September 17, 2013 | Issue Brief on Energy and Environment
Representative Bill Shuster (R–PA), chairman of the House Transportation and Infrastructure Committee, has introduced H.R. 3080, the Water Resources Reform and Development Act of 2013, this year’s version of the Water Resource and Development Act (WRDA).
The bill contains provisions aimed at eliminating bureaucratic red tape, reducing the project backlog of the U.S. Army Corps of Engineers, and increasing the role of local or private entities in authorized projects. However, it fails in other areas by, for example, failing to narrow the Corps’s sprawling mission.
The committee’s decision to include reform provisions is a refreshing change of course. Yet some of the reforms could either fail to deliver on their promises or introduce new complications:
Notwithstanding the bill’s reform provisions, it should have included much bolder, fundamental reforms, including but not limited to the following.
Fix Harbor Maintenance Tax Issues. While H.R. 3080 would ensure that harbor maintenance tax (HMT) revenues are spent on harbor maintenance projects and not diverted, it fails to address the system’s underlying problems: cross-subsidies, the tax’s inherent flaws, and a lack of project prioritization. Instead, it seeks to distribute HMT revenues as evenly as possible among ports “regardless of the size or tonnage throughput of the harbor.” Yet ports have widely differing maintenance needs.
The set-aside funding for “emerging” ports is simply a subsidy guarantee for ports with less traffic and will come at the expense of ports with more dredging and maintenance needs.
Lawmakers should lay the groundwork now for fundamental reform of the financing of port maintenance. Under the current system, two ships of the same size but with cargo of differing value could pay dramatically different taxes. This creates a cross-subsidization between high-revenue-generating ports and low-revenue-generating ports. Alternative revenue structures, such as user fees, could better reflect the cost of a given port’s maintenance needs. The bill could require this and other options to be studied.
Limit the Corps’s Activities. The Corps needs fewer areas of responsibility and more prioritization—not more money. Despite the Corps’s Civil Works Program having a $6.9 billion average annual budget between 2000 and 2013, its project backlog has grown from 800 projects totaling $46 billion to over 1,000 projects totaling over $60 billion. Further, the Corps received $25.5 billion in supplemental funding alone between 2003 and 2012.
With the Corps’s resources already spread thin but needs among the states increasing, Congress should phase out activities such as recreation, hydropower, beach replenishment, municipal water supply, and even harbor construction and maintenance from the Corps’s mission areas. These activities would be more appropriately and efficiently managed by states, localities, or the private sector.
Increase Local Cost-Share. Because the federal government currently bears most or all of the cost of most new construction projects and ongoing operations and maintenance (O&M) costs, non-federal interests have no incentive to stop asking for more project funding. This makes inefficiencies, parochialism, and waste less likely to be addressed.
Congress should change cost-share structures, such as lowering the maximum federal share for construction of recreation at Corps facilities from 50 percent to zero or for O&M of coastal ports from 100 percent to 50 percent, for example. Cost-share changes in WRDA 1986 reduced overall project costs by one-third and saved taxpayers $3 billion.
While H.R. 3080 contains fewer problematic provisions and attempts more reforms than the Senate bill (S. 601), it still contains numerous shortcomings and questionable provisions.
When the House and Senate go to conference on their bills, the House will begin negotiations with a less-than-perfect bill. House lawmakers should use both the committee mark-up and floor consideration to close the gaps, adding reforms that save taxpayers money and scale back the Corps’s mission in favor of increased state, local, or private-sector responsibility and control.
—Emily J. Goff is a Research Associate in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
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Charles V. Stern and Nicole T. Carter, “Army Corps Supplemental Appropriations: Recent History, Trends, and Policy Issues,” Congressional Research Service Report for Congress R42841, January 17, 2013, http://www.fas.org/sgp/crs/natsec/R42841.pdf (accessed September 16, 2013).
Nicole T. Carter and Charles V. Stern, “Army Corps of Engineers Water Resource Projects: Authorization and Appropriations,” Congressional Research Service Report for Congress R41243, May 6, 2013, http://www.fas.org/sgp/crs/misc/R41243.pdf (accessed September 16, 2013).
Taxpayers for Common Sense and National Wildlife Federation, “Crossroads: Congress, the Corps of Engineers and the Future of America’s Water Resources,” March 2004, p. 39, http://www.taxpayer.net/images/uploads/downloads/Crossroads2004.pdf (accessed September 16, 2013).