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Waterways funding fuel tax piggybacks onto ABLE Act

 

By TIM ALEXANDER

Illinois Correspondent

 

PEORIA, Ill. — Agriculture and transportation groups are among those lauding the Dec. 3 U.S. House passage of the ABLE Act (H.R. 674), which includes a provision to increase the user fee, or fuel tax, barge and towing companies pay into the Inland Waterways Trust Fund.

The bipartisan bill passed by a vote of 404-17 and is now in the hands of the Senate.

The Achieving a Better Life Experience (ABLE) Act allows disabled people to establish tax-exempt savings accounts to be used for covering costs for housing, transportation and other expenses associated with their treatment. Attached to the ABLE Act is a provision to raise the Inland Waterways Tax paid on diesel fuel used by barge companies, to help underwrite the costs of new lock and dam construction or major rehabilitation projects. The tax would increase from 20 to 29 cents per gallon under the provision.

"The 9-cent increase in the per-gallon barge fuel fee is something that is supported not only by the nation’s soybean farmers, but also by the commercial barge and towing operators who pay it," said Roy Gaesser, president of the American Soybean Assoc.

"We all support this as a way to dedicate funds to new waterways infrastructure construction and major rehabilitation of the inland waterways system through the Inland Waterways Trust Fund."

Inland waterway users and customers, including the nation’s agricultural interests, have promoted an increase in the Inland Waterways Tax for many years and, according to the Illinois Corn Growers Assoc. (ICGA), it is something the state’s corn farmers support. An increase in the user fee would better allow the United States to remain a competitor in the global ag marketplace, according to ICGA.

"The ABLE Act is a bipartisan bill that our entire Illinois delegation can feel good about supporting," tweeted Lindsay Mitchell, special project coordinator for ICGA, in a Dec. 6 "Daily Update" to members."Not only do farmers need a ‘yes’ vote to get their grain to export markets more efficiently, but all Illinoisans need a ‘yes’ vote to ensure that the goods we rely on – like rock salt for the Chicago roads in the winter – will get delivered in a timely fashion."

The Inland Waterways Tax generates between $75 million-$85 million per year that is matched by the federal treasury, boosting its total value to between $150 million-$170 million annually. A raise in the Inland Waterways Tax by 1 cent per gallon is estimated to produce additional revenue of between $3 million-$4 million per year – meaning a 9-cent raise in the fuel tax would equate to $27 million-$36 million in additional revenue annually.

"If the Senate passes and President Obama signs this legislation, it will provide needed funding to help improve our nation’s increasingly dilapidated lock and dam inventory," noted Mike Steenhoek, executive director of the Soy Transportation Coalition, in an email.

"It truly is a reflection of the importance of our nation’s locks and dams that barge companies, and the customers who will ultimately absorb much of these costs, have promoted a tax increase that will be imposed on them."

The additional funds generated by the increase would also boost the general economy by putting skilled tradespeople to work constructing new locks and dams and improving river infrastructure, proponents say.

12/10/2014