Editorial: Whose Ox Would Get Gored By Lock Fees?

The Bush Administration recently released a proposal for lockage fees. Key stakeholders say it is merely a poorly disguised attempt to increase taxes on the barge industry, and observers give it little chance for passage.

Still, one might ask, “Whose ox gets gored if it were to pass?” Not so oddly, as it relates to almost any controversial proposal, someone’s ox stands to get gored, and that someone generally becomes an energetic opponent of the proposal.

In reality, to understand the negative impact of what the administration is proposing, one must read the testimony of Stephen D. Little, who testified on behalf of Waterways Council Inc. on April 30 before the House Subcommittee on Water Resources and Environment. Little is president of Crounse Corporation.

Little, who calls the proposal “a tax increase, pure and simple,” provided examples of three transportation scenarios showing how the application of the fees would increase the amount of Inland Waterway Trust Fund-bound taxes by “sevenfold, 595 percent, and nearly double. The fees, he said, “will adversely impact economic interests throughout the country in an uneven and, in some regions, a punitive manner.”

Finally, Little explains how delays in construction of seven projects authorized in the Water Resources Development Act of 1986 increased costs by 32.4 percent. The average cost increase because of construction delays for five post-WRDA 1986 projects is estimated to be 110 percent, more than double the original cost estimates. Construction delays are often caused by Congress not appropriating money for the specific projects.

If we understand it correctly, the fee proposal will result in financial favors for towboat operators who never have to use locks. They will eventually not have to pay fuel tax, and will not pay lockage fees, either. But the fees would result in a financial earthquake throughout the nation.

Perhaps also not so odd is that money collected for locking barges has nothing to do with the cost of lock operations, which comes out of the operations and maintenance (O&M) fund of the U.S. Army Corps of Engineers.

Actually, money from the IWTF was intended to pay 50 percent of construction costs. That makes sense as long as the river traffic utilizes enough fuel and generates enough fuel tax to meet the needs. It no longer does.

According to the Upper Mississippi Waterway Association, recreational boating is increasing at a faster pace than commercial navigation.

“While the lock and dam system was constructed to aid and assist commercial navigation, there are now more lockings for recreational boats than for commercial vessels. In 1997, [some] 51.5 percent of the lockings in the upper 10 locks [on the Mississippi] were for recreational boats; 44.2 percent were for commercial towboats and barges; and 4.2 percent were for all other vessels,” the UMWA reports in its “Statement of Objectives”.

It is the contention of UMWA that “recreational boaters do not at this time contribute financially to the maintenance of the navigation system in any way comparable to towboat user fees.” After recreational user fees were established in the 1990 Budget Reconciliation Act, Congress repealed the fees hastily when boaters complained, UMWA stated.

Needless to say, UMWA is against increasing user fees on the towboating industry and recommends the enactment of recreational boating user fees. The association says that the recreational boat gasoline tax that now irrationally goes into the Highway Trust Fund should be redirected to a fund for federally canalized rivers.

The opposition to increased user fees for the towboat industry is understandable. A Price-Waterhouse study completed in 1994 revealed that the Upper Mississippi River navigation industry has an annual impact of well over $4.5 billion on the five upper Midwest states and provides approximately 48,000 jobs. Approximately 65 percent of the U.S. grain exports originate at, or are handled through, grain elevators along the waterway.

The federal government (no, the entire country) should recognize the importance of our inland waterway system and its contributions to the economy of the nation. It should be maintained and modernized as necessary directly from federal coffers without having to go through the acrobatics contained in the authorization and appropriations process. Further, the money needed for waterways could easily be obtained by eliminating the “highway-to-nowhere”-type add-ons that surface with every new bill.

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