Page 38: of Maritime Reporter Magazine (June 1999)

Market Reports • Inland ity of it was less positive, as the Admin- istration's plans for the budget surplus, seemingly, didn't include the maritime industry.

T. Fred Caver, chief, Programs Man- agement Division, USACE, began the summit by assuring the audience, "the new budget request is far better than the previous proposal." Caver pointed to the earlier request, which included the low- est construction amount in history. "It would have resulted in the termina- tion of ongoing construction projects,"

Caver said. "Fortunately, the amount was not acceptable to Congress, and we ended up with a reasonable amount.

The FY 2000 budget will allow the

USACE to continue with its ongoing studies, although only one new study - flood control in California - will be started. Caver said the USACE had pro- posed starting 90 reconnaissance stud- ies. The budget would also enable the

USACE to not have to add to the back- log of maintenance for the first time in years. Currently, the value of the

USACE's backlog is $1.6 billion worth of postponed work. The amount won't allow the USACE to start working the backlog off, but will prevent any more work being added, said Caver. "Since we have no more budget deficits - at least, on paper - is now the time to begin making investments into the infrastructure? If not, when is?" asked Caver. "We've reached 'zero;' we've bal- anced the budget," said Rich Meade, chief of staff to Congr. Jim Nussle (Iowa). "Now we need to agree on how to set up the budget. One group wants to increase spending, on education, avia- tion, infrastructure; one group wants tax relief; one group advocates discre- tionary spending; some are lobbying for a prescription drug plan for senior citi- zens."

Users Fee or Tax? "The Harbor Services Users Fee would fund deepdraft navigation," said

Caver. "It would replace the Harbor

Maintenance Fund, which was recently declared partially unconstitutional [tax is not allowed on exports, but still is col- lected on imports, resulting in a total of $629 million, annually]. It changes from a 'tax' to a 'users fee.' "The fee would fund operation and maintenance (O&M) requirements and would fund capital improvements in deepdraft water. The President estimates $951 million can be raised from the new users fee being included into the FY 2000 budget, of which $258 million would go to capital improvements, and $693 million would fund O&M activi- ties."

The anticipated total is $322 million more than the Harbor Maintenance Fund already collects, Caver said, meaning if the new user's fee is not passed, approx- imately $330 million would need to be "found." "There's nearly one billion dollars in new taxes in that budget proposal - they call it 'fees,' but it's taxes - and we don't even need it yet," said Jean C. Godwin, senior vice president, American Associ- ation of Port Authorities (AAPA). "There's no connection between the value of a cargo and the cost of dredg- ing," Godwin continued. "So why should a vessel carrying a shipment of computers pay more than a vessel carry- ing a shipment of wastepaper? (Continued on page 43)

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