Despite Cuts, Appropriators Look to Lock Down Some Dam Money

Rick Calhoun is just waiting for a disaster.

As president of Cargo Carriers, Calhoun oversees the shipping of more than 1,200 barges carrying grain down the Mississippi River to be exported, rock salt up the river to help de-ice roads in winter, and fertilizer across the Ohio River for farmers, among other things. In the best of times, shipping the goods along inland waterways is a quiet, clean, and relatively inexpensive alternative to railroads and trucks.

These aren't the best of times. Calhoun's ships have to pass through locks and dams that in some cases were built just after the Great Depression with an intended lifetime of just 50 years.

"We have to do something before there's a meltdown," Calhoun said. "We're dead in the water, literally, if something were to happen."

More than $200 billion worth of goods are shipped every year on massive barges crawling along major rivers and tributaries. But the industry is endangered by infrastructure that can sometimes date back a century and is decades past due for an overhaul. And as is typical with infrastructure these days, the need grows every year while money dwindles.

Even a congressional overhaul that prioritized some projects and freed up more money thanks to an industry-backed tax hike may not be enough. Despite calling for infrastructure spending throughout his tenure, President Obama's fiscal 2016 budget proposed cutting the Army Corps of Engineers budget by 13 percent, while not taking into account new appropriations from the waterways trust fund.

And while the money is likely to be restored, the budget plan has frustrated those who want to see the infrastructure fixed.

"It looks like whoever wrote his State of the Union and whoever wrote that budget came from different planets," said Republican Sen. Lamar Alexander of Tennessee, who oversees the Army Corps budget in the Senate. "How are we going to increase a user fee, take the money, and then not spend it?"

In the 2014 Water Resources Reform and Development Act, Congress set up a priority list for repairs to locks and dams, providing some order to what had been an open request for money. A subsequent bill bumped up the diesel tax paid by shippers to help fill the Inland Waterways Trust Fund, which had plunged from more than $400 million to just $24.7 million last year.

It's an improvement, but it won't mean overnight upgrades, given that the priority list has end dates that stretch into the 2030s. That means shippers will still have to spend years relying on infrastructure that was given a "D-minus" grade by the American Society of Civil Engineers in its 2013 report card.

Greg DiLoreto, a former ASCE president who works on water infrastructure, said the low grade was largely because of decades-old locks that can malfunction, leaving ships lined up for hours, or even days at a time.

"Just imagine what that does for commerce—if you're shipping a product down the river and it just stops," DiLoreto said. "There's a real economic tie to the condition of this infrastructure."

The attention of the waterways community is monopolized by the behemoth Olmsted Locks and Dam, a more than $3 billion project to overhaul a nearly-century-old locks and dam system between Illinois and Kentucky along the Ohio River.

The reconstruction project is designed for speed and efficiency on the busiest part of the Ohio River; according to the Army Corps, passage time will be reduced from five hours to less than an hour. Construction, meanwhile, has been anything but fast or efficient: First authorized by Congress in 1988 at $775 million, it's now not projected to be completed until 2024, at a cost of more than $3.1 billion.

Why? The project is relying on an innovative "in the wet" method, in which concrete slabs are lowered into the river current and fixed in place, rather than being constructed while the water is being diverted. Although the corps says the method is sound, it has caused extensive delays and ballooned the cost.

When Michael Toohey, president and CEO of the Waterways Council, discusses the Olmsted project, he jokingly specifies whether he's talking about the "dam project" or the "damn project." He acknowledges that Olmsted—which eats up a lion's share of the Inland Waterways Trust Fund—has loomed over the industry and made it difficult to chip away at the other outstanding projects.

Without earmarks to lean on, supporters were able to write a provision into last year's bill that sets up a priority system for locks projects, while also changing the cost-sharing for Olmsted to free up money elsewhere. To ensure that there was enough money to start working through that list, the industry itself backed a 9-cent-per-gallon increase in its diesel tax up to 29 cents, effective this month. The move is estimated to raise between $35 million and $40 million for the trust fund, which is matched dollar-for-dollar with General Treasury spending.

"We let this thing whittle away," Calhoun said. "The diesel tax is paid by the people pushing it up the river, but really the people who pay for it are the farmers and the consumers. When we have problems, the price of goods don't just go up by a few pennies; it goes up dramatically."

For the Waterways Council's Toohey, however, the major concern is that the money doesn't get spent. The money has to be portioned out in the appropriations process, and Obama's proposed fiscal 2016 budget calls for $4.7 billion for the Army Corps, down from the $5.4 billion approved by Congress for fiscal 2015.

It's not the first time the Army Corps has seen proposed cuts, which are typically restored by legislators who want to see home-state projects advance. This year, it falls on Alexander and his Energy and Water Appropriations Subcommittee to find a way to restore the funding and ensure that the full waterways trust fund is being spent.

Alexander is eager to see Olmsted fixed, not only because the project will speed up commerce in his state but also because it will free up funding for other home-state projects. The 75-year-old Chickamauga Lock on the Tennessee River, for example, sits fourth on the priority list but is in line for work in 2016 thanks to the reorganized plans. Under the proposed budget, Chickamauga doesn't see any dedicated funding.

The Appropriations Committee is still working out top-line figures for subcommittees, expected in the coming month, but Alexander said he's confident he'll be able to gather enough support to give the Army Corps a healthy budget this spring. The increasing danger from the aging infrastructure, he said, should be enough to convince his colleagues of the need to support the industry.

"When rivers flood, we've got a disaster almost every year," Alexander said. "That should remind us of the importance of fixing this infrastructure. I hope we're not going to wait for one of these antiquated locks to fail and close for us to find out how crucial this is."

(Image via Joe Ferrer/Shutterstock.com)