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OMB Underfunds Civil Works; U.S. Waterways at Risk

"We are beginning to hear and feel the first effects of the Administration's recently released FY2005 budget request for the U.S. Army Corps of Engineers," said Worth Hager, president of the National Waterways Conference, Inc., (NWC) on February 10. "The slowdown in the Corps' civil works program has already begun, and termination letters for some on-going projects have been sent. Communities and stakeholders all over the country are crying foul," she said.

Hager was commenting on the shortfall in the budget for water resources projects which the Corps had scheduled for fiscal year 2005.

"The FY2004 budget was woefully inadequate, even though Congress attempted to restore some of Office of Management and Budget's (OMB) funding cuts. This FY2005 request has people panicking. OMB's policies have already harmed communities that are on so-called 'low-use' waterways, and now OMB is taking it a step further," said Hager.

Communities that partner in funding beach nourishment projects are among the first to feel the heat. OMB is instituting a new policy which ends continued cycles of beach nourishment, the ecologically-preferred alternative to hard structures. In addition, OMB listed 41 ongoing projects to be cancelled, although letters may not be sent to the unsuspecting communities. "This list even includes flood control and water supply projects in impoverished areas," said Hager, referring to the Levisa and Tug Forks flood damage reduction project in West Virginia, the Dallas Floodway Extension in Texas, the Cumberland County Water Supply Project in Tennessee and the Elba Levee Rehabilitation project in Alabama.

Many of the 41 projects black-listed by OMB are championed by waterways stalwarts on Congressional appropriations committees.

"OMB seems to feel that the best way to get rid of the construction and operations and maintenance backlog is to cut the program and put people out of work," stated Robert W. Portiss, port director at the Tulsa Port of Catoosa and chairman of the National Waterways Conference, Inc. "But, we will only get rid of the construction and operation and maintenance backlog if the program is funded at an adequate level," he said.

"In 2003, the Corps expended $4.905 billion -- which means OMB's budget request of $4.215 billion will not only delay or terminate projects, it will cost U.S. taxpayers millions of dollars in benefits-foregone and higher transportation bills. In 1986, in constant dollars, the Corps program was at a $6.6 billion level, and the Corps mission has since expanded. We're not moving ahead, we're falling behind," said Hager.

Hager went on to say, "The Corps' mission is diverse -- navigation, flood damage reduction, hydropower, water supply, recreation and environmental restoration. This budget request gives short shrift to all of those purposes. It will hurt the lives and livelihoods of our fellow Americans--from fishermen and loggers in the Pacific Northwest to farmers in the Upper, Middle and Lower Mississippi Valleys, electric utility consumers in the Ohio and Missouri River Valleys, petroleum companies on the Gulf Coast, recreational boaters in the South Atlantic, beach communities on our coasts, and all of the other citizenry who are affected daily by one of the programs of the Corps of Engineers. Our waterways give value for the money," she said.

OMB documents indicate that each dollar spent on navigation operation and maintenance returns an average of $14.10 in transportation savings. Every dollar spent on flood control saves America $6 dollars in future flood damages. In addition, a large number of projects are cost-shared with users and local communities, who potentially will now have their bond status put at risk.

"OMB should wake up to the fact that countries in the European Union, South America and Asia are investing in their waterways because they are economical and environmentally-friendly --they certainly understand that a solid waterways infrastructure can contribute to a nation's well-being, " she said.

The National Waterways Conference supports a civil works budget of at least $5.5 billion in FY2005 and $6.6 billion in FY2006. NWC estimates that fully funding the Corps' civil works program at capability levels-to keep project construction on schedule and to realize benefits without undue delay-would require an expenditure of over $8 billion annually.

"I am aware of the president's budgetary priorities," said Hager, "and one of those is strengthening the economy. Fully funding the projects on our nation's waterways offers the president a unique opportunity to take advantage of the high productivity level of our nation's contractors, thus providing needed economic job growth, as well as enhancing the transportation network for international trade. At the same time, it provides the shippers of America's foundation building blocks -- steel, coal, fertilizer, sand and gravel, cement, salt, petroleum, chemicals, etc. -- a safe, cheap and eco-friendly transportation alternative. Our infrastructure is literally crumbling before our eyes due to insufficient

funding. But, with proper investment, our waterways have the potential to help grow our economy, help ease our nation's growing congestion problem, and provide a finer quality of life, " she said.

"There is one bright spot in the OMB proposal," said Donald G. Waldon, administrator of the Tennessee-Tombigbee Waterway Development Authority and Vice-Chairman of NWC.

"OMB learned their lesson and didn't try to divert funds from the Inland Waterways Trust Fund (IWTF) and the Harbor Maintenance Trust Fund (HMTF) to other purposes. We were successful in our efforts last year to reject that misguided proposal."

The IWTF is supported through a 20 cents/gallon fuel tax on barge lines and pays for one-half the cost of construction and major rehabilitation of locks and dams. The HMTF is used to maintain adequate depths at coastal ports and waterways segments not subject to the fuel tax.

NWC is the nationwide "umbrella" water resources organization of waterways shippers, industry and regional associations, port authorities, barge lines, shipyards, economic development agencies and others joined together since 1960 to promote a greater understanding of the public benefits of the waterways system and its contributions to a sound economy, industrial and agricultural productivity, regional development, environmental quality, energy conservation, international trade, national security and the overall public interest. The organization’s website is: www.waterways.org.

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