Trump administration budget proposals for a 16% cut in the Corps of Engineers 2018 spending and $1 billion in new waterway user fees over 10 years are unlikely to survive in Congress.
Lawmakers are already shoring up Corps waterways projects in their districts, with a 2017 omnibus appropriation of $6.038 billion that is a record level.
Money is coming from the reconstructed Inland Waterways Trust Fund, pumped up with a 2014 increase in the diesel fuel tax paid by tow operators. That deal was struck after the industry and its supporters on Capitol Hill blocked attempts under the previous Obama and Bush administrations to levy new user fees.
“It’s the same OMB (White House Office of Management and Budget) staff that pushes on and keeps recommending this,” said Mike Toohey, president and CEO of the Waterways Council, Inc.
The administration’s proposal for $100 million to be raised annually by a new waterways user fee came as a surprise to industry and Congress. Tow and barge operators in 2014 went along with an increase in the diesel tax they pay, from 20 cents to 29 cents a gallon, while their supporters in Congress blocked any new user fee — despite recommendations from the National Research Council and other experts.
That influx of new revenue into the trust fund has moved Corps projects along, with 2017 construction spending planned at $409 million, up from $402 million, “so the users agreeing to a tax increase of 45% back in 2014 has been paying off,” Toohey said.
The Trump budget actually recommends $1 billion more for the Corps than Obama’s last budget, but it is still $1 billion below what Congress wants to spend, Toohey said.
As for the proposed additional user fee, it would raise about the same size revenue stream as has come in from the higher diesel tax, Toohey said. But “more troubling is they don’t propose to spend any of that on the inland waterways.”
“What this administration forwarded is not what’s going to happen,” said Roger Bernard, a policy analyst with Informa Economics, at the Inland Marine Expo in St. Louis last week. “User fees are never easy to get through Congress.”
The Trump administration also proposed allowing new tolls on interstate highways to attract private investment in infrastructure, and the waterway user fee is of a piece with that philosophy of free-market advocates.
“When you listen to some of the think tanks in Washington, their fingerprints are all over it,” Bernard said of the budget. But like increasing road tolls or gasoline taxes, the waterway fee is unlikely to get any traction, he said.
Barge operators had early hopes of benefitting from Trump’s call for $1 trillion in infrastructure spending, with the prospect of fixing aged locks and dams, and new business hauling aggregate and steel for highways.
“The budget only contemplates $5 billion of infrastructure to start and then $200 billion in coming years,” Toohey said. “They’re expecting $800 billion to come from outside the federal budget…we won’t know what that looks like until they present the infrastructure plan. It’s a work in progress.”
