Government officials put pressure on Congress to release funds for port maintenance
on October 3, 2011
Public officials and maritime industry leaders met on Friday to urge Congress to release funds collected from the Harbor Maintenance Tax in order to improve California’s port infrastructure and help stimulate economic growth.
The federal tax is essentially a user fee, levied in 1986 and collected from port customers. In 1990, it was increased with the promise that the Harbor Maintenance Trust Fund would pay for 100 percent of port maintenance, including channel dredging. However, the vast majority of this revenue still sits idle in the trust fund, according to speakers at the press conference.
“What they’ve done is they’ve allowed a surplus to grow just shy of $6 billion. That makes the deficit small,” said California Lt. Governor Gavin Newsom. “They need it there because it looks better sitting there. What looks worse is our economic competitiveness.”
At the press conference speakers were particularly concerned over the Oakland port’s need for funding for new maintenance dredging. Each year, sedimentary deposits settle at the bottom of ports’ channels, and have to be dug up in order to maintain the channels’ authorized depth and width. The Port of Oakland has an authorized depth of 50 feet.
“It took $300 million to originally get it to that depth,” said Mike Jacob, vice president of the Pacific Merchant Shipping Association. “Your expectation is that tax is there essentially to make sure that that depth is maintained. Now we’re looking at a channel that’s 46 feet deep. Even though money is there to maintain it, it isn’t being spent.”
Jim Haussener, executive director of California Marine Affairs and Navigation Conference, said that the cost of the dredging required would continue to rise if it was delayed. “In 1997, dredging cost $2.2 million. Now we need $25 million for the Port of Oakland. It’s appalling,” he said.
As the depth of the channels diminish, they become harder for boats to navigate, said Haussener. Ships and carriers have to keep reducing their maximum weight limit in order to cross them successfully, which means they carry less freight in and out of the port. “Every year, they have to come in light-loaded and leave light-loaded,” said Haussener. This reduces the overall competitiveness of the ports, he said.
“Ships and carriers have a choice; they can go somewhere else,” said Leal Sundet, coast committeeman of the International Longshore and Warehouse Union. “They don’t mind paying [the tax] if they get something in return for those dollars.” But if the government continues to collect the tax without spending it on port maintenance, business from port customers is likely to decline, said Sundet. Releasing the funds would allow the port authorities to maintain standard requirements and generate jobs for thousands of Californians, said Newsom.
In an effort to convey this demand to Congress, in September state Senator Mark De Saulnier (D- Concord) and state Senator Jean Fuller (R-Bakersfield) jointly authored California Senate Joint Resolution 15, demanding that the surplus of $5.6 billion in the Harbor Maintenance Tax Fund be released immediately to improve California ports and create jobs. The bill is currently under discussion in the state legislature and has not yet been voted on.
Speakers at the news conference gave their support to this proposed legislation. “Everyone says, ‘We don’t have money for this, we don’t have money for that.’ Now we actually have the resources to do this but there’s an absence of leadership,” said Newsom.
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