FY 2008 $4.8b Budget Request is Highest Level of Funding for USACE

Although it represents a decrease from the FY 2007 spending level President Bush’s FY 2008 proposed budget nonetheless requests the highest level of funding ever included in any President’s budget for U.S. Army Corps of Engineers water resources projects and programs, a total of $4.871b. Last year’s (FY 07) budget request was $4.733 billion. This budget request also proposes FY ’08 spending of $418 million for Inland Waterways Trust Fund financed projects, of which one-half will come from the dedicated Inland Waterways Trust Fund. The remainder would come from general treasury funds, as required under current law.

The FY 2008 Civil Works Budget notes that, “the Administration is developing and will propose legislation to require payment of a user fee … on the commercial interests that benefit from Corps spending on the inland waterways.” It should be noted that a diesel fuel tax of 20 cents per gallon is currently being levied on towboat operators who move commerce on America’s inland navigation system, and this group of taxpayers are not the only beneficiaries of the system. The Administration’s budget statement raises many questions about the nature and scope of any new tax proposal, and Waterways Council, Inc. will be patient in commenting further until a specific tax initiative has been floated.

The President’s FY 08 budget also requests a significant increase in Operations & Maintenance (O&M) funding of Corps infrastructure projects. “The federal government is demonstrating that more money is needed to maintain our critically important inland navigation system,” said R. Barry Palmer, President and CEO of Waterways Council, Inc. “This budget supports our country’s goal of remaining economically viable and competitive,” he continued. Funding for priority lock and dam construction projects remains at record levels in the FY 2008 budget. Specifically the Administration’s support for Waterways Council, Inc.’s priority projects include funding for Olmsted Locks and Dam (Ohio River, IL/KY), $104 million; Kentucky Lock Addition (Tennessee River, KY), $52 million; McAlpine Lock (Ohio River, IN/KY), $45 million; Marmet (Kanawha River, West Virginia), $25 million; Lower Monongahela River 2, 3 and 4 (PA), $70.3 million; Chickamauga Lock (Tennessee River, TN), $35.2 million, and Emsworth Dam (Ohio River), $43 million.

In this FY ‘08 budget approximately $22 million was allocated for five additional major rehabilitation projects on the system, Locks and Dams 11, 19, 24, and 27 (Upper Mississippi River), and Markland (Ohio River). Palmer expressed Waterways Council’s disappointment for the proposed suspension of funding for the Inner Harbor Navigational Canal Lock (New Orleans, LA), Pre-Construction Engineering and Design (PED) for the Upper Mississippi and Illinois Waterway lock and dam modernization projects, John T. Myers Locks and Dam (Ohio River, IN/KY), and Greenup Locks and Dam (Ohio River, KY/OH), all considered priority projects to WCI members.