US dredging tax like getting 'McDonalds to build bigger Burger Kings'
2012 04 04
- Details
THE US Harbour Maintenance Tax (HMT) is like having the "government tax McDonalds to build bigger Burger Kings", California Democratic Congresswoman Grace Napolitano told a congressional committee hearing recently.
"We must correct and fix this inequity," she told the House Water Resources and Environment Subcommittee, referring to a tax where the bulk of the money is raised from busier ports to pay weaker rival ports, who pay far less, to compete more effectively.
Ms Napolitano said it was unfair to the Port of Los Angeles and Long Beach, which receives US$265,000 from the Harbour Maintenance Trust Fund (HMTF), but contributes $220 million, so rival ports can take cargo away from southern California.
She said a minimum amount should be appropriated to the port where the money is raised, and the fund should pay all costs maintaining harbours deeper than 45 feet, reported American Shipper. Today, fund only pays all costs for ports with less than a 45 foot draft; local governments or port authorities must fund the rest themselves if they have more than a 45-foot depth.
Minnesota Republican Congressman Chip Cravaack said there was a $7.1 billion surplus in fund which should be used for dredging. "Why are we having such difficulties getting our harbours to the widths and depths that are needed?"
On the subject of the 2013 budget for the Army Corps of Engineers, which contracts such work, Ohio Republican Congressman Bob Gibbs, chairman of the committee, said President Barack Obama only wants to spend half the money collected in the HMTF, which is funded by the Harbour Maintenance Tax, a 0.125 per cent tax on the value of imports.
"Once again, only two of the nation's 10 largest ports are at their authorised depths and widths. The president's budget does nothing to ensure the competitiveness of American products in world markets. That hurts businesses and costs us jobs," said Mr Gibbs.
President Obama asked $4.7 billion for the Army Corps of Engineers to spend, which was 5.5 per cent less than Congress authorised in 2012, Mr Gibbs said.
While Mr Gibbs said he supported cutbacks in federal spending, many of the Corps of Engineers' activities are "true investments in America because they provide economic return and jobs".
Major General Meredith (Bo) Temple said the Corps of Engineers was restrained by both the need to prioritise dredging projects and the limited amount of money that is appropriated.
"There is no question that constrains us in most cases from providing the authorised dimensions of the channels," General Temple said. "It is our purpose to ensure that the channels are of sufficient dimensions to ensure the safety and economic success of that particular harbour."
Source Shipping Gazette - Daily Shipping News
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