Duluth / Superior Harbor Question

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Re: Duluth / Superior Harbor Question

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Information below from the American Great Lakes Ports Association:

The U.S. Harbor Maintenance Tax (HMT) was enacted by Congress in the Water Resources Development Act of 1986 (P.L. 99-662). The HMT is an “ad valorem” tax, meaning a tax on the value of cargo. Originally, Congress set the HMT at 0.04 percent of the value of cargo carried on ships. In 1990, the tax was increased to 0.125 percent of the value of cargo. The tax is not paid by the vessel owner, nor the port, but rather, by the owner of the cargo in each ship.

While the original tax applied to all cargo transported by ship (with a few exceptions), in 1998 the Supreme Court struck down the taxation of export cargo as unconstitutional. As a result, the Harbor Maintenance Tax is assessed on cargo transported between any two U.S. coastal ports – including Great Lakes ports – and cargo imported to U.S. ports from other countries. The tax is not assessed on export cargo. It is important to note that the Harbor Maintenance Tax is also not assessed on shipments through inland river ports. Congress has enacted a separate user fee for the river barge industry. (Commercial barge operators pay a federal fuel tax).

The purpose of the HMT is to generate revenue from port users for port and navigation infrastructure maintenance conducted by the U.S. Army Corps of Engineers. Specifically, the Army Corps of Engineers maintains federal shipping channels by conducting periodic dredging. Such dredging is necessary to remove sand and silt that naturally accumulate. In the Great Lakes the Corps of Engineers also engages in additional operation and maintenance activities such as repair of breakwaters and operation of locks.

Harbor Maintenance Tax receipts (currently ~ $1.9 billion/year) are placed in the Harbor Maintenance Trust Fund, which serves as a source of revenue from which Congress appropriates funds for the Corps of Engineers’ maintenance activities. Unfortunately, there is no statutory link between the inflow of tax revenue to the federal government and the outflow of maintenance funds. Tax collections are determined by the volume and value of trade, which has generally grown over the last two decades. Expenditures are determined by the Congressional budget and appropriations process, which has historically been constrained. For this reason, at the end of calendar year 2022 there was an excess balance of approximately $9.5 billion in the Harbor Maintenance Trust Fund.

Despite this surplus, Corps of Engineers’ maintenance needs in the Great Lakes region remain unaddressed. The Corps estimates that over the next five years Great Lakes navigation channels will require $540 million of dredging to maintain authorized dimensions, breakwaters and jetties need $505 million in repairs, and the two existing navigation locks at Sault Ste Marie, Michigan require $216 million in maintenance – a total regional maintenance backlog of $1.26 billion! Ports and waterways in other regions of the United States are suffering from a similar lack of maintenance.

In recent years, Congress has worked to address this problem. Section 2101 of the Water Resources Reform and Development Act of 2014 (WRRDA) called for increased spending from the Harbor Maintenance Trust Fund and laid out a series of non-binding funding targets between FY2015-25. The targets have provided a useful roadmap to achieve a key policy goal – full use of the Harbor Maintenance Tax. Since 2014, the House and Senate Appropriations Committees followed the targets and incrementally increased annual appropriations from the HMTF – more than doubling since 2014.

The Water Resourced Development Act of 2020 took another step forward. The legislation includes language to provide special budgetary treatment to appropriations from the HMTF. While the law does not force House and Senate appropriators to spend money, it effectively removes any incentive not to. This special budgetary treatment is capped according to a formula in the legislation. Each year, the cap is calculated by adding: 1) HMTF deposits two fiscal years prior + 2) the following amounts:

in FY2021 $500 million

in FY2022 $600 million

in FY2023 $700 million

in FY2024 $800 million

in FY2025 $900 million

in FY2026 $1 billion

in FY2027 $1.2 billion

in FY2028 $1.3 billion

in FY2029 $1.4 billion

in FY2030 $1.5 billion

This formula should allow Congress to not only spend incoming HMT revenue, but also incrementally spend-down the $9.5 billion surplus balance currently in the trust fund.

Finally, WRDA 2020 also included a key provision to ensure that the Great Lakes region benefit from increased HMTF spending. The law requires that no less than 13% of annual expenditures from the HMTF be directed to maintenance projects in the Great Lakes Navigation System.

(https://www.greatlakesports.org/issues/ ... e-backlog/)
Guest

Re: Duluth / Superior Harbor Question

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So why not enlighten us as to what is correct?
Guest

Re: Duluth / Superior Harbor Question

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Your under standing isincorrect
JERRY
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Re: Duluth / Superior Harbor Question

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My understanding is that ships pay for the time they spend within the harbor… even at anchor inside the harbor… with the costs going towards harbor maintenance (dredging, etc). In contrast, anchoring outside the harbor is “free.” Not sure when this policy was put into effect, but it could explain the trend to anchor outside the harbor in recent decades.
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Duluth / Superior Harbor Question

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In many older photographs of Duluth/Superior harbor (pre-1980s), saltwater ships are often seen sitting in the harbor behind Park Point waiting for a dock or cargo. Today ships normally anchor off the shared harbor in Lake Superior while awaiting dock space. Did this practice change for any particular reason or did ships become too large to anchor inside the harbor? Did this become a bigger problem as large lake carriers came into service during the 1970s-1980s?
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