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It isn’t often in Washington that an interest group asks Congress to raise its taxes — but that’s exactly what inland barge operators are urging.
And that proposal, to raise the 20-cents-per-gallon diesel tax they pay by 9 cents a gallon, threatens to pre-empt a White House budget proposal to impose a new per-vessel user fee instead.
Both plans would generate more revenue to repair, maintain and upgrade the inland channels and locks that allow shipments to move by water, but the White House plan would generate more revenue.
Groups such as the Waterways Council Inc., which represents inland waterways users, say their plan to boost the diesel tax is more equitable because it would assess fees based on usage. Because some vessel operators use the system more frequently, the operators argue that assessing a per-vessel levy would spread the costs unfairly. Raising the current diesel tax would assess the fee based on how far each vessel actually travels and how much tonnage it carries.
Industry advocates say they were perplexed when President Barack Obama’s budget ignored their proposal and instead reprised the idea of a per-vessel fee, which the administration has been recommending since its fiscal 2011 budget. Proposals for new user fees have been offered since the George W. Bush administration, which recommended charging a toll on shipping for transiting locks.
“It seems to rear its head in each and every budget,” an inland waterways industry lobbyist complained. “It’s very similar to earlier proposals that have been around since the Bush administration, and I can assure you they’re no more popular now than they were then.”
The Army Corps of Engineers budget request does not spell out an actual per-vessel charge but says it would be set at a level that would raise about $80 million in new revenue next year. That’s about twice the new revenue that the industry-backed diesel tax increase would generate. And the barge operators also want taxpayers to assume a greater burden in the long run.
The industry plan would maintain the current 50-50 cost sharing between users and taxpayers for new lock construction and rehabilitation projects worth $100 million or more. But general tax revenue would pay for lock rehabilitation projects that cost less than $100 million, as well as all dam-related costs and — perhaps most significant — all cost overruns.
One project, the Olmsted Locks project in Illinois, is on track to run more than $3 billion over budget and has eaten up much of the Inland Waterways Trust Fund revenue in recent years. Barge operators want to avoid covering overruns at Olmsted and other future projects. The Army Corps of Engineers worries that shifting the burden to taxpayers could put the Olmsted Locks and future waterways projects at risk.
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