Waterways Fix Melds Taxes, Caps, Feds
Pittsburgh Tribune-Review
2 September 2010
By Kim Leonard
Companies that move coal and cargo on the nation's river system are
pushing a new plan to pay 30 percent to 45 percent more in taxes on the
diesel fuel they burn, as a way to speed work on deteriorating locks
and dams.
"There is a big problem looming out there," James C. Grech, senior vice
president for marketing at Consol Energy Inc., said Wednesday. Unless
critical fixes are made, "there is going to be a massive failure, and
the river industry is going to come to a standstill."
Federal budget constraints have slowed construction and major repairs
needed to keep towboats and barges chugging on the nation's inland
waterways. Western Pennsylvania has 23 locks, more than any other
region nationwide, so the problem takes center stage here, a group of
industry leaders told the Tribune-Review in a meeting yesterday.
They're working to persuade Congress this fall to change the method for
financing river projects, as a way to complete more than 100 major,
sorely needed projects -- totaling $18 billion -- over the next 20
years.
The plan authored by cargo transporters, waterways and business and
labor groups working with the Army Corps of Engineers would combine
higher taxes on business with cost caps on projects and a shift to
total federal funding for dams and projects priced at under $100
million.
"We are postponing and postponing these projects that were due to be
completed years ago," said Peter H. Stephaich, CEO of Downtown-based
Campbell Transportation Co. Inc., a river towing business.
"We have a plan; that's the main point. I haven't heard of a lot of
other industries that have come together with a federal agency and
jointly proposed this type of solution."
Since 1986, companies that use the rivers have paid a federal tax that
now amounts to 20 cents on every gallon of diesel fuel they use in
their operations.
That money goes into a trust fund to modernize and maintain waterways
systems. The fund and federal appropriations are supposed to pay equal
shares to cover major projects.
But the arrangement has been slipping since the late 1990s. Federal
dollars slowed, and costs rose due to project delays. The Army Corps
often had to scale back designs to suit whatever money was available.
One prime example is the ongoing Lower Monongahela River Project to
replace aging structures at Braddock and North Charleroi and remove a
lock and dam at Elizabeth, said James McCarville, executive director of
the Port of Pittsburgh Commission.
"It started as a 10-year, $750 million project in 1994," McCarville
said. "Now it's a 30-year, $1.2 billion project" with no clear funding
path toward completion. While $84 million in federal stimulus money
went into the project last year, just $2 million is proposed in
President Obama's budget for 2011, McCarville said.
Meanwhile, repairs and mechanical failures on aging locks -- some a
century old -- are taking more time and delaying river traffic, the
Army Corps has said.
The tax hike would cost businesses another 6 to 9 cents for each gallon
of diesel fuel they use, and would put $30 million to $40 million more
into the trust fund for projects that now raises about $85 million a
year.
Higher federal appropriations would be needed, but the plan would save
millions of dollars over the long run by completing projects faster,
advocates say.
Debra A. Colbert of the industry group Waterways Council Inc. of Silver
Spring, Md., said supporters are working to include the plan in federal
water resources and development legislation set for action after
Congress returns Sept. 13. If that fails, it could be included in
Obama's budget for the next fiscal year, Colbert said.
Kim Leonard can be reached at kleonard@tribweb.com or 412-380-5606.