Executive Briefings

Funding Water Projects: Where's the 'Trust' in 'Trust Fund'?

The human body needs water to survive. So does the nation's transportation system.

Try telling that obvious fact to Congress. Because once again we are engaged in a debate about the way by which critical water transportation projects are funded. Or not, as the case may be.

The most recent Water Resources Development Act was passed by Congress in 2007. (Over a veto by President Bush, it should be noted.) Now WRDA is up for renewal, and the whole dysfunctional system of paying for infrastructure improvements is once more on full display.

At the heart of the debate is the Harbor Maintenance Trust Fund, the supposed means by which water projects are paid for. The problem lies in the definition of the term "Trust Fund." Money in the federal Highway Trust Fund, collected through taxes on gasoline and diesel fuel, must be fully spent on highway and transit projects. But HTF's equivalent on the harbor-maintenance side is a trust fund in name only. The federal government apparently feels no obligation to actually use those dollars for their intended purpose. A huge slice of the funds collected through the Harbor Maintenance Tax remains unspent, to offset the federal budget deficit. According to the Pacific Northwest Waterways Association, the harbor maintenance fund currently has a surplus exceeding $4.7bn.

Meanwhile, in his State of the Union message, President Obama called for a doubling of U.S. exports by 2015. To reach that goal, exporters will need a viable, low-cost water system for getting American goods to overseas markets, notes Janet F. Kavinoky, director of transportation infrastructure, congressional and public affairs with the U.S. Chamber of Commerce. Something's got to give.

Also at issue is the central role of the U.S. Army Corps of Engineers. The Corps is charged with the somewhat schizophrenic task of constructing new water-related resources while protecting the ecosystem. Kavinoky fears that its environmental mission might trump the development of projects that are vital to international trade.

Key legislators such as Sen. Barbara Boxer (D-Calif.) are working to strike a balance between the Corps' role as developer and protector of U.S. water resources, Kavinoky says. Meanwhile, the Inland Waterways User Board, a federal advisory group representing all regions of the nation's waterways system, has come up with a proposal to reauthorize WRDA by way of a higher fee on users. The U.S. Chamber and other trade interests have endorsed the plan.

None of which means that a renewed funding mechanism is just around the bend. "I don't think we'll get a WRDA bill done this year," says Kavinoky. "But [congressional] committees are making their best efforts to move forward."

Expect a major obstacle in the House of Representatives, where Republicans are taking a stand against any projects that would be part of a new WRDA bill. They're capitalizing on the public's aversion to anything that smacks of "earmarks" or "pork." Never mind that certain development projects are essential to keeping U.S. goods flowing to market. It's much easier to adopt a kneejerk position against all government spending. (Unless, of course, it brings jobs to your district.)

"You need to be very interested in making sure that the Corps' navigation mission is strong," says Kavinoky. "We've got to keep working on it. That's Washington for you."

Other transportation-related issues being tracked by the U.S. Chamber include efforts to overturn the current Hours of Service rules for commercial truck drivers, keep Mexican trucks off U.S. roads, and ban independent truckers from local ports. That last battle began at the Port of Los Angeles, which is still trying to force owner-operators to join trucking companies that have been granted exclusive concessions to service its marine terminals. Backing the effort is - you guessed it - the Teamsters Union.

Fasten your seat belts. It's going to be a bumpy summer.

- Robert J. Bowman, SupplyChainBrain

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The human body needs water to survive. So does the nation's transportation system.

Try telling that obvious fact to Congress. Because once again we are engaged in a debate about the way by which critical water transportation projects are funded. Or not, as the case may be.

The most recent Water Resources Development Act was passed by Congress in 2007. (Over a veto by President Bush, it should be noted.) Now WRDA is up for renewal, and the whole dysfunctional system of paying for infrastructure improvements is once more on full display.

At the heart of the debate is the Harbor Maintenance Trust Fund, the supposed means by which water projects are paid for. The problem lies in the definition of the term "Trust Fund." Money in the federal Highway Trust Fund, collected through taxes on gasoline and diesel fuel, must be fully spent on highway and transit projects. But HTF's equivalent on the harbor-maintenance side is a trust fund in name only. The federal government apparently feels no obligation to actually use those dollars for their intended purpose. A huge slice of the funds collected through the Harbor Maintenance Tax remains unspent, to offset the federal budget deficit. According to the Pacific Northwest Waterways Association, the harbor maintenance fund currently has a surplus exceeding $4.7bn.

Meanwhile, in his State of the Union message, President Obama called for a doubling of U.S. exports by 2015. To reach that goal, exporters will need a viable, low-cost water system for getting American goods to overseas markets, notes Janet F. Kavinoky, director of transportation infrastructure, congressional and public affairs with the U.S. Chamber of Commerce. Something's got to give.

Also at issue is the central role of the U.S. Army Corps of Engineers. The Corps is charged with the somewhat schizophrenic task of constructing new water-related resources while protecting the ecosystem. Kavinoky fears that its environmental mission might trump the development of projects that are vital to international trade.

Key legislators such as Sen. Barbara Boxer (D-Calif.) are working to strike a balance between the Corps' role as developer and protector of U.S. water resources, Kavinoky says. Meanwhile, the Inland Waterways User Board, a federal advisory group representing all regions of the nation's waterways system, has come up with a proposal to reauthorize WRDA by way of a higher fee on users. The U.S. Chamber and other trade interests have endorsed the plan.

None of which means that a renewed funding mechanism is just around the bend. "I don't think we'll get a WRDA bill done this year," says Kavinoky. "But [congressional] committees are making their best efforts to move forward."

Expect a major obstacle in the House of Representatives, where Republicans are taking a stand against any projects that would be part of a new WRDA bill. They're capitalizing on the public's aversion to anything that smacks of "earmarks" or "pork." Never mind that certain development projects are essential to keeping U.S. goods flowing to market. It's much easier to adopt a kneejerk position against all government spending. (Unless, of course, it brings jobs to your district.)

"You need to be very interested in making sure that the Corps' navigation mission is strong," says Kavinoky. "We've got to keep working on it. That's Washington for you."

Other transportation-related issues being tracked by the U.S. Chamber include efforts to overturn the current Hours of Service rules for commercial truck drivers, keep Mexican trucks off U.S. roads, and ban independent truckers from local ports. That last battle began at the Port of Los Angeles, which is still trying to force owner-operators to join trucking companies that have been granted exclusive concessions to service its marine terminals. Backing the effort is - you guessed it - the Teamsters Union.

Fasten your seat belts. It's going to be a bumpy summer.

- Robert J. Bowman, SupplyChainBrain

Comment on This Article