President's Proposed FY'12 Budget A Mixed Bag For Seaports
With the release of President Obama's fiscal 2012 budget yesterday, the American Association of Port Authorities (AAPA)-which represents seaports throughout the Western Hemisphere-is expressing both optimism and disappointment over various aspects of the budget pertaining to seaports and the efficient, safe and cost-effective movement of freight.
Kurt Nagle, AAPA's president and CEO, said that a potential bright spot for seaports in the Administration's proposed fiscal 2012 budget is the plan's heightened commitment to infrastructure investment. The budget includes a robust, six-year, $556 billion surface transportation authorization proposal, as well as a $50 billion up-front, first-year outlay which provides $2 billion for a National Infrastructure Investments program, similar to TIGER.
Last year, TIGER program grants funded $95 million in seaport-related infrastructure such as roads, rails, bridges, tunnels and navigable waterways that connect with ports.
Among the elements proposed for the Department of Transportation budget would be a National Infrastructure Bank (I-Bank) that would leverage federal dollars and focus on investments in projects of national and regional significance. The I-Bank would provide grants, loans or a blend of both to an expanded list of eligible multi-modal projects, including highway, transit, rail, aviation, seaport and maritime initiatives. An example in the budget's supporting materials is that the I-Bank could support improvements in road and rail access to ports.
"AAPA applauds the Administration's desire with the DOT budget to prioritize transportation infrastructure investments. However, we're concerned that the expanded variety of modes in the I-Bank compared to TIGER could cause funding for seaport-related infrastructure to be overshadowed by high-profile initiatives such as transit and intercity rail," said Mr. Nagle. "There needs to be a heightened federal focus on freight transportation," he added.
"While we're optimistic that certain seaport-related infrastructure could be funded through the I-Bank, the Administration's proposed budget cuts for the U.S. Army Corps of Engineers' Civil Works program misses the mark by failing to adequately fund the waterside infrastructure that is critically needed to restore the economic security of the nation, increase exports and create the jobs necessary for full economic recovery," said Mr. Nagle. "Although we're mindful of the need to make necessary sacrifices to reduce the deficit, we believe the priority for programs and projects that enhance America's ability to move cargo and compete in world markets should be raised rather than lowered."
If approved, funding for the Corps' Civil Works program in fiscal 2012 would drop by more than a quarter-billion dollars to $4.631 billion. That includes a $6 million reduction in the draw from the Harbor Maintenance Trust Fund (HMTF) to $758 million. These cuts are in addition to the Administration's proposal to expand the authorized uses of the HMTF so that its receipts are also available to finance the federal share of other commercial navigation programs, such as the U.S. Coast Guard.
"Because development and maintenance of our federal navigation channels are critical for safe and secure access to America's seaports, AAPA is greatly disappointed with this portion of the Obama Administration's proposal," said Mr. Nagle. "It would cut more than 5 percent from last year's Civil Works program budget request that was already 10 percent less than what was requested in fiscal 2009."
The Administration's proposed Civil Works program cuts run counter to its goals to create new U.S. jobs and promote exports, Mr. Nagle said. In addition, the reduction in the draw from the HMTF for maintenance dredging and the proposal to spend a portion of those funds for programs unrelated to maintenance dredging further reduces navigability into and out of America's ports.
"The annual Harbor Maintenance Tax revenues that are collected specifically for maintenance dredging must be fully utilized, and used as intended by law for this purpose only," said Mr. Nagle, noting that, currently, importers and domestic shippers pay approximately double the annual amount drawn from the HMTF for navigation maintenance.
In the environmental arena, funding for the Diesel Emissions Reduction Act-which was just reauthorized for five years and is a successful program that has provided significant public health benefits-is zeroed out in the Administration's budget proposal. On another front, the amount recommended for the Port Security Grant Program is the same $300 million level as last year. AAPA has consistently argued for the full $400 million in appropriations as authorized in the SAFE Port Act of 2006.
"Our nation's economic health and security depend largely on how well we can ensure efficient connections and deep-draft shipping access to our seaports in order to support exports, the more than 13 million jobs related to trade moving through our ports, and help America's economy prosper," he said. "Over a quarter of U.S. GDP is accounted for by international trade, and as the budget process advances, we're hopeful that the Administration and Congress recognize the tremendous contributions that seaports make to the economy and jobs, and prioritize those programs accordingly."