By NANCY LYBARGER

Indiana Correspondent

MT. VERNON, Ind. — Funding for construction and rehabilitation of existing locks and dams is largely covered by the Inland Waterways Trust Fund; however, expenses ran higher than revenue for the years 2002-09 and income has been flat the past two years, according to a report by the U.S. Army Corps of Engineers.

The trust fund was authorized by Congress in 1978 to fund construction and rehab for inland and intracoastal waterways. The report indicated a change in 1986 so cost would be shared equally between the trust fund and resources contributed by the commercial navigation industry and the general treasury.

The trust fund generates resources through a fuel tax levied on towing companies. The rate has been 20 cents per gallon since 1995. Now one group has completed a study and has recommendations to make that money go further.

Mark Carr spoke recently at the annual Ohio River Barge Tour (see related article). With the Channel Design Group, Carr said it doesn’t want to change the amount paid into the fund, but who pays.

“We now pay tax on fuel that powers tow boats,” he said. “That’s the only source of funding now for the Inland Waterways Trust Fund. That tax produces on average, $85 million per year. The feds match that 50-50.”

The tax is not generating enough revenue to meet the construction and rehab needs for the waterways, so the Channel Design Group is proposing a change in the formula.

He likened the quantity benefits to the bump in property values homeowners receive by building on the waterfront. He said the group’s findings indicate the gross annual benefit of building around a stable lake to be about $8 million.

The economic advantage for commercial industries to ship on the waterways is estimated at $17 billion a year, Carr said.

Other economic advantages he mentioned included $3 billion to the sugar industry; $2,200 per acre for irrigation on the arid side of Washington state (with a net farm loss of $30 per year for that area if irrigation is lost); power plant water supply, $1 billion; recreation, $385,000 in annual lock through services; $16 billion in recreational areas; $5 billion from electric power generation; and $10 billion in flood prevention.

Carr said the advantage netted by sewer treatment facilities has not yet been quantified. “If that flow dropped away, plants would have to be re-engineered and retrofitted and cities and towns would have to find another place to discharge,” he said.

The Channel Group estimates $53 billion in annual benefits to populations other than shippers. “That’s the justification to change the formula,” he said.

Currently, there is a proposal on the table to increase the fuel tax. Carr said the Channel Group’s recommendation would make that unnecessary to increase revenue, just by all users sharing in the benefits of the rivers and intracoastal waterways.