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February 3, 2004

AAPA says Bush FY 05 Budget underfunds port security

The American Association of Port Authorities (AAPA) has expressed "great concern" that the Bush Administration FY 05 budget request "provides no federal funds to meet port facility security requirements."

The AAPA says this is particularly alarming because federal support for port facility security is authorized in the Maritime Transportation Security Act (MTSA), and has been recognized by Congress with $493.2 million in port security grant appropriations since September 11, 2001. "With port security acknowledged as a clear federal priority, AAPA is very disappointed that the Administration has not shown its support of port facilities in the budget for the coming year."

"While we're encouraged that some aspects of the MTSA have received support in the 2005 budget, it's disheartening that port facilities have been neglected as a key player," said AAPA President Kurt Nagle. "Port authorities and facility operators are expected to comply with the new security regulations, at a cost of billions of dollars. Federal help is simply imperative in order to make that expectation reality."

Nagle says ports have spent hundreds of millions of dollars to boost security since 9/11, and expenses continue to skyrocket. According to U.S. Coast Guard estimates, port facilities will need to spend $5.4 billion on enhanced security measures over the next ten years to comply with new federal regulations mandated by the Maritime Transportation Security Act (MTSA), with $1.125 billion of that projected for the first year alone.

"There are just no two ways about it--ports need significantly greater federal help to keep America's water borders secure," said Nagle.

To help ports implement heightened security requirements, MTSA calls for a federal grant program for port security. Since September 11, 2001, Congress has appropriated $493.2 million for the port security grant program.

"While this federal assistance has helped, it amounts to less than one quarter of the needs identified in grant applications," Nagle said.

He says increased federal help is key to ensuring ports can address enhanced security demands. AAPA urges an annual federal funding level of $400 million for the port security grant program for port authorities and facility operators to make the enhancements required under the new regulations.

While ports are challenged to manage security expenses of unprecedented magnitude, Nagle says that ports must spend about $1.7 billion per year on operations and another $1.5 billion annually on capital improvements to support burgeoning trade growth.

"Now enormous new expenses for port security are added to the equation," said Nagle, "and public ports' financial resources pale in comparison to the sizable needs. Both physical and economic security are paramount to the country's wellbeing, and America can't afford to put its ports in the position of sacrificing one for the other. Ports are working diligently to comply with MTSA security regulations, but without adequate federal assistance the hidden danger is that our country's economic foundation may suffer the ultimate blow."

While disappointed in the lack of funding for port facilities, AAPA says it is pleased that the Department of Homeland Security (DHS) received a 10 percent increase over the 2004 budget, with several U.S. Coast Guard and Customs and Border Patrol maritime security programs benefiting from the boost in funds. For example, both the Container Security Initiative (CSI) and the Customs Trade Partnership Against Terrorism (C-TPAT) program received increased funding, and the recently-launched United States Visitor and Immigrant Status Indicator Technology (US-VISIT) program budget was increased. DHS also included $46 million for a new grant program under the Office of Domestic Preparedness' Urban Area Security Program to implement area security requirements called for in the MTSA. The U.S. Coast Guard received $100 million to carry out the MTSA, as well.

"Because DHS takes the lead in maritime and port security, it is vital that these maritime programs be properly funded," said Nagle. "But until port facilities receive adequate assistance as well, a critical homeland security component remains alarmingly overlooked."

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