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Advocates for Inland Waterways Users Say They're Perplexed by Obama Budget

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A barge carrying parts of the spire of the Freedom Tower travels from Port Newark to lower Manhattan. The Waterways Council Inc., which represents inland waterways users, says its plan to boost the diesel tax by 9 cents per gallon would spread costs more fairly than a White House budget proposal to institute a per-vessel fee.

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.

While it’s unusual for an industry to ask for a tax increase as the barge operators are doing, it’s not completely unheard of — especially in the transportation realm.

For example, the American Trucking Associations and other highway user groups have urged Congress to increase federal fuel taxes or other fees dedicated to the Highway Trust Fund, partly to head off a rush by states to impose tolls on new roads or bridges. And the U.S. Chamber of Commerce supports raising highway user taxes to lock in more dedicated revenue, saying its member companies depend on a smooth-functioning transportation system to bring in workers and materials to their factories and ship finished goods out to their customers.

Senate aides say the proposal by inland waterways users has gotten serious attention from lawmakers. Inland waterways legislation (S 407) introduced by Democrat Bob Casey of Pennsylvania and Republican Lamar Alexander of Tennessee includes the industry-requested diesel tax increase. The senators hope to roll their plan into a water resources authorization bill (S 601) that the Senate is expected to take up on the floor this month.

While inland waterways operators are unhappy about the administration’s proposal for the new per-vessel fee, operators and users of coastal ports are disappointed that the budget would spend just $900 million from the Harbor Maintenance Trust Fund next year on dredging and other port projects. The balance of the $1.6 billion in user fee revenue would be held back as in previous years to offset spending elsewhere.

Kurt Nagle, president and CEO of the American Association of Port Authorities, said the proposal ignores “sense of Congress” language in last year’s surface transportation authorization (PL 112-141) that called for spending all Harbor Maintenance Trust Fund receipts annually on related port projects. The fund is supported by a tax on imported and domestic cargo.

“On the one hand, we’re pleased the administration has bumped up its budget request for vital navigation channel maintenance projects,” Nagle said in a statement. “On the other hand, we’re disappointed the president’s budget is still hundreds of millions shy of what Congress called for.”

John D. Boyd contributed to this report.

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