US to raise river tax for freight carriers
Companies that transport goods on US inland waterways would pay more than twice as much as they do now to build and repair locks and dams under a proposal by President Barack Obama, Bloomberg reports. Taxes and fees paid by shippers would increase to about US$200 million a year from the expected US$80 million in fiscal 2012. The plan includes a new fee on all river users and a second levy for those using locks, in addition to the 20 cent per gallon tax that barge and tow operators pay on fuel purchases, according to a deficit reduction proposal Mr Obama's administration sent to Congress.
The increased burden is unfair to commercial users, who have been willing to pay higher fuel taxes and sought an increase since 2009, according to Debra Colbert, a spokeswoman for industry group Waterways Council Inc.
'Adding exorbitant costs to shippers and operators will ultimately raise prices for consumers on everything from breakfast cereal to electric bills,' Ms Colbert said. 'Never a good idea in a down economy.'
About US$70 billion worth of grain, coal, steel and other products are transported annually on 19,000 kilometres of rivers weaving through the US heartland, according to the Waterways Council. Many locks and dams on those rivers are more than 50 years old and in disrepair.
A lock near Brookport, Illinois, that's the busiest in the US by shipping tonnage is 82 years old, and water levels are adjusted by lifting wooden barriers with a steam-powered crane.
The new levels of taxes and fees, after being matched by taxpayer money, would provide US$400 million a year for inland waterways projects, up from US$180 million now.
The fuel tax covers about 8 per cent of what the US Army Corps of Engineers spends on behalf of inland waterways users, according to Margaret Reilly, spokeswoman for the Office of Management and Budget.
Users in other Corps of Engineers programmes pay 35 per cent or more of the costs, she said in an e-mail. 'The current way of producing the funds that support the user-financed share of these costs is not working as intended,' Ms Reilly said.
One tier of Mr Obama's proposed fee would be levied on all commercial users of inland waterways. The other tier would be paid only by vessels using locks. The Secretary of the Army would set the fees annually, according to the plan. About US$7 billion will be needed over 20 years to keep the inland waterways navigable, according to Waterways Council.
About 20,500 barges operate on the Mississippi River and connecting waterways including the Ohio, Missouri, Arkansas, Tennessee and Cumberland rivers, according to a 2010 report by Informa Economics, a research firm.
The Obama proposal places too much burden on lock users such as Midwest agricultural shippers, said Mike Steenhoek, executive director of the Soy Transportation Coalition, an industry group.
Soybean growers support a fuel tax increase, as it spreads costs among all waterways users, he said. The administration didn't request a fuel tax increase.
'The agriculture industry is one of the few bright spots in this economic malaise we find ourselves in,' he said.
'Placing an additional burden on that group only makes them less competitive on the world market.'
The increased burden is unfair to commercial users, who have been willing to pay higher fuel taxes and sought an increase since 2009, according to Debra Colbert, a spokeswoman for industry group Waterways Council Inc.
'Adding exorbitant costs to shippers and operators will ultimately raise prices for consumers on everything from breakfast cereal to electric bills,' Ms Colbert said. 'Never a good idea in a down economy.'
About US$70 billion worth of grain, coal, steel and other products are transported annually on 19,000 kilometres of rivers weaving through the US heartland, according to the Waterways Council. Many locks and dams on those rivers are more than 50 years old and in disrepair.
A lock near Brookport, Illinois, that's the busiest in the US by shipping tonnage is 82 years old, and water levels are adjusted by lifting wooden barriers with a steam-powered crane.
The new levels of taxes and fees, after being matched by taxpayer money, would provide US$400 million a year for inland waterways projects, up from US$180 million now.
The fuel tax covers about 8 per cent of what the US Army Corps of Engineers spends on behalf of inland waterways users, according to Margaret Reilly, spokeswoman for the Office of Management and Budget.
Users in other Corps of Engineers programmes pay 35 per cent or more of the costs, she said in an e-mail. 'The current way of producing the funds that support the user-financed share of these costs is not working as intended,' Ms Reilly said.
One tier of Mr Obama's proposed fee would be levied on all commercial users of inland waterways. The other tier would be paid only by vessels using locks. The Secretary of the Army would set the fees annually, according to the plan. About US$7 billion will be needed over 20 years to keep the inland waterways navigable, according to Waterways Council.
About 20,500 barges operate on the Mississippi River and connecting waterways including the Ohio, Missouri, Arkansas, Tennessee and Cumberland rivers, according to a 2010 report by Informa Economics, a research firm.
The Obama proposal places too much burden on lock users such as Midwest agricultural shippers, said Mike Steenhoek, executive director of the Soy Transportation Coalition, an industry group.
Soybean growers support a fuel tax increase, as it spreads costs among all waterways users, he said. The administration didn't request a fuel tax increase.
'The agriculture industry is one of the few bright spots in this economic malaise we find ourselves in,' he said.
'Placing an additional burden on that group only makes them less competitive on the world market.'