WASHINGTON, June 1, 2017 - Agricultural shippers and other waterway users are struggling to talk the Trump administration out of using river tolls to pay for rebuilding locks and dams under its infrastructure initiative.
Representatives of the Waterways Council Inc., which represents shippers and waterway operators, have met twice with administration officials, first in December and then in May to push an industry proposal to fund 24 projects at a cost of $8.7 billion over 10 years.
The projects include the reconstruction of seven locks and dams on the upper Mississippi and Illinois rivers at a cost of $2.8 billion. Congress authorized the projects, collectively known as the Navigation and Ecosystem Sustainability Program (NESP), but they have never been funded.
The White House so far is moving ahead with the idea of funding its infrastructure program through a combination of private investment and government funding. Waterway users, who already pay a federal barge tax for waterway projects, have long resisted the use of tolls to fund capital costs.
Michael Toohey, president and CEO of the Waterways Council, said tolls would have to be so high that they would drive away traffic from the rivers and make it impossible for investors to make money on their investment.
“Investors will want 8 percent return or higher,” Toohey said. “How can you do that if you bankrupt and drive people off the waterways?”
The Waterways Council is proposing to pay for 75 percent of the cost of the projects through tax reform that would encourage companies to repatriate earnings being held overseas. The remainder of the cost would come from the Inland Waterways Trust Fund, which is funded through the 29-cent-per-gallon barge tax.
The White House, so far, hasn’t been receptive. “They’re all about capturing more from the private sector in order to invest more in the waterways,” Toohey said.
The industry’s most recent meeting was with D.J. Gribbin, the White House special assistant for infrastructure policy. Gribbin is an advocate for public-private partnerships, a concept known as P3, for funding infrastructure projects. He previously worked for Macquarie Capital, where he he led advisory teams structuring public-private partnerships for governmental clients.
Representatives from grain elevators and other shippers will be in Washington next week to lobby for infrastructure funding and fighting the idea of tolls. U.S. farmers are at risk of using their competitive advantage without the waterway improvements, said Bobby Frederick, director of legislative affairs and public policy for the National Grain and Feed Association. “This is among the smartest money you can spend,” Frederick said.
It’s not clear when the White House will release its infrastructure proposal. There is some speculation that Congress may not take up the proposal until 2018 to maximize the benefit to Republican candidates in the congressional elections in November.
Trump’s fiscal 2018 budget proposal didn’t give the industry much reason to be optimistic about the broader infrastructure initiative .
The budget included $5 billion for the Corps of Engineers’ civil works program, $382 million more than the Obama administration requested for fiscal 2017, but $1 billion less than Congress wound up providing. The budget proposes $1 billion for construction, $50 million below Obama’s request for fiscal 2016 and $736 million less than Congress appropriated.
The Trump budget would cut off funding for three of four ongoing Corps waterway projects and it includes a new user fee that has been proposed by earlier administrations. None of the $108 million raised by the fee would actually fund waterway projects.
Toohey said the funding request reflected the influence of career staff at the Office of Management and Budget. Toohey said of the budget, “How in good conscience could any commercial operator support doubling their revenue into the trust fund when the administration refuses to spend it for what it’s being raised?”
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