Last week, the Georgia Ports Authority approved allocating up to $3 million for maintenance of the shipping channel to the Port of Brunswick, marking the second-straight year the GPA has had to supplement federal funds for this project.
While the decision by the GPA board to dedicate funds for maintaining the waterway to the nation’s second-busiest seaport in terms of shipping automobiles was the right one, it is said to have been made with some reluctance.
That’s because the Port of Brunswick gets back from the federal government only a portion of the fees that it generates for the maintenance of the shipping channel through the Harbor Maintenance Tax.
The HMT was created by the Water Resource Act of 1986 and was intended to be collected from those who benefit from maintenance of U.S. ports and harbors to pay for the cost of their operation and maintenance.
The HMT, which first was imposed April 11, 1987, is levied on importers and domestic shippers using ports on the Great Lakes and coastal areas. Originally, exporters also were required to pay the fee, but a Supreme Court decision in 1998 ruled it to be unconstitutional.
The HMT only is collected on imports, domestic shipments, passengers and Foreign-Trade Zone admissions and is assessed at a rate of 0.125 percent of cargo value ($1.25 per $1,000). The fees go into the Harbor Maintenance Trust Fund, through which Congress appropriates them for harbor dredging.
Herein lies the problem: Congress does not appropriate the funds like it should.
The most common complaint regarding the HMT is that the busiest ports contribute the most while not receiving enough back for operations and maintenance.
While the Brunswick port requires around $6 million per year for ongoing operations and maintenance, it is set to receive only between $1-1.5 million in HMT dollars for operations and maintenance. This is why the GPA responsibly agreed to fund up to $3 million for operations and maintenance of the Brunswick port.
However, combining both of these funds still will not net Brunswick the funds it needs for full yearly operations and maintenance. The lack of full operations-and-maintenance funding over the years has put the Brunswick port into a situation where it will take between $15 million-$20 million to bring the shipping channel to where it needs to be.
But the biggest problem with the HMT is that not all of the fees are being used for operations and maintenance.
For instance, in fiscal year 2010, the HMT generated and collected $1.2 billion yet only spent $793 million on its intended purpose of dredging and maintenance. The remainder of the money went into the Harbor Maintenance Trust Fund as surplus and is being diverted to plug holes in the federal budget deficit.
This year, it is estimated that of the $1.8 billion generated by the HMT, only half will go back to the ports for operations and maintenance.
With the U.S. Army Corps of Engineers estimating that full-channel dimensions are available at the nation’s 59 busiest ports less than 35 percent of the time, concern now grows that shipping rates may increase due to vessels carrying less cargo to reduce their draft or having to wait for high tide before entering.
Thankfully, Congress has finally recognized this problem and with the passage of the Water Resources and Development Act of 2014, and has committed to incremental increases in the usage of the HMT over a 10-year period to send all of the fees back to the ports for operations and maintenance by 2025.
While this is good news, it still is not a done deal. Congress still must pass appropriation bills for this purpose and adopt a budget each year.
And if recent history in that area is any indication of future action, don’t hold your breath too long.
Carter, who is running for Congress, can be reached at on Facebook at facebook.com/buddycarterga.