President’s Fiscal 2017 Budget ‘Grossly Imbalanced’ For U.S. Ports
Landside freight transportation funds would increase; navigation & port security funds would drop
Today, the American Association of Port Authorities (AAPA), the recognized and unified voice of the seaport industry, is encouraged by the potential of significant gains for landside freight transportation programs in President Obama’s fiscal 2017 budget. However, AAPA is disappointed in the proposed funding levels for U.S. Army Corps of Engineers coastal navigation programs, the Environmental Protection Agency’s Diesel Emissions Reduction Act (DERA) grants, and the Federal Emergency Management Agency’s (FEMA) Port Security Grant program.
The proposed budget reflects the funding increases and freight focus evident in the recently-enacted FAST Act that President Obama signed into law in December, which includes close to $2 billion in dedicated freight funding. Additionally, the budget calls for a new21st Century Clean Transportation Plan that would significantly increase funding for TIGER (Transportation Investments Generating Economic Recovery). If adopted, that would push TIGER funding from $500 million to $1.25 billion.
Conversely, the proposed budget would significantly reduce funding for navigation maintenance and improvements, which is desperately needed to ensure America’s international competitiveness and to allow the nation’s ports to accommodate increasingly large, sea-going vessels. It would also cut funding for DERA and port security grants.
“International trade now accounts for fully 30 percent of the U.S. economy,” said Kurt Nagle, AAPA’s president and CEO. “To compete in global markets, America needs an efficient and modern 21st century freight transportation system. AAPA’s FreightKeepItMoving campaign highlights the importance of investing in both land and water connections to our nation’s port facilities.”
Mr. Nagle continued, “We’re pleased to see and support the increased funding requested for surface transportation infrastructure, but deeply troubled by a grossly imbalanced budget that would cut funding for maintenance and modernization of federal navigation channels, the critical waterside infrastructure that connect our ports and nation to the world marketplace.”
When Congress passed the overwhelmingly-supported and bipartisan Water Resources and Reform Development Act (WRRDA) in 2014, it established annual incremental increases for Harbor Maintenance Tax (HMT) funded work. That would lead to full use of revenues in fiscal 2025, as highlighted in AAPA’s Hit the HMT Target campaign. Not only does the President’s proposed fiscal 2017 budget fail to hit the HMT target, it also fails to continue funding the HMT donor equity provisions that Congress initiated last year. AAPA strongly supports those provisions.
“It’d be a grievous ‘miss’ if this budget is adopted,” said Mr. Nagle. “By underfunding needed waterside investments, it breaks a vital link in the supply chain that disadvantages the entire freight-handling system, waterside and landside.”
The $951 million requested by the President for maintaining America’s deep-draft harbors is 22 percent less than the $1.22 billion appropriated by Congress for fiscal 2016. Furthermore, the budget request for the Corps’ coastal navigation construction program appears to be significantly less than the congressionally-approved fiscal 2016 budget.
Specifically, the proposed budget calls for:
Expanding the multi-modal TIGER program to $1.25 billion annually, an increase from the fiscal 2016 level of $500 million.
Providing $850 million for Nationally Significant Freight and Highway Projects, a new discretionary grant program established by the FAST Act for major highway and freight projects that will achieve national transportation objectives.
Providing $1.1 billion for the National Highway Freight Program, established by the FAST Act, which will provide states with necessary funds for vital projects that will improve the movement of freight on the National Highway Freight Network.
Allowing $275 million to provide credit assistance for nationally or regionally significant transportation projects through the Transportation Infrastructure Finance and Innovation Act (TIFIA) program. This program leverages private sector investments in public infrastructure projects, including those at seaports.
Funding $10 million for the EPA’s DERA grants program, which represents an 80 percent drop from the current $50 million funding level. Ports use these grants in a variety of ways, including the Clean Truck programs, retrofitting or replacing yard equipment, installing shore power for vessels at docks, and retrofitting dredges and tugs.
Funding port security grants, that are part of FEMA’s National Preparedness Grant Program, at $93 million…a 7 percent decrease from the fiscal 2016 level of $100 million. Unlike previous years’ budgets when the request called for moving this and other FEMA grant programs to the states, today’s request is in line with AAPA’s recommendation, calling for port security grants to continue being managed at the federal level.
“While AAPA believes the Administration’s budget would lead to improved freight movement over our surface transportation system, all would be for naught if the budget’s proposed cuts to waterside infrastructure programs were adopted,” said Mr. Nagle. “If we can’t get the goods efficiently and competitively into and out of our country through seaports and waterside navigation channels, American manufacturers won’t be able to receive the materials and/or components they need, and they as well as U.S. farmers, won’t be able to competitively export their products globally. In addition, U.S. retailers and consumers will suffer.”
Mr. Nagle noted that AAPA is also puzzled by the 80 percent decrease in DERA grant funds despite the President’s call in a Feb. 4 press release to devote those funds to improve air quality as part of his climate change initiative. The proposed 21st Century Clean Transportation plan does call for $300 million more in DERA funding if Congress approves the President’s request for a $10.25-a-barrel tax on oil, but it’s unclear if that money would be used at ports.
“As the Administration and Congress grapple with the multiple goals of reducing the nation’s debt while growing jobs and the economy, federal investments in ports and their connecting waterside and landside infrastructure continue to be an essential, effective utilization of limited resources, paying dividends through increased trade, jobs, enhanced international competitiveness, and over $320 billion a year in tax revenues,” said Mr. Nagle.