Harbor Maintenance Tax reform can end nation’s dredging crisis

By: | at 08:00 PM | Ports & Terminals  

The dredging crisis crippling the nation’s ports and waterways is the direct result of the Federal government not spending tax revenues for their intended purpose, a national coalition of maritime users and shipping interests told a House Subcommittee. In 2007, the Federal government collected $1.4 billion in Harbor Maintenance Taxes, but spent only $751 million to maintain the nation’s deep-draft navigation system.

“Federal ports and harbors cannot be fully maintained with existing Corps funding levels,” resulting in a “dredging crisis … in many parts of the country,” declared Jim Weakley, President of the Lake Carriers’ Association, and a representative of the Coalition. He said ensuring adequate dredging would directly lead to increased and more efficient domestic and international trade.

Although the Harbor Maintenance Trust Fund was intended to collect monies targeted to dredging, it now holds a $4.7 billion surplus, Weakley told the Subcommittee, money that could and should be spent on dredging.

“Dredging can literally make or break [the maritime] industry and the maritime industry is the grease that lubricates trade,” Weakley said. He noted that 99% of America’s overseas trade and the vast majority of domestic transportation are tied to the maritime industry, yet the efficiencies of the system are limited by undredged or under-dredged ports, channels, and other waterways.

Weakley testified before the Water Resources and Environment Subcommittee of the House Transportation and Infrastructure Committee. He asked the Subcommittee to consider legislation to ensure that monies taken in through the Harbor Maintenance Tax be spent on dredging.

Congress established the Harbor Maintenance Tax and Trust Fund in 1986, taxing cargo moving through Federally maintained channels. Shippers pay the 0.125% ad valorem tax on imports and domestic cargo.


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