MARINE TRANSPORTATION Federal Financing and an Infrastructure Investment Framework

Mr. Chairmen and Members: We are pleased to be here today to discuss challenges in defining the federal role with respect to freight transportation issues. There are concerns that the projected increases in freight tonnage for all transportation modes will place pressures on the marine, aviation, and highway transportation systems. As a result, there is growing awareness of the need to view various transportation modes, and freight movement in particular, from an integrated standpoint, particularly for the purposes of developing and implementing a federal investment strategy and considering alternative funding approaches. An intermodal perspective appears especially important as the nation reacts to the increased security needs for transportation networks and as it plans for better, more efficient transportation for the future. At your request, we have done work focusing on the marine component of the national transportation system. My testimony today, which is based on our report 1 that is being issued today, addresses three topics: (1) the federal funding approaches used for the marine transportation system as compared with the aviation and highway systems, (2) the amount of customs duties on imported goods shipped through the marine, aviation, and highway systems, and (3) a framework to assist the Congress as it considers future federal investment decisions. Our recently completed work on marine transportation is based on our analysis of data collected from 15 federal agencies that expended revenue on the various transportation systems and/or collected funds from users of the systems during fiscal years 1999 through 2001. We also collected data from the U.S. Customs Service on the amount of duty collected on commodities imported by the various transportation modes. We applied the estimates developed by the U.S. Census Bureau on the percent of collections attributable to water, sea, and land transportation modes to total customs duties collected by the U.S. Customs Service during fiscal years 1999 through 2001. To develop a framework to assist the Congress in making decisions about the federal role in financing the marine transportation system, we built on prior GAO work on federal investment approaches and managerial best practices and interviewed U.S. Army Corps of Engineers and Department of Transportation officials. See appendix I for a more detailed explanation of our scope and methodology. In summary: • The federal approach for funding the marine transportation system relies heavily on general revenues, while the approach for funding the aviation and highway systems relies almost exclusively …