Program

Increased Inland Waterway Subsidy (over 5 years)

Category

Water

Subsidy Type

Finance

Committees of Jurisdiction

House Transportation and Infrastructure Committee

$ FY 16 Budget Score (in mil.)
$2,000 FY 16-25 Budget Score (in mil.)

The inland waterways system is made up of rivers—mainly in the Midwest and Eastern U.S.—that the U.S. Army Corps of Engineers (Corps) maintains for navigation. Commercial barge operators on these waters currently pay a $0.29 per-gallon fuel tax that contributes 50% of the cost for the construction of navigation locks and dams that make commercial navigation feasible. The other 50% of construction and 100% of annual maintenance costs is covered by the federal government, thereby making it responsible for 90% of the total cost to sustain the inland waterways system on an annual basis.

In 2014, the fuel tax was increased nine cents to the current level, but this increase failed to recoup the loss of buying power from 20 years of inflation while the tax remained at $0.20 per-gallon. In exchange, commercial barge operators have sought to no longer pay for dams, navigation lock rehabilitations costing less than $100 million, or any project cost overruns. The federal government would still be responsible for 100% of the costs of maintaining the projects once construction is completed. Reduction of the cost-share responsibilities would force the federal government to cover hundreds of millions of additional dollars. Even with the increase in the fuel tax, waterways users shoulder less of the financial responsibility for the system than originally intended.

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