Page 56: of Maritime Reporter Magazine (August 1983)

Higher User Taxes

Would Be Bad Economics (continued from page 55) dustry agree with the principle that the users of a transportation system should pay their fair share of the costs for that system. How- ever, we disagree with the current administration's proposal allocat- ing to the waterways freight in- dustry of 70 percent of total fed- eral expenditures. This, on top of the currently mandated 10 cents per gallon fuel tax, is hardly what anyone reasonably could call a "fair share."

The proposal also would author- ize segment-specific ton-mile fees providing for recovery of 70 per- cent of the capital expenditures of the Corps and TVA assigned to commercial waterways transpor- tation projects. Moreover, the pro- posal contemplates imposition of congestion fees on top of the rest.

Instead of being a compromise in the administration's scheme be- tween the "ideal" and the status quo, which is how it is advertised, the level of recovery could actually exceed 100 percent of the costs.

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Telex: 946524 Cable: MAROPEDOK CROYDON to forge a principle of federal re- sponsibility for construction, operation, and maintenance of the inland waterways. This policy dates back to the earliest days of the na- tion when Congress, in order to encourage interstate transporta- tion, forbade any charge for the use of inland waterways. The pol- icy was enunciated, among other places, in the Northwest Ordi- nance of 1789, which declared that inland waterways "shall be com- mon highways and forever free . . . without any tax, impost or duty therefor."

That policy went out the win- dow, with the Inland Waterways

Revenue Act of 1978, which estab- lished a tax on fuel used in com- mercial transportation on 26 in- land and intracoastal waterway segments, the revenues from which are deposited in the inland water- ways trust fund. The tax, increas- ing from 4 cents per gallon in 1980, to 6 cents currently, and to 10 cents by 1985, has created a change in national policy so new that the impacts of the legislation have not yet been fully felt, much less analyzed.

The U.S. Treasury is now col- lecting approximately $5 million for each 1

The barge and towing industry is paying user taxes, and has been paying user taxes for three years, but not one penny of the trust fund revenues has yet been au- thorized for use on new projects. If the federal government won't use revenues already collected, what is the rationale for seeking still more taxes?

There are three powerful rea- sons, any one of which makes the imposition of new and higher waterways taxes bad policy. First, there has been no accurate cost al- location study performed. What is the portion of the Corps of Engi- neers construction, operation and maintenance cost that should be attributed to the barge and towing industry, and what portion prop- erly should be assigned to the other beneficiaries?

Second, we in the industry feel strongly that all modes of trans- portation must be treated with an even hand if the nation's interests are to be served. To tax the water- ways industry for its services at the same time that the railroads

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