Peter Callaghan: Port-Related Fee Proposal Puts Costs Where They Belong

By Peter Callaghan, September 10, 2013, The News Tribune

Former State Senate Transportation Committee Chairwoman Mary Margaret Haugen has a knack for getting to the heart of issues.

Like when she proposed a container fee to get shipping lines and their customers to cover the cost of expensive inland infrastructure improvements being pushed by Puget Sound ports. She saw it as a better way than hiking the gas tax on all Washingtonians.

“The Port of Seattle is really the Port of Chicago,” the Camano Island Democrat said. “Why should people in the state of Washington be taxed for stuff going to Illinois?”

Haugen could have said the same thing about the Port of Tacoma. Most of the electronics, shoes, clothing, cars and other Asian imports passing through both ports are quickly put on trains for the Midwest. Yet the cost of road and rail connections is too often paid for by us via transportation taxes — especially the gas tax.

I don’t really want to pay higher taxes so the price of a 60-inch LED TV sold in Joliet, Ill., or Madison, Wis., can be a few dollars cheaper.

Haugen’s proposal, however, was shot down by the ports and their allies. Seattle and Tacoma would be at a competitive disadvantage to the even bigger ports in California if a state container tax were added to federal harbor taxes, they claimed.

Even when California considered imposing similar container fees to cover both infrastructure and pollution control, Washington’s trade community objected, pointing instead to the threat from Mexico and Canada, nations that are spending tons of tax dollars to build and improve their ports to skim off U.S.-bound containers.

That argument is very effective among politicians, all of whom want to be considered trade-friendly, labor-friendly and jobs-friendly. Few question the catechism that all trade is good, that ports are vast economic engines. Few consider that imports from Asia are three-to-four times as valuable as our exports to Asia, that up to a third of those containers return to Asia empty.

So proposals to tap into the shipping revenue stream to cover the cost of badly needed infrastructure improvements have died nearly as fast as suggestions that Tacoma and Seattle cooperate rather than let shipping lines play them against one another.

Which is why last month’s proposal by U.S. Sens. Maria Cantwell and Patty Murray is so important. The two Washington Democrats introduced what they call the Maritime Goods Movement User Fee to replace the existing Harbor Maintenance Tax.

The main difference between the two assessments is that the harbor “tax” is charged only when goods arrive via American ports while the maritime “fee” is assessed wherever containers get into the U.S.

Now, a container that arrives at the port of Tacoma is assessed a tax that averages $109 – depending on the value of the goods inside. The same container shipped through Prince Rupert in British Columbia but bound for America pays no maritime taxes.

The Cantwell-Murray plan would charge the same fee whether a container arrives at the ports or crosses the Canadian or Mexican borders by rail or truck.

The senators say this in only fair for Washington businesses and Washington workers. And that’s probably true since the plan would not only bring shipping back home but also would end the current situation where nearly all revenue goes to U.S. river ports that require constant dredging.

But it’s mostly a good idea because it is fair for Washington taxpayers. They will no longer be pressured to pay for improvements that are more fairly the responsibility of those who benefit directly from the trade – shippers and customers.

Not that the Murray-Cantwell bill will be easy to pass. The shipping lines and railroads will aggressively oppose it; so will retailers such as Target and Walmart (not to mention the members of Congress representing Joliet and Madison). All prefer the current system where we pay higher taxes so imported Nikes can be priced as cheaply as possible.

If nothing else, at least the proposal has the leaders of the two big ports supporting a solution that burdens shippers and retailers and not general taxpayers.

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