Increased funding for ports—not just for marine terminals themselves, but connections via water and land—continue to be a key focus for the American Association of Port Authorities.
In January, AAPA held a roundtable in the Port of Long Beach to draw the media’s attention to what it believes is a need to boost support for the country’s freight infrastructure.
“With manufacturers, policy makers, and innovators striving to boost the economy and create jobs as global competition increases, the role played by American ports is more critical than ever,” said Kristin Decas, AAPA chairman and director for Port Hueneme, Calif. AAPA projects a $46 billion investment gap by 2040 that she says “threatens the industry’s ability to deliver prosperity to millions of Americans.”
“While ports and their private sector partners are doing their part by investing over $9 billion a year in port infrastructure, these critical economic engines are under threat by a lack of overall infrastructure investment in connecting to and from these facilities,” she added.
Kurt Nagle, president and chief executive officer of the association, said last year’s Water Resources Reform and Development Act (WRRDA) demonstrated there is bipartisan support for improved water infrastructure.
AAPA mounted a campaign in 2014 to assure funding targets laid out in WRRDA for utilization of the Harbor Maintenance Tax (HMT) were met.
The fiscal year 2015 “Cromnibus” bill passed by Congress in December provided $1.1 billion, 10 percent more than appropriated in fiscal year 2014.
Ports have complained that for years too little of the money collected by the Harbor Maintenance Tax and put into the Harbor Maintenance Tax Fund (HMTF) is actually used for its intended purpose, with the surplus in the HMTF (expected to reach $8.5 billion by the end of the current fiscal year) used to reduce the general federal deficit.
WRRDA set up a plan to incrementally increase the share of the HMT collected each year to be used for dredging until it reaches 100 percent a decade from now.
The legislation also said a small amount of the HMT could be used for “expanded purposes,” including berth dredging, security or environmental remediation, and AAPA was a supporter of allowing this so that so-called “donor ports” such as Los Angeles, Long Beach, Seattle and Tacoma that have little need for maintenance dredging, but generate much of the revenue under the HMT, could share a bit of its bounty. Initially, the amount set aside for those expanded uses is about $20 million.
Speaking in January, Nagle said AAPA is lobbying both Capitol Hill and the Obama administration “to try to get the president’s budget to hit those targets and then also working with Congress.”
AAPA expressed disappointment when in February the president in his 2016 budget requested only $915 million, or 47 percent, of the estimated $1.93 billion that it said the HMT was expected to raise in 2015, and less than the WRRDA target of $1.32 billion.
“For 2016 and beyond, we want to focus on them continuing to increase those targets, continuing to increase the level of funding of the HMT, providing more revenues for the port to maintain the channels but also then more revenue for the expanded uses,” Nagle said.
Asked if an increase in the HMT, a per diem tax based on the value of imports, might be used to fund more landside infrastructure, Nagle and other executives were cool to the idea, in part because so little of the HMTF has historically been used to fund its intended purpose.
AAPA was more pleased with other parts of Obama’s 2015 budget for funding surface transportation, which included a boost in the TIGER grant program to $1.25 billion from $500 million in the current fiscal year; $18 billion over six years for dedicated regional freight infrastructure; and $6 billion over the next six years to cover the subsidy cost for providing credit assistance for transportation projects through the Transportation Infrastructure Finance and Innovation Act if they have national or regional significance.
Decas said a survey of AAPA members found nearly a third believe their ports need investment of $100 million or more in first- and last-mile surface infrastructure.
“We think either TIGER or a TIGER-like program does need to be permanently authorized,” Nagle said. “And we have been advocating that at least 25 percent should be provided to port-related infrastructure.”
There is a need, he added, for both funding outside of the traditional highway trust fund for freight and a multimodal freight office within the U.S. Transportation Department’s Office of the Secretary.
“The overall sense is that freight movement in this country has not fared well—there has not been anywhere near enough funding,” he said. With volumes rising “we’re not going to be able to handle it if we don’t devote higher attention and funding to freight transportation.”
While there is more discussion by members of Congress about raising the gasoline tax to fund infrastructure, he said support for the tax or a freight funding mechanism is going to be dependent on a clear recognition that the money being collected is really used for those purposes.
AAPA continues to advocate for adequate levels of port security, and Nagle believes in the wake of the Sony hacker attacks last year that efforts to improve cyber security will be stepped up.
Nagle also noted that overall national freight policy needs to find ways to encourage wider use of water transport for the movement of goods within the United States.
“We are not advocating taking trucks off the road or using less rail,” he said. But with growing transport volumes “we’re going to use all of our arrows in our quiver and the one we’re not utilizing that heavily right now is the maritime part of our system.”
This column was published in the March 2015 issue of American Shipper.
