Firms plead for lock, dam upgrades,Tax us, please.

[Bravo Zulu]

Companies that depend on the region's waterways take an unusual position on paying for improvements: Tax us, they say

Tax us, please.

That's the surprising plea from local energy companies and barge operators who depend upon the area's rivers for their business, and are desperate for federal upgrades to the waterways' crumbling locks and dams.

Funding is running dry for essential upgrades around the upper Ohio, Monongahela and Allegheny, where one long-delayed project with a $1.2 billion price tag -- Lower Mon 2 (Elizabeth), 3 (Braddock) and 4 (Charleroi) -- is supposed to be finished by 2023, but is slated for only $2 million in federal funding next fiscal year, basically mothballing the project. The new industry tax plan would leverage fixes to that project and 24 others over 20 years at a total cost of $7.6 billion.

The region's old locks lead to backups and logistical nightmares for river-borne industry. Better and bigger ones would mean longer tows of barges and more efficient hauling of coal and other resources. A U.S. Army Corps of Engineers cost-benefit study claimed if the Lower Mon project had been completed when it was supposed to be in 2004, it would have saved the local economy $1.2 billion per year in efficiencies.

"The economic stability of the region depends on having reliable infrastructure," said Jim McCarville, executive director of the Port of Pittsburgh Commission, "and we don't have reliable infrastructure."

Thus the tax increase offer. For a year, industry groups and the Corps of Engineers studied ways to improve the nation's waterways infrastructure funding and struck a deal (which needs Congressional approval) to increase the taxes paid by the towing and barge industry by up to 45 percent. They currently pay a 20-cent tax on diesel fuel -- which goes into a trust fund that pays for waterways upgrades -- but would increase that by 6 to 9 cents per gallon.

There is a catch. Currently, industry and the federal government each share 50 percent of the costs of lock construction and rehabilitation. That would continue on large projects costing $100 million or more, but in the new proposal the government would handle all cost-overruns as well as take over all the costs for smaller lock-and-dam projects. Industry also would help prioritize which large projects nationwide are targeted.

The proposal has drawn the ire of the National Wildlife Federation, the Sierra Club and other groups, which complained that the industry already is over-subsidized by the federal government and the plan would put taxpayers on the hook for $200 million in increased spending.

Read more: http://www.post-gazette.com/pg/10250/1085562-147.stm#ixzz0yohFlixS

[aquart]

1. Wait. If we tax them it costs us more money?

HUH?

[ProgressiveProfessor]

2. The issue will become user fees vs general taxes to fund them

If the users bear the full cost, it will impact the affordability of what is being carried. How much of it should be a national burden (vice regional or local) is always going to be an argument. If the local economy is going to save 1.2B a year as the COE claimed, there would be less reason to nationalize the costs.