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February 7, 2006

Ports critical of FY 2007 budget

Port industry leaders aren't happy about the Administration's recommended changes to the Department of Homeland Security's Port Security Grant program and under-funding of the portion of the U.S. Army Corps of Engineers' Civil Works program that provides navigation access to ports.

The Administration's 2007 budget proposal recommends lumping the security infrastructure needs of seaports with those of trains, trucks, busses and other public transit into a new and consolidated Targeted Infrastructure Protection program (TIP).

"The federal share of the seaport facility security funding partnership needs to be increased, not reprogrammed and diluted," says Kurt Nagle, president and CEO of the American Association of Port Authorities (AAPA).

"Another top federal priority," says Nagle, "should be to adequately fund the U.S. Army Corps of Engineers to keep the nation's deep-draft channel maintenance projects on schedule. Simply put, we believe all authorized channel projects with positive benefit-cost ratios should be maintained at their authorized project depths."

"When the Administration proposed lumping port security into the TIP last year, the proposal was debated in the Congressional appropriations process and rejected," notes Nagle. "It's not in the nation's best interest to dilute the focus on maritime security."

Since its inception in 2002, says AAPA, the Port Security Grant program has provided much-needed support to address immediate security needs and assessments. But federal money allocated in the first five rounds of the program --about $708 million--accounted for only about one-fifth of what seaports identified as needs. AAPA has urged the Administration and Congress to annually fund the program at the $400 million level. AAPA also urges DHS to allow all U.S. port facilities that handle international cargo to be eligible to apply for port security grant assistance.

Although airports, first responders and research and development centers receive most of the federal attention and funding for security and terrorism prevention, seaports--which support five million jobs and annually handle $2 trillion worth of cargo and more than 8 million cruise ship passengers --remain largely under-funded at the federal level, points out AAPA. As a result, they must divert limited port resources to pay for enhanced security, often at the cost of improving facilities to handle fast-growing trade volumes.

The Administration's budget request also seeks an amount for the Corps of Engineers' Civil Works program that AAPA says is insufficient to meet the navigation needs of America's seaports. While at least $750 million in funding from the Harbor Maintenance Trust Fund is needed for navigation channel maintenance, the Administration's budget calls for $707 million.

"We are pleased that the President's latest budget request represents an increase of $33 million over last year's request," says Nagle "Yet, the budget still falls short of what is needed to adequately maintain the nation's ports and harbors."

AAPA Chairman Bernard Groseclose, who is president and CEO of the South Carolina State Ports Authority says it's particularly troubling that channel maintenance is underfunded since the money to maintain the country's federal navigation channels has been "prepaid" by the users of the channels via payment of a harbor maintenance tax on imports and domestic cargo shipments. He says AAPA will continue to work with the Administration and Congress this year and in future years "to help put the 'trust' back into the Harbor Maintenance Trust Fund" and to assure that federal budgets for the Corps' Civil Works program are adequate to meet the needs of business and the port industry.

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