USA: FY13 Administration Budget Proposal Supports Aspects of Seaports Agenda

With the release yesterday of President Obama’s fiscal 2013 budget, the American Association of Port Authorities (AAPA)—representing seaports in the United States and throughout the Americas—is expressing both accolades, and some disappointment, over various aspects of the budget pertaining to ports and the efficient and secure movement of freight.

Kurt Nagle, AAPA’s president and CEO, said that, even though the Administration’s budget includes cuts in order to meet the Budget Control Act passed by Congress last year, there are bright spots for seaports, such as a much-needed increase in the portion of the U.S. Army Corps of Engineers’ funding pertaining to deep-draft navigation maintenance, and funding for the Department of Transportation’s budget that pertains to enhancing America’s freight mobility.

The president’s 2013 budget proposal includes a request for reimbursement from the federal Harbor Maintenance Trust Fund (HMTF) of $848 million. This represents a nearly 12 percent increase ($90 million) over the fiscal 2012 request of $758 million and would be $28 million more than the $830 million Congress appropriated for maintenance dredging in fiscal 2012. While still not close to the $1.4 billion collected annually from importers and domestic shippers for deep-draft navigation maintenance dredging, the Administration’s fiscal 2013 request is a significant increase from prior years.

“The President’s proposed Civil Works program increase for navigation is the highest budget request ever, and is a very positive step toward AAPA’s long-stated goal of full utilization of the Harbor Maintenance Tax for its intended purpose,” said Mr. Nagle.

“Maintaining our federal navigation channels to their authorized and required dimensions will also help make U.S. exports more internationally competitive and is critical for safe access in and out of America’s seaports,” he said.

Since the Harbor Maintenance Tax’s inception in 1986, AAPA has advocated for full use of its collections for their intended purpose of dredging America’s deep-draft navigation channels to their authorized and required depths and widths. Mr. Nagle added that, currently, importers and domestic shippers pay approximately double the annual amount that is drawn from the HMTF for maintenance dredging, leaving a surplus that exceeds $6.3 billion today. Because this surplus has been used for other programs, there are serious dredging needs that have gone unheeded.

Another area of the proposed budget important to America’s freight competitiveness falls under the Department of Transportation, which contains a robust, six-year transportation authorization proposal funded at $476 billion. Additionally, the budget request funds immediate transportation investments in fiscal 2012 totaling $50 billion. These investments include $26 billion for the National Highway Program and $4 billion for the National Infrastructure Investments (NII) program—formerly TIGER—which in the past three years has funded more than a quarter-billion dollars in seaport-related infrastructure. All of these elements would have strong and positive effect on freight system improvement.

The proposal also authorizes the NII program at $3.4 billion cumulatively through 2018 as part of the Administration’s six-year authorization proposal. AAPA has long advocated for authorizing a TIGER-style program and dedicating at least 25 percent of the grants to port-related infrastructure.

“AAPA lauds the Administration’s desire to prioritize both land- and water-side transportation infrastructure investments with the Department of Transportation and Corps of Engineers budgets,” said Mr. Nagle. “As the Administration and Congress continue to seek ways to reduce spending, it’s imperative to focus scarce federal dollars in those areas, such as seaport-related infrastructure, that can have the greatest impact on economic growth, immediate and long-term job creation, and our current and future competitiveness in the global economy.”

With regard to seaport security, Mr. Nagle said that the AAPA is both supportive and appreciative of the portion of the administration’s proposed budget that calls for $2.9 billion—more than double last year’s funding level—for FEMA State and Local Programs, which houses the Port Security Grant Program. The budget request, however, also bundles all funds into one pot and gives the Homeland Security secretary the authority to determine funding levels.

The association has opposed similar proposals in the past because first responder programs are substantially different than port security programs and because states may not adequately allocate funds for port security if the programs are combined at the state level.

AAPA continues to advocate for a separate port security funding program at a $400 million annual level to aid ports in beefing up their security infrastructure, technology and personnel programs, and to ensure that terrorist threats don’t become terrorist realities.

In the environmental arena, funding for the Diesel Emissions Reduction Act—which has been highly successful in helping ports reduce dangerous emissions from older diesel engines—includes $15 million. While a huge improvement over the president’s fiscal 2012 budget request to zero-out the program, it represents only half of what Congress appropriated in 2012. The budget also calls for eliminating the former grant funding strategy in favor of a program that provides rebates on the purchase of pollution control technology and grants for revolving loan programs. The budget proposal states that communities with the greatest need, such as a limited set of low-income and high exposure areas near ports and freight distribution hubs, would be targeted.

“While we’re encouraged by the focus on funding diesel emission projects near ports and freight distribution hubs, AAPA will need to carefully evaluate the effect of moving away from grants, which have been highly successful in port areas and used by many AAPA-member port authorities,” said Mr. Nagle.

AAPA will continue to press Congress for full funding of DERA at the authorized amount of $100 million per year.

“As the Administration and Congress grapple with the multiple goals of reducing the nation’s deficit while growing jobs and the economy, federal investments in ports and connecting infrastructure are an essential, effective utilization of limited resources paying dividends through increased trade, jobs and tax revenues,” said Mr. Nagle.

About AAPA

Founded in 1912, AAPA today represents 160 of the leading seaport authorities in the United States, Canada, Latin America and the Caribbean and more than 300 sustaining and associate members, firms and individuals with an interest in seaports. As a critical link for access to the global marketplace, each year, Western Hemisphere seaports generate trillions of dollars of economic activity, support the employment of millions of people and import and export more than 4.5 billion tons of cargo including food, clothing, medicine, fuel and building materials, as well as consumer electronics and toys. The volume of cargo shipped by water is expected to dramatically increase by 2020 and the number of passengers traveling through our seaports will continue to grow. To meet these demands, the AAPA and its members are committed to keeping seaports navigable, secure and sustainable.

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Dredging Today Staff, February 14, 2012; Image: aapa