LaTourette bill could end tax on Great Lakes shipping
Thursday, April 14, 2011
U.S. Reps. Steven C. LaTourette (R-OH), Pat Tiberi (R-OH) and
Brian Higgins (D-NY) today introduced legislation that will exempt
the Great Lakes from the onerous Harbor Maintenance Tax (HMT) that
is thwarting efforts to establish a ferry that would move cargo
across Lake Erie to Canada from a NE Ohio port.
"The Harbor Maintenance Tax is the main obstacle to establishing
a cargo ferry to transport goods to and from NE Ohio and Canada,"
LaTourette said, adding that Canadian ports have no incentive to
finalize ferry service across Lake Erie if the costly HMT remains
in place. He said cargo ferry proposals are in limbo in
Ashtabula, Cleveland, Grand River and Conneaut.
"This could be the last hurdle to making cargo Ferry service a
reality," LaTourette said. "This will hopefully open up an
avalanche of new investment along the Great Lakes in our
region."
The Short Sea Shipping Act will carve out a narrow exemption for
the Great Lakes/St. Lawrence Seaway System. It would get
trucks off the roads, reduce pollution, save shipping time and be a
boon to the Great Lakes shipping industry, the trucking industry
and the local economy, LaTourette said.
The HMT, established in 1986, is a tax on the value of cargo.
It is levied to pay for harbor maintenance, like dredging of
ports and navigational channels. More than $1 billion was
collected last year at a rate of 0.125%, or $1.25 per $1,000 in
cargo value. The tax is not paid by the vessel owner or a
port, but rather the owner of the cargo in each ship. Today,
the HMT is assessed on cargo transported between U.S. ports, and
cargo imported to U.S. ports from other countries, but not on
exports. Port dredging would continue even with a Great Lakes
exemption.
Not only does the AMT pose a massive hurdle on the establishment
of a Great Lakes/Canada ferry system, it discourages shipping
between ports in the Great Lakes, LaTourette said.
He said a trip across Lake Erie to one of Canada's ports by lake
carrier is about 80 miles and takes about three hours. By
comparison, it might take six hours for a truck loaded with auto
parts to reach the same destination by driving around Lake Erie.
He believes there would be a huge demand for ferries loaded
with trucks and cargo traveling back and forth between Ohio and
Canada.
"This is just another example of the government getting in the
way of allowing the economy to grow," LaTourette said. "Once the
HMT is gone we will be able to take advantage of Ohio being one of
the best locations in the nations."
LaTourette said waterborne transportation on the Great Lakes is
safe, highly fuel efficient, and reduces emissions. He said
the Lake Carriers' Association in Cleveland has said it would take
take 2,800 25-ton trucks, 700 railroad cars or 47 barges to carry
the load of one Great Lakes vessel.
In addition, one study by the U.S. Army Corps of Engineers found
that Great Lakes shipping saves about $3.6 billion a year over the
next least-costly methods of transportation -- by rail or
truck.