Barge fuel tax boost sought to improve waterway infrastructure

By Sara Wyant

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, July 9, 2014 - A wide swath of agricultural organizations is hopeful that efforts to improve infrastructure for the nation's barge traffic may be coming to fruition. 

Sen. Bob Casey, D-Penn., is planning to offer an amendment to the Highway Trust Fund Bill that would increase the barge fuel tax - which some would rather call a user fee -- by 9 cents, bringing the total levy to 29 cents-per-gallon for operators using the inland waterways system. The Waterways Council Inc. (WCI) estimates the increase could yield nearly $80 million a year when coupled with matching funds from the General Treasury.

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Amanda De Jong, senior policy adviser with the Iowa Corn Growers Association, says the push for an increase in the levy has been going on for years. The current 20 cent per gallon fee was set in 1986. Officials of the organization were working on the issue 25 or 30 years ago, she said.

“Now, it's their kids and their grandkids who are involved in the organization talking about the same things.” De Jong said the 300 or so barge operators that use the waterways support the increase.

The increase would go towards new construction and rehabilitation of the hundreds of locks and dams on the nearly 12,000 miles of the inland waterways system. In letters sent to leadership of the Senate Finance Committee and the House Ways and Means Committee, WCI and dozens of agriculture-related groups including the American Farm Bureau Federation, the American Soybean Association and the Fertilizer Institute noted most of the current infrastructure was built in the 1920s and 1930s, and is sorely in need of repair.

“This is a critically important system and we can't let it basically fall into the water,” Debra Colbert with WCI said. “These locks are operating long beyond their economic design life, and so they do need an influx of investment and we think this is a fiscally responsible way to do that.”

While it is difficult to put an exact dollar amount on the money needed to update the waterway infrastructure, Colbert said there is an $8 billion backlog of construction or repair work waiting on funds to be appropriated.  De Jong said of 25 repair and modernization projects on the drawing board, only four will be funded if no changes are made to the IWTF.

The need for improved waterway infrastructure is increasing along with the usage of the waterways. Army Corps of Engineers data published in the weekly USDA Grain Transportation Report show that in the first six months of 2014, barges moved 17.3 million tons of grain, up from about 10 million in the same period in 2013.

Since the increase is a revenue issue and not a change in policy, it must be attached to a bill that deals with appropriations. The Highway Trust Fund Bill is the latest in a string of attempts to get the barge tax raised, and Colbert and De Jong remain optimistic about its chances. Colbert hopes Congress will see the measure as a user fee, not a user tax that would interfere with the Taxpayer Protection Pledge signed by 219 representatives and 39 senators in the 113th Congress.

“We think that many of the folks … who put (members of Congress) on record for that ‘no new taxes' pledge … wouldn't score this as a traditional tax increase,” Colbert said. “This is a user fee because we're paying for use of a system, so it wouldn't be scored in the same way.”

However the measure is perceived, De Jong said it is simply time to update infrastructure that keeps American grain markets competitive worldwide.

“Our country made an investment in our grandparents' generations to build a state-of-the-art, efficient transportation system that made the U.S. extremely competitive,” De Jong said. “There are lots of other countries who are very interested in taking some of that market share away from us. If we want to remain competitive, if we want to remain the low cost supplier, if we want to remain the reliable supplier for the rest of the world, we have to have reliable infrastructure.”

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