Resolution of the
Upper Mississippi River Basin
Association
Opposing Proposed Increases
in the Inland Waterways Fuel Tax
and
Supporting Justified
Infrastructure Investment
in the
Upper Mississippi River System
December 11, 1998
WHEREAS, the United States
currently imposes a tax of 24.3 cents per gallon on fuel for commercial vessels
on the nation's inland waterways, 20 cents of which is deposited in the Inland
Waterways Trust Fund and 4.3 cents of which is dedicated to deficit reduction;
WHEREAS, there have
been several proposals in recent years to increase this Inland Waterways Fuel
Tax by $1.00, or 411 percent, from its current level of 24.3 cents per
gallon to $1.243 per gallon;
WHEREAS, revenue
generated by the fuel tax and deposited into the Inland Waterways Trust Fund is
used to provide the required 50 percent non-federal cost-share for new
construction and major rehabilitation of navigation infrastructure;
WHEREAS, the U.S. Army
Corps of Engineers has determined that the current fuel tax structure is
sufficient to support priority navigation improvements with construction starts
through 2013, including projects that are currently authorized as well as
several that are under study;
WHEREAS, the United
States faces increased competition from Latin America in international grain
markets and is competitive in global markets due in part to our low-cost river
transportation system;
WHEREAS, Midwestern
farmers depend on international markets for their financial viability and the
Upper Mississippi River System is the most efficient means for many of these
farmers to transport their crops to international markets;
WHEREAS, an increase of
$1.00 per gallon in the fuel tax would increase Midwestern farmers' cost of
using waterway transportation by approximately 10 cents per bushel for
shipments originating in the northern reaches of the system;
WHEREAS, the Upper
Mississippi River System is the leading carrier of export-bound grain in the
United States, transporting 54 percent of all U.S. corn exports and 40 percent
of all soybean exports;
WHEREAS, an increase in
the fuel tax would likely force additional tonnage onto
already-congested highways and railroads, thereby increasing highway repair
costs and raising public safety and air pollution concerns;
WHEREAS, the inland
waterways provide a vital regional, national, and international transportation
system, with economic benefits to the nation as a whole; and
WHEREAS, farmers and
others who ship products on the Upper Mississippi River System contribute
almost 40 percent of the revenue flowing into the Inland Waterways Trust Fund,
while only about 15 percent of expenditures from the Fund have gone to
infrastructure improvements on the Upper Mississippi River System;
NOW, THEREFORE, BE IT RESOLVED, that the member states of
the Upper Mississippi River Basin Association do not support any increase in
the Inland Waterways Fuel Tax, on the grounds that such an increase is
unnecessary and would adversely affect the profitability of farmers in
Illinois, Iowa, Minnesota, Missouri, and Wisconsin;
BE IT FURTHER RESOLVED, that the Upper Mississippi River
Basin Association believes adequate funds should be available for Upper
Mississippi River System navigation improvement projects with demonstrated
economic justification and environmental acceptability, given the region's
considerable contributions to the Inland Waterways Trust Fund; and
BE IT FINALLY RESOLVED, that the Upper Mississippi River
Basin Association calls upon Congress and the Executive Branch to inform and
consult with the Upper Mississippi River Basin Association and its member
states prior to initiating any increase in waterway user taxes.
Unanimously approved
by the Upper Mississippi River Basin Association via conference call on
December 11, 1998.