Testimony of Howard D. Marlowe
President of the American Coastal Coalition
Before the Subcommittee on Transportation and Infrastructure
of the Senate Environment and Public Works Committee
on the Subject of the Administration's WRDA 2000 Proposal
May 23, 2000

Chairman Voinovich and members of the Subcommittee, I am Howard Marlowe, President of the American Coastal Coalition. The ACC is a nationwide advocacy organization for coastal communities whose sole mission is to achieve policies that will promote the economic and environmental interests of coastal communities. On behalf of the ACC, thank you for this opportunity to testify.

Since our establishment in 1996, our major focus has been on federal policies that affect beach restoration. As you know, the Administration announced in 1995 that it would not support the authorization or funding of any beach nourishment projects which it deemed to be new starts. The Senate Environment and Public Works Committee and its House counterpart acted with force and clarity to reject the Administration's position when they adopted Section 227 of the Water Resources Development Act of 1996. That section, which we refer to as the National Shore Protection Act of 1996, declared it to be national policy that the Secretary of the Army should

-- Recommend potential shore protection projects for study by the Army Corps of Engineers;

-- Recommend projects for congressional authorization to receive construction funds; and

-- Recommend funding for shore protection project studies and construction.

To this day, the Army Corps of Engineers has published no guidance on implementing Section 227 because of strong opposition from the White House Office of Management and Budget. Members of Congress and interest groups such as the American Coastal Coalition spent months negotiating a solution to OMB's concerns about what it claims is the excessive long-term cost of beach nourishment projects. The result of those talks was the adoption in the Water Resources Development Act of 1999 of a major change in the cost-sharing formula for newly-authorized shore protection projects. That change will have non-federal sponsors paying an increased share of those long-term renourishment costs. At the time the Senate Environment and Public Works Committee was considering that change, Dr. Joseph Westphal responded to your questions that the cost-sharing formula being considered by the Committee would result in a change in the Administration's no-new-shore-protection projects policy. Apparently, he was not speaking for the Administration because (a) the President in effect proposed no funding for new beach restoration projects in his Fiscal 2001 budget recommendations, and (b) there is not a single new beach nourishment study or authorization contained in the Administration's WRDA 2000 proposal.

Mr. Chairman, the Administration's shore protection policy is bad for the national economy and the national environment. Furthermore, OMB's dealings with Congress on this subject have been characterized by an array of tactics ranging from falsehoods to bad faith. In WRDA 2000, OMB has taken their commitment to ignoring the will of Congress to new lows by failing to recognize the need for authorizing new shore protection projects and studies and by recommending an automatic de-authorization process that would have an especially harmful impact on existing and future shore protection projects.

Background

According to the U.S. Census Bureau, 54 percent of America's population lives within 50 miles of the coast. That number is growing by 3600 people a day! Millions more Americans and foreign tourists visit coastal communities in the warmer months. The primary attraction for both residents and visitors is the beach. In fact, America's beaches are its single biggest tourist attraction. They are also the source of billions of dollars of local, state and national tax revenues. From t-shirt vendors to banks, airlines, Realtors, and hotels, the beach is a major source of revenues and jobs. Beaches are also a unique part of America's environmental infrastructure. The sand that is so beautiful is also the home of many coastal animals, birds, and plant species. Beaches are also the best protection against wave damage caused by coastal storms.

From 1955 to 1995, the federal government spent an average of less than $30 million a year to help states and local communities restore their public beaches. That is less than the cost of a modest-sized federal highway interchange! Since 1995, this figure has increased to just over $85 million or three highway interchanges. That $85 million is out of a $4 billion budget for the entire civil works program of the Army Corps of Engineers.

Beaches play an extremely important role in the economic and environmental infrastructure of the United States. First, beaches are an integral part of America's coastal infrastructure. The immense natural resources of the nation's coastal regions are responsible for a significant amount of commercial activity. In 1993, the U.S. commercial fishing industry produced and marketing products valued at $10.8 billion. Saltwater recreational anglers generated $15 billion from 64 million fishing trips. In 1990, 2.15 billion tons of cargo valued at more than $500 billion moved through the nation's 190 seaports.

In 1997, total tourism expenditures in U.S. coastal congressional districts were more than $185 billion, while tourism payroll was almost $50 million and tourism jobs in these districts were more than 2.7 million. Beaches and coastal regions are not only the Number One destinations for domestic tourists. They also are the top destinations for foreign tourists. Each year, the Federal government receives about $4 billion in taxes from foreign tourists, while state and local governments receive another $3.5 billion. Foreign tourists spent more than $11 billion in Florida in 1992, $2 billion of that amount in the Miami Beach area alone. This Florida spending generates more than $750 million in Federal tax revenues, more than the total received by the State and its local governments combined. Focusing on Miami Beach alone, annual Federal tax revenues from foreign tourists ($2 billion) are about 17 times more than the Federal government spent on the entire Federal Shore Protection program from 1950 to 1993 ($34 million in 1993 dollars). If the Federal share of beach nourishment averages about $10 million a year, the Federal government collects about 75 times more in taxes from foreign tourists in Florida than it spends restoring that State's beaches.

In 1998, California's beaches generated $73 billion of direct and indirect benefits to the national economy. The federal tax revenue portion of those benefits alone was $14 billion compared to far less than half a million dollars that the federal government spent on beach nourishment in that state during 1998!

Delaware receives 5.1 million "person trips" each year in a state where just more than 21,000 people actually live in beach communities and another 373,000 people live within day-use travel distance. Beach tourism generates $173.2 million in expenditures each year. Just as significant, beach erosion results in an estimated loss of more than 471,000 visitor days a year, a figure which is estimated to increase to more than 516,000 after five years. During that five-year period, beach erosion will cost an estimated $30.2 million in consumer expenditures, the loss of 625 beach area jobs, and the reduction of wages and salaries by $11.5 million. Business profits will drop by $1.6 million and State and local tax revenues will decrease by $2.3 million. Finally, beach erosion will reduce beach area property values by nearly $43 million over the five-year period.

Our nation's estuaries are also major tourist and recreational attractions. For example, nature tourism in Corpus Christi, Texas is the fastest growing component of a tourism sector that generates $23 billion annually. Recreational fishing provides aggregate net benefits to the area of $83 million, including $37 million per year in state and local taxes. The economic impact of water quality-dependent uses in Long Island Sound is estimated at more than $5 billion annually. Commercial and recreational fishing contributed more than $1.2 billion of the total, while beach going has a direct benefit of more than $800 million annually.

National Shoreline Study

At a recent hearing of this Subcommittee, the Coastal States Organization highlighted the importance of the National Shoreline Study authorized by WRDA '99. That study will not only provide the first physical catalog in 30 years of the beaches in the United States that eroding, it will also show the economic and environmental costs of erosion to the nation. The ACC fully supports funding the National Shoreline Study. However, we regret that the Administration apparently is using the fact that this study has yet to be completed as an excuse not to recommend the authorization or funding of any new beach restoration projects. It is especially hard to take this excuse with any seriousness when we look at the paltry $300,000 appropriation for this study recommended by the Administration. That figure less than one-third of the amount of money needed in Fiscal 2001 to mount an effective study.

Facts vs. Falsehoods Given their popularity, economic and environmental importance, and their storm damage reduction benefits, it is surprising that beaches and the communities along the coast are a perpetual target for media attacks. "Playgrounds for the Rich." "Disasters Waiting to Happen." It's time to see how these falsehoods fair against the facts.

-- Falsehood: The Federal Flood Insurance Program pays out more in benefits to coastal homeowners than it receives in insurance premiums. Fact: Homeowners in coastal states annually pay in at least 20 percent more in premiums than they receive in flood insurance payments.

-- Falsehood: Tens of billions of dollars are being spent in the "endless" and "useless" struggle to restore eroded beaches. Fact: Over the past 45 years, the Federal government has spent a total of less than $2 billion on beach restoration. That's about $30 million a year. Maintaining our country's beaches is an ongoing effort, but it is far from useless. Studies have shown that every dollar spent to repair and maintain a beach produces at a very minimum $3 to $5 in taxpayer benefits.

-- Falsehood: Spending taxpayer money on beach restoration is a subsidy for rich people. Fact: This class-baiting rhetoric is especially pernicious. Social scientists have studied America's beaches. They have found what any of us can conclude with our own eyes: With the exception of shopping malls, sandy beaches attract the most diverse economic, ethnic and racial populations. There is no denying that many of the homes located nearest to any of America's coastlines are owned by families with above-average incomes. But the only beaches that can receive Federal or state money are public beaches with public access.

-- Falsehood: Beach restoration efforts are useless. The better approach is to "let nature take its course." Fact: Since the arrival of the first non-Native Americans, humans have built communities and ports along the coast. Ports, navigation channels, and similar development have been an essential ingredient of the economic vitality of America. That development has interfered with the natural flow of sand, causing most of the beach erosion in the U.S. There is no way to "let nature take its course" without reversing the events of the past three centuries.

Mr. Chairman, there are vocal groups who choose to ignore these facts in order to press their case that federal tax dollars should not be spent on beach restoration. They have found an ally in the White House Office of Management and Budget. They would implement a purposeful policy of neglect of America's eroding coastline. None of these people would consider for a moment a policy of even benign neglect of an endangered species or a wildlife refuge. But their "back to nature" appeal is little more than proposing a policy of malignant neglect. By taking this position, they are threatening irreparable harm to an extremely important economic and environmental national asset.

The American Coastal Coalition as well as most local coastal governments and private citizens want to restore America's eroded beaches and preserve the peoples' opportunity to use this outstanding environmental resource. Our preferred approach to accomplish this goal is to replenish the sand that has been lost because of 300 years of human intervention along the coast. This approach costs money, but it is far preferable to the cheaper alternative of building seawalls to protect coastal property. OMB and its fringe group allies can continue to attack coastal communities or they can join with us in supporting attainable policies that will repair the damage and encourage responsible growth. Calling for the clock to be turned back three centuries is neither responsible nor attainable.

Section 16 of the Administration's WRDA 2000 Proposal

The Administration's proposal for the Water Resources Development Act of 2000 contains a provision (Section 16) that would have the following impact:

First, if construction of a water resources development project or separable element is not initiated within seven years from the date the project or separable element was last authorized it would automatically become deauthorized.

Second, those water resources development projects and any separable element of such a project, for which funds have once been obligated for construction, shall be de-authorized if congressionally identified appropriations have not been obligated for construction of the project or separable element during any five consecutive fiscal years.

Currently, it takes one to two years to get a beach nourishment project's reconnaissance study authorized and funded; another year to have the study completed; another year to get the feasibility study funded; two to three years to get that study completed; another year to get the project authorized. At this point, the clock would start running under the Administration's proposal.

In theory, a project ought to be able to get under construction within seven years of authorization. For example, if a project is authorized in 2000, it should be able to get funding for actual construction by 2002, with environmental windows possibly holding up actual construction until 2003. But, most of those beach nourishment projects that are up for actual construction funds in FY 2001 to 2002 were authorized in the 1980's! We believe that Corps procedures have undergone some improvement in recent years, but many beach nourishment projects authorized in 1992 and 1996 [projects can only be authorized in years in which Congress enacts a Water Resources Development Act] are not likely to get construction funds until FY 2003 or later. While the Corps needs to do better, Corps procedures and the Administration's refusal to budget for new beach nourishment projects have been significant factors in slowing down the time it takes to get from authorization to construction. Until the Administration is willing to budget for the construction of shore protection projects and Corps procedures improve, the seven-year automatic de-authorization provision may harm shore protection that are needed and that, by all measures, are viable.

Every authorized Federal beach nourishment project has an economic life of up to 50 years. Over that life, the authorization provides for periodic renourishment. If the project "performs" well, the period between initial construction and the first periodic renourishment may be longer than the five years allowed by the Administration's proposal. The same may be true for the time period between subsequent periodic renourishments. That "good performance" would be rewarded with an automatic deauthorization! This is one Seal of Approval from the Feds that local communities don't need. Once again, the Administration's refusal to budget for the funding of any activity related to a beach nourishment project that it did not recommend in the first place also can hold up congressional funding for periodic renourishment.

The American Coastal Coalition opposes Section 16 and strongly urges that it not be included in this Committee's WRDA 2000 bill. We see this proposal as another in the Administration's efforts to kill the federal beach restoration program.

WRDA 2000 Policy Changes

There are a number of changes that can be made which will improve the effectiveness and efficiency of the federal beach restoration program. I will summarize three of these and then emphasize a fourth which is actually tops on the legislative agenda of the America Coastal Coalition.

Congress in WRDA '99 has already called on non-federal sponsors to shoulder a greater share of the costs of beach nourishment projects. Two states, New Jersey and Florida, have increased the dedicated funds they already had in place for these projects. Texas, California, and Hawaii each appropriated significant sums last year for their state's beach nourishment efforts. The ACC believes that more coastal states must make long-term commitments to fund their share of these projects.

In many areas of the country, beach erosion has either been caused or exacerbated by other federal activities, such as navigation and port maintenance projects. The solution is not to assign blame, but for the federal government to assume its statutory responsibility to mitigate the damages to beaches which these projects have caused. Unfortunately, there are far too many instances where the Corps of Engineers has tried in recent years to deny that responsibility.

On the other hand, we applaud the Corps for efforts it is making to approach its coastal missions in a regionalized, integrated manner. For Fiscal 2000, Congress funded a regional sediment management program within the jurisdiction of the South Atlantic Division and the Mobile District Offices of the Corps which is an important effort to integrate the planning and execution of navigation and beach restoration projects. We hope that Congress will appropriate funds to begin similar efforts in other parts of the country in Fiscal 2001. The ACC also welcomes the efforts of the San Francisco Division of the Corps to establish a task force that puts the Corps, state agencies, local governments, and other interests together in a concerted effort to plan for the combined coastal water resources needs within its jurisdiction.

Recreation is Not a Four-Letter Word

There is at least one statutory initiative that can be undertaken in WRDA 2000 that will have a major benefit for the federal beach restoration program. The American Coastal Coalition proposes that recreational benefits be given equal consideration with storm damage reduction and environmental restoration benefits in the all-important calculation of a project's estimated benefit-cost ratio.

During the "study" phase of a beach erosion control project, the Army Corps of Engineers develops a plan which maximizes net national economic development (NED) benefits. An essential element of this plan is the formulation of a benefit-cost ratio (BCR). Under current budget policies, the Corps will not recommend the construction of any project whose benefits do not exceed its costs. Costs are determined by the outlays required to provide initial project construction and periodic renourishment over the life of the project. Benefits are those which increase the economic value of the national output of goods and services.

Corps policy requires that at least 50 percent of the cost of the project be covered by storm damage reduction benefits. An equal amount of recreation benefits can be used for project justification as long as the recreation benefits are incidental, i.e., no additional material is added to accommodate recreation. "Shore protection projects (particularly those featuring beachfill) are innately conducive to beach and shoreline recreational activities. Provided that hurricane and storm damage reduction benefits combined with incidentally generated recreation benefits limited to an amount equal to hurricane and storm damage reduction benefits are sufficient in themselves for economic justification, the Corps will propose undertaking the project as a HSDR project....If, in this limiting initial evaluation, a greater amount of recreation benefits is required to be combined with hurricane and storm damage reduction benefits in order to demonstrate the economic justification, the project is characterized as being primarily for recreation. As such, it will not be proposed by the Corps as a Federal undertaking, since recreational developments are not accorded priority in Civil Works decisions." (Emphasis added)

There is no statutory authority for this decision by the Corps of Engineers to accord recreation a lower priority in its decisions regarding which beach restoration projects should be recommended for federal authorization. This was a policy decision made by various executive branch entities in the mid-1980's. Whatever the basis for their decision, we urge this Committee to require that projects whose primary benefit is recreational be accorded the same budgetary priority as those whose primary benefit is storm damage reduction or environmental restoration. The 1946 law which gave the Corps authority to do beach restoration work states:

"With the purpose of preventing damage to the shores and beaches of the United States, its Territories and possessions and promoting and encouraging the healthful recreation of the people, it is declared to be the policy of the United States....to promote shore protection projects and related research that encourage the protection, restoration, and enhancement of sandy beaches, including beach restoration and periodic beach nourishment, on a comprehensive and coordinated basis by the Federal Government, States, localities, and private enterprises." (emphasis added)

Federal policy should base beach nourishment assistance on the totality of the economic benefits it provides. To limit those benefits to storm damage reduction ignores the equally important economic impact of beach tourism, eco-tourism, recreational fishing, and other similar benefits.

Prior to the 1986 law, beach restoration projects were often justified as recreational projects. These included major projects such as Miami Beach which, prior to its restoration in the late 1970's, had a seriously eroded beach which had resulted in a significant loss of revenue from tourism. The restoration of this "recreational" beach has produced billions of dollars of local, state, and national economic benefits which far exceed the cost of this project.

Beaches are public parks that are part of the coastal infrastructure and environment. They provide recreational, storm damage reduction, and environmental benefits. The focus of Federal policy should be to restore and maintain these parks so that the public can use them.

There are regions of the country (for example, the Gulf Coast states and Hawaii, among others) where coastlines are less developed. The distribution of Federal beach restoration funds is less likely to go to these areas because their proposed projects do not achieve a benefit/cost ratio that is equal to or greater than 1:1. Proposed projects in more-developed areas typically have no difficulty achieving a BCR of greater than 1:1. Neither the Army Corps of Engineers nor Congress favors Federal financial assistance for projects whose BCR is 1:1 or less.

Similarly, since "budget policy" as implemented by Corps of Engineers regulations has determined that the beach restoration program is one whose primary purpose is hurricane and storm damage reduction, it provides no assistance to public beaches (even those that are well-developed, such as Waikiki), where there is not a significant history of severe coastal storms. Much of the beach erosion throughout the United States is caused by the interruption of normal sand flow by various human-induced factors such as ports and navigation channels as well as dams. These facilities interrupt the natural flow of sand, making it difficult if not impossible for nature to repair eroded beaches. As noted above, the underlying Federal law states that the basis of Federal financial assistance should be "preventing damage to the shores and beaches of the United States, its Territories and possessions and promoting and encouraging the healthful recreation of the people." These are the only statutory purposes determined by Congress which support the Federal role in beach nourishment, and they should not be modified by either Corps of Engineers or Administration policies.

Therefore, Mr. Chairman, the American Coastal Coalition proposes the following change in law which we urge this Subcommittee to include in its WRDA 2000 bill:

Proposed Amendment:

Section 1. 33 U.S.C. 426 e(2) is amended as follows:

-- "(B) Recommendations for new shore protection projects (i) In general The Secretary shall recommend to Congress the authorization or reauthorization of shore protection projects based on the studies conducted under subparagraph (A). In making such recommendations, the Secretary shall develop and implement procedures which treat recreational, hurricane and storm damage reduction, and environmental restoration benefits equally." Section 2. Strike Section 103 (c)(4) of the Water Resources Development Act of 1986 and redesignate the following paragraphs accordingly.

Explanation:

Section 1 directs the Assistant Secretary of the Army (Civil Works) to develop and implement regulations which treat recreational, hurricane and storm damage reduction, and environmental benefits equally in determining the benefit-cost ratio for a proposed beach nourishment project. This would only apply to new projects.

Section 2 strikes the provision in WRDA '86 which establishes a separate, lower Federal cost-share for projects whose primary purpose is recreational.

WRDA 2000 Beach Restoration Project Authorizations

The following is a list of only those project or study authorizations of which we are currently aware. We believe each of these merits inclusion in WRDA 2000.

Lee County, Florida: The County is seeking a modification of its original congressional authorization to give it status as a reimbursable project under Section 206 of WRDA '92. The Corps of Engineers has never implemented guidance for reimbursable beach restoration projects, alkthough it has issued guidance for statutory provisions which have authorized reimbursable navigation projects. This lack of guidance makes it quite difficult for a non-federal sponsor to proceed using the provisions of Section 206. The experience of Panama City Beaches, Florida, which was accorded Section 206 status in WRDA '96 provides a strong indication that. For those communities that can afford to "front" the federal share of construction costs, significant savings can be achieved in the time it takes to complete construction and project cost. These are taxpayer savings at the federal, state, and local levels. With respect to all types of reimbursable water projects, the American Coastal Coalition states its opposition to the funding limits placed on these projects by Section 102 of the Energy and Water Development Appropriations Bill for Fiscal 2000.

Barnegat Inlet to Little Egg Inlet, New Jersey: This project is unfortunately a poster child for the harm that can be done by the Administration's "no-new-shore-protection-projects" policy. The failure to get an authorization of this project in WRDA 2000 could delay construction from 2002 until 2004. Delays have a price which can be expressed in the economic and environmental cost of increased erosion as well as higher construction costs caused by inflation.

Maui, Hawaii: A significant portion of the beaches of this island county are suffering from erosion. There are no federally-authorized beach restoration projects in any part of Hawaii except Waikiki. The beaches of Maui, just as others in Hawaii, are suffering from erosion. We support funding a reconnaissance study followed by a feasibility study which will determine how the federal government can partner with the State and the county to restore one portion of Maui's shoreline (in the Kihei region) fully factoring the environmental restoration and recreational benefits of this project.

Cameron Parish, Louisiana: There are two projects in this parish where Gulf sediments that flow from east to west are being blocked by jetties associated with federally-maintained navigation channels. One is on the west side of Calcasieu Ship Channel West Jetty and the other is on the west side of Grand Chenier West Jetty. This is an example of the mitigation responsibility discussed earlier in my testimony. The State has undertaken several surveys of the fast-eroding beach in this area. We recommend that a study be authorized in WRDA 2000 that will examine the feasibility of undertaking a beach or other type of shoreline restoration study.

Section 103 Program: The Corps of Engineers needs increased authority to undertake Small Beach Erosion Projects under its Section 103 Continuing Authorities program. The current authorization limit of $30 million a year and $3 million a project should be raised to $50 million a year and $5 million per project. There are many projects on the Gulf and West Coasts, as well as Hawaii, which are likely candidates for this category or beach restoration program.

San Francisco, California: Ocean Beach in San Francisco is another example of the need to give the Corps of Engineers authority to "think outside the box" so that it can prepare a plan to restore a beach which is heavily used by the public. The authorization for study this project (adopted by the then-House Committee on Public Works and Transportation on August 3, 1989) should be expanded to include assessing its potential to provide environmental restoration benefits as well as to protect public recreation and public facilities endangered by the erosion of the beach, regardless of whether that erosion is caused by storm events. This beach is an excellent example of a coastal public park. Its restoration should be eligible for federal assistance.

Raritan Bay and Sandy Hook Bay, New Jersey: There are several New Jersey Bayshore communities that are unprotected from storm damage and coastal erosion. Increased urbanization and loss of protective beaches in this particular area of the State have made low-lying residential and commercial structures dangerously susceptible to flooding. Port Monmouth and Cliffwood Beach are two segments of this project that should be authorized in WRDA 2000 subject to completion of a Chief's report.

Dare County, North Carolina: This is also a much-needed beach restoration project that we recommend for authorization subject to a Chief's report. A feasibility study is currently being completed for this economically and environmentally important area of the East Coast shoreline.

We ask for the Subcommittee's approval to provide information on additional beach restoration project provisions for WRDA 2000 as more information becomes available to us, and we thank the Subcommittee for this opportunity to present our views.