Magazine of the Seaway Port Authority of Duluth * Spring, 1997 

Feds miss the boat
It would have been imprudent—even for a port director—to leap from the witness table, sprint across the hearing room and plant a big kiss on the committee chair's cheek.

But I must confess to temptation.

A state transportation subcommittee had just finished reviewing a port funding bill and the chair said she supported it because, among other things, "of the environmental benefits of waterborne transportation."

It took a moment to register. Even though we've been preaching for years about how the carriage of oods bv water has clear environmental advantages over other forms of commercial transportation, I had long since concluded no one was really listening—at least among the policy makers at state and federal levels.

I've been saying it for so long, I can wake up at three a.m. from a dead slumber and promptly give the recitation: "Waterborne commerce uses less energy, causes less environmental degradation, generates less waste disposal, is responsible for fewer accidents and creates the least societal disruption. And, for good measure, it's almost always cheaper."

The message is simple enough— and continues to be validated by various independent analyses—but we constantly struggle to get it recognized bythe people who make tax policy and write our regulations.

 

 

It has utterly escaped those in the federal government whose mission in life is to dream up new ways to tax things without using the word "tax." The most recent illustration is the proposal by the Office of Management and Budget to slap a "user fee" on ships for Great Lakes icebreaking services.

Although things may change, the draft legislation called for a 63-cent-per-ton cargo tax on vessels using the Great Lakes prior to April 15 or after Dec. 15. For a 1,000-foot laker carrying 65,000 tons of iron ore pellets, this would be a staggering $41,000 per trip.

Our Port's congressmen, Jim Oberstar and David Obey, have led the political charge against the tax while the Lake Carriers' Association, representing the U.S. laker fleets, has assumed its customary point position in leading the non-elected opposition.There are numerous arguments about why this is a bad tax:

Iron ore for steelmaking, western coal for electric power, bulk grain for domestic and overseas food and feed, limestone for various mining, agricultural and chemical uses—all shipped with early- and late-season icebreaker assistance—are products of national, not regional, significance.

If these cargoes are not delivered on a timely basis, steel plant and other industrial production shutdowns and layoffs would ripple throughout the economy far beyond the Great Lakes.

The American steel industry, Minnesota and Michigan pellet producers and the U.S. lake fleets already pay more than $1 billion in federal corporate taxes.

There is a common-benefit, common-burden principle here, one related to snowplows keeping winter traffic moving on our streets and highways. Everyone benefits, and costs are shared through conventional taxation.

The list goes on—including the one regarding the waterways' inherent energy and environmental advantages. That argument, even though it seems to elude most folks, is equally important.

Think about it. As a matter of policy, does the government really want excessive taxation to force waterborne freight onto railroads and highways? Have the tax agents considered the boomerang effect of promoting more energy consumption or of creating more pollution and waste disposal problems? Of having more freight-related accidents? Of causing more on-land congestion? Of driving up consumer prices?

Maybe not in Washington, but the message may finally be taking root in Minnesota. Let's see. We have 201 legislators in the state and ....

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for more information, contact:
Lisa Marciniak
Port Promotion Manager
Duluth Seaway Port Authority
1200 Port Terminal Drive
Duluth, MN 55802
Tel: (218) 727-8525     Tel: (800) 232-0703     Fax: (218) 727-6888
©1999 Duluth Seaway Port Authority
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