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Marine Log

February 7, 2008

AWO slams "lockage fee" proposal

The American Waterways Operators is slamming a proposal in the administration's FY2009 budget that would phase out the fair inland waterway fuel tax system and replace it with a "lockage fee" to raise revenue.

Not only would a lockage fee disproportionately target certain users of the inland waterways system, says AWO, but it would not fix the broken system that spends Inland Waterways Trust Fund (IWTF) monies inefficiently and ineffectively.

Noting the broad benefits of the nation's waterways, from commerce to recreation to flood control, AWO President & CEO Tom Allegretti explained that "While the fuel taxes are being fully paid, the funds are not being spent efficiently, resulting in escalating costs and decade-long delays. Inadequate budgeting, planning, and project execution are the main reasons for the projected Trust Fund deficit, not inadequate user fees. Increasing user fees at this time would unduly burden the industry to solve a problem that is not our doing."

Under the current fuel tax system, all commercial users of the inland waterways contribute based on the amount of fuel that they consume, which raises about $90 million per year for the IWTF. The Trust Fund is then used to pay for half of all new capital construction and major rehabilitation projects on the inland waterways system. Under the lockage fee proposal, some users who transit many locks would pay a disproportionate share of the costs, while other users could end up paying nothing at all because their vessels do not pass through a lock.

"Given the flawed business model that the federal government now uses, instituting more fees and taxes would result in additional money being spent inefficiently while needed projects are delayed and costs continue to escalate," said AWO Chairman of the Board Royce Wilken. "We should first carefully examine the entire system of planning, authorizing and funding inland waterways projects and make this process more efficient before considering new taxes."

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