federal investment is expected before 2002. The federal government has historically funded 100 percent of navigation channel improvements as well as maintenance, but in 1986 the federal role of the partnership was limited to cost-sharing capital improvements to federal navigation channels. Today, federal spending for maintenance dredging of navigation channels is about $500 million from the Harbor Maintenance Tax (HMT). A recent General Accounting Office study shows the commercial maritime industry pays $22 billion per year in federal assessments. Borrone talked about the need to strengthen the federal participation in funding harbor development and maintenance, including support for H.R. 1260, the "Support for Harbor Investment Program," or "SHIP Act," as introduced last spring by Representatives Borski (D-Pa.) and Oberstar (D-Minn.). H.R. 1260 would repeal the HMT and use existing general revenues for funding costs of operating and maintaining federal navigation channels. Borrone went on to say regular enactment of the Water Resources Development Act (WRDA) legislation, which authorizes harbor improvements, is of critical importance to the nation's economy. "The task of meeting the present and expected future demands on our navigation system has never been so complex, and never as much in the public spotlight, as it is today," she testified. If projects are not authorized regularly, the national benefits, as well as regional economic diversification and job creation opportunities, will be delayed or lost. The AAPA testimony also noted the need to accommodate the new classes of Post-Panamax ships, which can load more cargo per vessel, some more than 4,000 TEUs, but also require deeper drafts. The required depth for general cargo navigation channels may be as great as 53 ft. In WRDA '86, Congress created a cost-sharing formula for navigation improvement projects based on the needs of the general cargo fleet at that time. A cost-sharing transition was set at 45 ft., above which (i.e. shallower) local sponsors (generally the port) would pay a 35 percent (25 percent plus 10 percent over 30 years) cost-share and below, which (i.e. deeper) would be cost-shared at 60 percent (50 percent plus 10 percent over 30 years) local.

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