Op-ed By Rick Calhoun, Cargill, St. Louis Post-Dispatch, June 15, 2017
Infrastructure has been in the national spotlight for months, as President Donald Trump touts his $1 trillion plan. Most of the time, infrastructure discussions have been about highways, railways, water treatment systems, or bridges. But on June 7, President Trump brought laser focus to the needs of the inland waterways lock and dam infrastructure that is, too often, out-of-sight, out-of-mind, when he made a speech on the Ohio River in Cincinnati.
Many were elated to hear him describe the waterways as “critical corridors of commerce” and an “American thoroughfare.” He offered no specifics on how this critical infrastructure would be funded, beyond suggesting partnerships between state and local governments, the federal government and taxpayers.
Published on the same day as the president’s historic visit, the Post-Dispatch editorial “Trump’s infrastructure plan could signal blues for barge industry” said, “Commercial customers have to pay their fair share of the infrastructure they use,” referring to commercial barge operators on the inland rivers.
There is a disconnect in this editorial about freight shipping reality that might benefit from background facts.
Prior to 1978, the federal government paid 100 percent of the costs to maintain the inland waterways, recognizing that rivers didn’t belong to one entity. The waterways are, and always have been, a national treasure. Locks and dams keep channels navigable, offering benefits like hydropower for electricity, flood prevention, municipal and industrial water supply, national security and recreational boating opportunities. Yet, none of these beneficiaries pay one penny into a dedicated tax that only inland towboat operators transporting barges loaded with millions of tons of freight from American family farms, steel mills, coal mines and manufacturing facilities do pay.
Congress first imposed this tax on commercial towing operators in 1978 at 10 cents per gallon of diesel fuel burned while operating that is deposited into the Inland Waterways Trust Fund. That money is matched by federal dollars to pay for lock and dam capital improvements. In 1986, commercial operators, supported by shippers, agreed to pay 20 cents per gallon. In 2014, realizing more infrastructure investment was needed, these operators successfully lobbied Congress to raise their tax by 45 percent to 29 cents per gallon. There were few, if any, begging Congress to raise their taxes. Then — or now.
Today, the debate over funding the nation’s infrastructure and its locks and dams is forefront. The president did not offer specifics in his visit to the river, but his fiscal year 2018 budget contained a proposal to double the amount commercial operators currently pay. Repeat: Commercial operators are the only users who pay a tax, and now they are being asked to double it.
Despite the infrastructure needs on the inland waterways, the budget request proposes to spend only a small fraction — 12.3 percent — of total revenues coming into that trust fund. Why should operators be asked to pay double, while the government only intends to spend just above 10 percent of the total amount being raised, as a way to pay for other government programs with the money?
Commercial operators are levied the tax, but Americans like Missouri’s wheat, corn and soybean farmers and other users are paying for it. Agriculture commodities are sensitive to price fluctuations, and higher fees affect farmers’ bottom lines. And farmers would get taxed coming and going as fertilizer moving north will transit the same locks as southbound grain. When the U.S. fights in the worldwide arena for market share, do we want to further handicap our farmers?
The U.S. transportation system is one of the reasons our nation competes successfully in the world. At stake is losing market share for corn, soybeans and other products if we price-out the capacity and competition the waterways provide to shippers versus other more expensive transportation modes.
Waterways operators and shippers seek equitable, fair proposals to modernize our waterways that don’t hamstring vulnerable economic contributors like Midwest farmers, coal miners, steel producers or manufacturers.
The river is critical to Missouri’s economy. If you unfairly burden navigation with a disproportionate system cost, business will decline, jobs will be lost and traffic congestion will grow. If St. Louis won’t champion the river, who will?
Rick Calhoun is president of Cargill’s marine operations in the U.S.