American Recovery & Reinvestment Act of 2009 Waives Cost-Sharing for Barge Industry on our Nation's Inland Waterways

Since the 1986 Water Resources Development Act, barge companies have been required to pay for 50 percent of the cost of any new construction or major rehabilitation (like river dredging for channel work, major work on locks and dams other than operation and maintenance) from the Inland Waterway Trust Fund. The Fund annually receives about $95 million from a 20 cent specific excise tax on diesel fuel for barge transportation on the inland waterways of our navigable rivers.

The Stimulus Bill President Obama signed into law on February 14, 2009 allows the barge industry to use Corps Stimulus construction funds for this inland waterway construction without the required match from the Inland Waterway Trust Fund. This cost-sharing waiver would reward barge companies for steadfast refusal to find the necessary revenues to meet their statutory matching requirements.

Corps reform and clean water advocates should continue to protest this waiver to Congress and the Obama Administration and urge the Administration to direct Stimulus funds only to projects where cost shares are being provided, as is required for all other Corps projects, and urge opposition to this waiver's extension in any future legislation or appropriations bill.

This waiver sets up an unfair bias in Corps construction funding for inland waterways over other types of Corps of Engineers projects, such as flood control, navigation and environmental restoration. All of these types of projects under the bill must still provide their required non-Federal cost-shares. Other water programs in the bill, such as EPA water quality improvement and treatment projects, receive only loans.

Channel dredging and constructing locks and dams that this waiver supports, are among the most costly of all public works-type jobs. A University of Illinois study found Corps of Engineers construction projects to be the least job intensive when compared with rail and mass transit construction, wastewater treatment construction, providing Social Security benefits, providing national health insurance or tax relief.

Abandoning cost-sharing sets a dangerous precedent and threatens critical aquatic environments. Inland waterway construction and constant and expensive dredging is deteriorating the aquatic ecosystems of a number of our nation’s most important rivers. The establishment in the 1980’s of the requirement that beneficiaries of Corps projects must share in their costs has served as a basic test of the value of projects. Waiving the cost-sharing for inland waterways could increase wasteful spending and environmentally-damaging projects with Stimulus funds.

For more information, please contact David Conrad at National Wildlife Federation.