What's Happening?
America's largest port authorities are advocating for Congress to reinstate funding from the Harbor Maintenance Trust Fund (HMTF), which has been a contentious issue in the appropriations process. The American Association of Port Authorities (AAPA) warns that without restored funding, the U.S. port system could lose $1 billion in federal investment during President Trump's current term. The HMTF, funded by a 0.125% value-added tax on goods entering U.S. ports, supports maintenance dredging and related projects to keep federally-supported harbor navigation open. Despite a 2020 bipartisan agreement to allocate funds equitably among different types of ports, the Trump administration's FY2026 budget request has zeroed out these allocations, citing unspent funds from previous appropriations.
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Why It's Important?
The reduction in HMTF funding could significantly impact U.S. ports, particularly donor and energy transfer ports, which rely on these funds for essential maintenance and infrastructure projects. The lack of funding may hinder the ports' ability to maintain operations and accommodate growing trade volumes, potentially affecting the broader U.S. economy. Ports are critical for international trade, and any disruption in their operations could lead to increased costs and delays for businesses relying on imports and exports. The decision to cut funding also raises concerns about the equitable distribution of resources among ports, which could affect smaller and emerging harbors disproportionately.
What's Next?
The 23 ports have sent an open letter to key House and Senate subcommittee leaders, urging them to address the funding shortfall. The ports are seeking nearly $330 million in Section 102 funding to continue projects initiated with FY2024 funding. The ongoing budget discussions in Congress will be crucial in determining whether these funds will be restored. Stakeholders, including port authorities and businesses dependent on port operations, are likely to increase lobbying efforts to influence the budgetary decisions. The outcome of these discussions will have long-term implications for port infrastructure and the U.S. trade landscape.
