Monongahela locks and dams would get $2 million from spending plan

By Len Boselovic

Pittsburgh Post-Gazette

April 12, 2013 – President Barack Obama’s $3.8 trillion budget proposal calls for imposing annual per-vessel fees on the barge industry to pay for an $8 billion backlog in delayed and over-budget projects, including replacing aging locks and dams on the Monongahela River.

The White House proposal comes as a measure by Sen. Bob Casey, D-Pa., to bolster funding for the work and shift more of the costs to taxpayers could be taken up by the U.S. Senate as early as next week.

The budget proposal Mr. Obama submitted Wednesday includes $4.7 billion for the U.S. Army Corps of Engineers civil works program, which includes operating, maintaining and replacing more than 200 locks and related dams on the nation’s rivers. That is nearly 6 percent less than was called for in the last budget Congress approved for the fiscal year that ended in September.

The $4.7 billion includes $2 million for replacing locks and dams on the Monongahela River at Braddock, Charleroi and Elizabeth, a project that typifies the delays and cost overruns plaguing the nation’s deteriorating locks and dams.

When the Mon River project was authorized by Congress in 1992, it was expected to be completed in 2004 at an estimated cost of $750 million. Current estimates are the project will cost $1.7 billion and will not be completed until 2033.

Providing $2 million annually for the work is one reason why costs have escalated.

"What you’re really doing is mothballing the project. You’re not really advancing the project," said Peter Stephaich, chairman of Campbell Transportation, a Houston, Pa., company that operates a fleet of about 500 barges.

Mr. Stephaich is scheduled to testify next week before a House subcommittee considering ways to fund waterways improvements.

In a statement released by his office, Mr. Casey said the White House budget provides inadequate funding for the Corps’ operations in the region, something that would be remedied by passage of his proposal.

The proposed budget would provide $110 million for Corps facilities in the Pittsburgh region. The proposal includes $30.9 million for operating and maintaining Ohio River locks and dams in the region, up from the $20.4 million the White House proposed last year.

Corps officials said more than 66 million tons of goods moved on the region’s rivers in the fiscal year that ended Sept. 30.

In addition to delaying and increasing the costs of building new locks and dams, funding shortfalls have meant the facilities are closed for repairs more often. That causes delays and raises costs for barge operations that each year move about 550 million tons of coal, grain and other commodities on the nation’s rivers. The increased costs are passed on to consumers.

Industry and Corps officials warn the failure of a lock or dam, such as the 106-year-old dam at Elizabeth, could close the river to barge traffic and force goods to move by rail or highway.

Pressure to reduce the federal budget deficit has prompted the White House and Congress to seek additional sources of funding for river infrastructure projects.

Mr. Casey’s bill would increase the diesel fuel tax that barge operators pay into a trust fund to 29 cents per gallon from 20 cents, the level that it has been since 1995. The federal government matches money that the tax generates, about $85 million annually, and the $170 million total is used to replace or make major repairs to aging locks and dams.

River industry officials say Mr. Casey’s measure would boost annual funding to about $380 million. But it would also put a bigger load on taxpayers by shifting costs for dam projects from the trust fund to the Corps’ general budget. The proposal also would impose caps on how much money from the trust fund could be used to cover cost overruns on lock projects.

Key provisions of Mr. Casey’s proposal are expected to be attached to a water resources bill that could reach the Senate floor next week.

Mr. Obama wants the industry to bear a greater share of the burden. His proposal for an annual per-vessel fee would increase the amount of money that barge operators provide for projects financed by the trust fund.

A Corps spokesman said the White House budget does not include any revenue from the proposed fee for the fiscal year that begins Oct. 1. The size of the fee would be determined by regulations adopted after Congress approved the measure, he said.

But an analyst for Taxpayers for Common Sense said the White House estimates the fee would generate $1.1 billion over 10 years. The watchdog group said the barge industry is one of most heavily subsidized forms of transportation, saying taxpayers cover more than 90 percent of the costs of operating, maintaining and replacing locks and dams.

Mr. Casey’s bill and a similar measure introduced in the House would shift even more of those costs to taxpayers, said Joshua Sewell, an analyst with Taxpayers for Common Sense. He urged the White House "to put some muscle behind their proposal."

"They just can’t float a solution and let it drift. They need to go and sell it to Congress and the American public," Mr. Sewell said in an email.

Waterways industry officials say the fees would unfairly put the burden for maintaining the system on about 300 companies in the industry, even though many other groups benefit. The beneficiaries include consumers who rely on water drawn from rivers and the recreational boating industry.

Last year, the White House’s proposed budget called for raising $1.1 billion over 10 years by charging barge operators fees for passing through locks. Presidents as far back as Franklin Roosevelt have proposed lock fees, but the industry has always opposed them and Congress has never approved them.

Len Boselovic: lboselovic@post-gazette.com or 412-263-1941 .