WASHINGTON: American seaports’ role in the U.S. economy has grown dramatically larger in the past seven years, according to a recent industry report, bolstering the pro-ports lobby’s case for more federal funds for infrastructure investments.
A congressional committee was expected to take up an amendment to 2016 appropriations to increase the amount of proposed funds that would go to the Army Corps of Engineers to dredge harbors. But if history is any guide, the ports face a tough road to get the money they say they need.
Ports’ “economic impact” in 2014—a calculation based on the sum of tax revenue generated by ports, wages from direct and indirect jobs and revenue produced by importers and exporters—totaled $4.6 trillion, or roughly 26% of the U.S. economy, up from 20% in 2007.
As the pro-ports lobby is happy to point out, trade has picked up with the U.S. economy and so has the number of jobs created by coastal ports.
These statistics come from a recent report prepared by economist John C. Martin for the American Association of Port Authorities. The AAPA, a trade group that represents port authorities in North and South America, is using the figures to bolster its case for more government spending on port infrastructure. The AAPA’s U.S. member ports say they need $28.9 billion in investments, including road, rail and tunnel improvements, by 2025.
Mr. Martin told a friendly audience at a recent AAPA conference in Washington, D.C., that there is a “federal funding crisis” for U.S. ports and inland waterways and urged ports to lobby for a larger share of the federal Harbor Maintenance Trust Fund. The fund redirects revenues collected through an import tax towards dredging improvements to navigational channels. “More than a quarter of GDP depends on our ability to handle cargo through our ports,” Mr. Martin said.
For 2016, the AAPA is urging Congress to fund port improvements using 69% of the revenue raised by the tax, or about $1.25 billion. In 2015, Congress appropriated $1.12 billion, or about 63% of the funds raised by the Harbor Maintenance Tax in 2014. The previous year, Congress appropriated just over $1 billion from the tax, or about 56% of 2013 tax-generated funds.
The AAPA thinks there is a good chance of reaching its goal for 2016, in part because of the speed with which appropriations bills are moving through the U.S. House of Representatives. The Energy and Water Development subcommittee of the House Appropriations Committee approved by a voice vote late Wednesday an amendment to add $36.3 million more to the funds available to the Army Corps of Engineers for harbor improvements, which would bring ports closer to their funding goal.
However, the group faces hurdles. For 2016, the president has asked Congress to appropriate $915 million, or only about 50% of projected revenues from the tax. Congress has a track record of appropriating only two-thirds or less of the funds raised by the Harbor Maintenance Tax to fund improvements at ports, according to Mr. Martin, and lawmaker efforts to reduce the deficit could tamp down spending on infrastructure.
Because money for dredging harbors and other port infrastructure projects comes from the Energy and Water Development appropriation, there is a “tug of war” each year between port interests and the Department of Energy, said Jim Walker, director of Navigation Policy and Legislation for the AAPA.
“It’s a matter of balancing out deficit reduction and giving us an annual increase,” Mr. Walker said. “It’s been tough as far as getting to what the revenues have been, but we’ve been encouraged by the last few years.”
A spokesperson from the office of Rep. Janice Hahn (D., Calif.), who is promoting the increased funding, couldn’t be immediately reached for comment.
