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March 19, 2010 - ASCE Statement - FY 2011 Appropiations-US ACE and the BR

Statement of
The American Society of Civil Engineers
On The FY 2011 Budgets
For The U.S. Army Corps of Engineers Civil Works Program
and the U.S. Bureau of Reclamation
Before
The Subcommittee on Energy and Water Development
House Committee on Appropriations

March 19, 2010 

The American Society of Civil Engineers (ASCE) is pleased to submit this statement for the record to the Subcommittee on Energy and Water Development on the proposed budget for the U.S. Army Corps of Engineers Civil Works program for fiscal year 2011.

In January 2009, ASCE released the latest edition of its Report Card for America’s Infrastructure. That report gave the nation’s public works systems an overall grade of D due to years of neglect in basic capital investments. Decades of delayed maintenance and modernization have left Americans with an outdated and failing infrastructure that cannot meet the nation’s demands.

Levees received a D–. More than 85 percent of the nation's estimated 100,000 miles of levees are locally owned and maintained. The reliability of many of these levees is unknown. Many are more than 50 years old and were originally built to protect crops from flooding. With an increase in development behind these levees, the risk to public health and safety from failure has increased. Rough estimates put the cost at more than $100 billion to repair and rehabilitate the nation’s levees.

The nation’s 12,000 miles of inland waterways received a grade of D– as well. Of the 257 locks still in use on the nation’s inland waterways, 30 were built in the 19th century and another 92 are more than 60 years old. The average age of all federally owned or operated locks is nearly 60 years, well past their planned design life of 50 years.

A. ASCE Recommends a Budget of $7 Billion for the U.S. Army Corps of Engineers Civil Works program in FY 2011. 

In the face of the Corps’ aging infrastructure needs, the president's budget for the Civil Works Program in FY 2011 reduces—not increases—federal investments in essential national civil works systems.

The budget proposal totals only $4.9 billion, a reduction of 9.3 percent from the FY 2010 enacted level of $5.4 billion. The administration request represents a 51 percent decrease from the FY 2009 enacted total of $10 billion through regular appropriations and the American Recovery and Reinvestment Act.

Moreover, the trend is not likely to improve in future years. The Corps estimates that its budget proposals will continue to decline through FY 2015, with a low estimate of $4.5 billion for FY 2013. The Corps expects that inflation will reduce actual spending on key infrastructure programs by a further $3 billion over the next five years.1 ASCE believes that these levels of spending are inadequate to meet the nation’s security, economic and environmental demands in the 21st century.

In an appearance before this subcommittee last month, the assistant secretary testified to the president’s intentions in cutting the civil works budget. “In keeping with President Obama's commitment to limit the overall level of non-security discretionary spending, the level of funding in the 2011 Civil Works budget is a reduction from both the 2010 budget and the 2010 appropriations.”2

The secretary explained that this year’s budget proposal funds four principal objectives: construction of the highest performing water resources infrastructure investments that provide the best returns from a national perspective; the nation's 12,000-mile navigation system by financing capital investments; aquatic-ecosystem-restoration efforts; and critical maintenance and operational reliability of the existing Corps infrastructure. The president’s plan emphasizes commercial navigation, flood and coastal storm damage reduction and aquatic ecosystem restoration, the secretary said.

The proposed construction budget for FY 2011 would assign $1.7 billion to 99 construction projects, only two of them new starts. The administration’s request represents a reduction of $341 million from the FY 2010 appropriation for this account. These funds are used for the construction of river and harbor, flood control, shore protection, environmental restoration, and related projects specifically authorized or made available for selection by law.

Increased funding to the states for water resource planning is vitally important to encourage statewide collaborative efforts to avert future crisis such as flooding or drought. Preparedness is a cornerstone for ensuring future water supply availability for population and economic growth and new challenges to address environmental needs. At least $100 million should be provided on a cost-shared basis in the Civil Works program to help states develop strategies to address their future challenges and needs.

We urge the removal of the prohibition on “new starts” in future Appropriations bills. We believe this is not in the best interest of the Corps’ work on the nation’s waterways, flood control needs and ecosystems restoration. Congress took a strong stand and made a serious commitment to the American people when it voted to override President Bush’s veto of the 2007 Water Resources Development Act and authorized more than $23 billion in new projects for the Corps of Engineers. It is time to meet that commitment by addressing this backlog of funding needs and provide additional funding for this critically important program. Failing to move on new projects that have been authorized will stop the Corps from addressing pressing needs.

B. Congress Should Solve the Problem of Declining Balances in the Inland Waterways Trust Fund.
Of the 257 locks still in use on the nation's inland waterways, 30 were built in the 19th century and another 92 are more than 60 years old. The average age of all federally owned or operated locks is nearly 60 years, well past their planned design life of 50 years.

The government needs to set a priority system for restoring locks that have outlasted their design lives, with an initial focus on all locks built in the 19th century. The current federal budget process does not differentiate between expenditures for current consumption and longterm investment. This causes major inefficiencies in the planning, design and construction process for long-term investments. In the interim, Congress must provide new revenues for the Inland Waterway Trust Fund (IWTF) to begin reducing the maintenance backlog.

The IWTF finances construction and maintenance of the nation’s 12,000-mile inland waterways system. The trust fund is supported by a 20-cent per gallon tax on commercial fuel used onspecified inland waterways. The fund is used to pay for half of the federal cost of constructing navigation improvements on those waterways; the remaining half is paid from general revenues. In recent years, the Corps has been steadily spending down the Inland Waterways Trust Fund.

The IWTF balance has declined each year for more than a decade. In FY 2011, the Office of Management and Budget estimates fund revenues at $85 million, with a year-end balance of approximately $30 million.

The administration’s budget request notes that the administration will propose to replace the current fuel tax with a new funding mechanism that will raise the revenue needed to meet the authorized non-federal cost-share of these capital investments “that is more efficient and more equitable than the fuel tax” for traffic on the inland waterway system.

If the administration’s proposal is enacted, the budget forecasts additional receipts of $72 million for the IWTF for FY 2011. Together with the $85 million in estimated receipts from the current excise tax and interest income, total receipts for the Inland Waterways Trust Fund would be $157 million under the administration’s budget request in FY 2011.

According to the Inland Waterways Users Board, large project cost overruns and delays in project schedules on the waterways have drawn down the IWTF balance. Project completion delays result from a federal budgeting and appropriations model that provides funding in annual and often-insufficient increments rather than a more reliable multi-year funding mechanism that would provide the certainty needed to more efficiently contract and build these capital projects.3

C. Increase Funding For Bureau of Reclamation to at Least $1.2 Billion for FY 2011.

The Bureau has a broad portfolio of responsibilities for natural resource management. Additional funding would allow the agency to address aging water resource facilities and to make significant progress on environmental restoration, irrigation structures, water recycling, and rural drinking water systems.

As with providing additional funding for the Corps of Engineers, additional funding for the Bureau of Reclamation could be put to use over the next two years to put shovels in the ground, fortifying critical pieces of infrastructure and creating good-paying construction jobs that would stimulate the economy.

The Bureau of Reclamation has played an important role in the development of the 17 western states over the past one hundred years. ASCE recognizes the importance of such investment given the aging of the infrastructure and the harsh climatic conditions of the western United States. We believe there should also be a greater emphasis to drought preparedness and the expected challenges from climate change with regard to the Reclamation program.

D. Congress Needs to Develop a Long-Term Strategy to Close the Infrastructure Investment Gap for Water Resources.

In recent years, national investment in water resources projects has not kept pace with the level of economic and social expansion. Over the last 30 years, the U.S. population has increased more than 40 percent while GDP has grown from $2.5 trillion to $7.5 trillion. Capital investment in public water resources infrastructure, however, has decreased by 70 percent. The combination of an expanding population and economy coupled with a decline in infrastructure investment has created a substantial investment gap.

With each passing day, the inability of our nation’s aging infrastructure to meet the needs of our growing population further threatens our economy. To complete ongoing infrastructure projects in a timely and efficient manner and to save future costly repairs by adequately addressing the existing backlog of critical deferred maintenance, Civil Works funding must increase to at least $10 billion for FY 2011. Notwithstanding the administration’s current spending freeze, annual increases of at least $400 million to $600 million will be required in subsequent years to reduce the “benefits foregone,” keep the Civil Works program on schedule and save the nation the costs of paying for more expensive “crisis” repairs in the future.

One element of a new strategic investment plan would be enactment of legislation to permit the Corps to fully fund water resources projects, particularly those for locks and dams on the inland waterways and for port dredging, through a multiyear appropriation at the time the project is authorized.

The current funding system of annual appropriations allows projects to be financed on a piecemeal basis to the detriment of the overall civil works program. Because each project is judged independently of the needs of the nation’s total water resources program, far too many projects start and thereby starve current projects of money needed to complete them. The result has been poor program and project management, inefficient design and construction schedules and a consequent growth in project costs.

This concludes our statement for the record on the Corps’ budget for FY 2011.

For further information, please contact:

Michael Charles
Senior Manager, Government Relations
American Society of Civil Engineers
101 Constitution Avenue NW, Suite 375 East
Washington, D.C. 20001
(202) 789-7844 DIRECT
(202) 789-7859 FAX
mcharles@asce.org
www.asce.org