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Federal Budget Shortchanges Channel Maintenance

Maintenance Dredging Funds Unspent While Crisis Brews



The American Association of Port Authorities expressed alarm on February 3 that the Administration’s FY05 budget for the U.S. Army Corps of Engineers’ Civil Works projects fails to adequately fund critical deep-draft navigation projects. This is an ongoing problem for the nation’s maritime transport system, which is facing imminent crisis as a result of continued insufficient federal funding for the Corps of Engineers to perform channel maintenance dredging.



Especially troubling is misuse of the Harbor Maintenance Trust Fund (HMTF), which receives ad valorem taxes paid on imports and coastwise movements. The HMTF was established by Congress in 1986 to recover costs of maintaining the nation’s deep-draft navigation channels. Rather than releasing the funds for their intended purpose, however, a significant portion remains idle. In fact, surplus funds in the HMTF have grown from year to year. Based on the FY05 budget just announced, the fund surplus is expected to grow by an additional $377 million between FY04 and FY05, to more than $2.6 billion.



"While denied access to these much needed funds, our nation’s waterways are suffering the effects of inattention," said AAPA President Kurt Nagle. "Unless this situation is rectified, America will soon face dire consequences as our system of transport for global trade is seriously compromised."



As a case in point, a major channel connecting east New Orleans to the Gulf of Mexico is filling with silt due to insufficient funds to dredge it. As a result, some deep-draft ships are no longer able to make it into the port. The Louisiana shipping industry estimates that the U.S. Army Corps of Engineers needs to invest $23 million into dredging the state’s three main shipping routes or face losing business – or even worse, ships running aground and spilling their cargo. The scenario is mirrored throughout the nation, with dredging needs going alarmingly unaddressed.



"Channel maintenance needs are increasingly mounting to crisis proportions with each year that passes without sufficient funds for dredging," Nagle said. "We strongly urge the administration and congress to release the HMTF funds in 2005, or face the prospect of crippling America’s waterways and rendering them unable to support the nation’s projected growth in international trade," he said.



The American Association of Port Authorities was founded in 1912 and today represents 150 of the leading public port authorities in the United States, Canada, Latin America and the Caribbean. In addition, the association represents 300 sustaining and associate members, companies and individuals with an interest in the seaports of the Western Hemisphere. AAPA port members are public entities mandated by law to serve public purposes. Port authorities facilitate waterborne commerce and contribute to local, regional and national economic growth.


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