Port of Los Angeles commissioners on Thursday unanimously approved a $35-per-TEU container tax on all loaded containers moving through port facilities by truck.
The move mirrors a tax adopted by the neighboring Long Beach port on Monday. Both taxes are set to take affect June 1, 2008.
The two taxes, hoped to raise $1.6 billion through 2012, represent the financing component of a controversial $2 billion truck re-regulation plan that the ports hope will transform the local drayage fleet of nearly 17,000 trucks into a small group of large trucking firms hiring only employee drivers. More than 80 percent of the local drayage drivers are independent owner-operators and several recent surveys indicate a vast majority wish to remain so.
According to the Port of Los Angeles, approval of the tax also signals a shift in the financing of the overall truck plan, with the ports now offering to contribute no funds to replace any of the trucks. Originally, the two ports were to contribute close to $200 million to replace or retrofit trucks under the $1.8 billion five-year plan.
A Port of Los Angeles release now describes the total cost of the plan as $2 billion, with $1.6 billion coming from the container tax and $400 million coming from state sources. The ports, however, have yet to secure the state funds. It is not clear if funds would actually be available.
The $35-per-TEU tax will be applied to the beneficial cargo owners, or end users. Terminal operators at the two ports will be responsible for collecting the money from the BCOs. The funds will be deposited in a ports-controlled fund that will be drawn on to replace or retrofit the drayage vehicles.
Approval of the taxes, and last month's first phase of the plan that set schedules by which trucks will be progressively banned over the next five years based on their model year, now sets the stage for the ports to tackle the most contentious and potentially litigious portions of the overall truck plan.
When proposed in April, the overall truck plan was to be approved in one fell swoop, establishing the ban, the funding scheme and a licensing and employee-only component simultaneously.
Following delays on approval due to threats of litigation over the last two components, the ports parsed out the ban and funding portions.
The licensing component as originally proposed calls for the ports to issue licenses to trucking firms based on ports-defined criteria. Firms that do not obtain or are deemed ineligible for the licenses will not be able to operate in the ports. One of the licensing criteria is a requirement that trucking firms only hire employees and not independent owner operators.
This employee-only component has drawn heavy support from labor and social justice groups while being opposed virtually unanimously by the transportation and retail industry. Numerous industry groups are considering lawsuits over the licensing and labor components, claiming interference and restriction of interstate commerce.
Comments made Thursday regarding the approval of the container tax clearly indicate that the ports plan to move forward with the licensing and labor components.
"With the financial groundwork laid, it's now time to push forward on the rest," said Los Angeles Mayor Antonio Villaraigosa following the vote.
Last summer, before the initial outlines of the ports' overall truck plan contained any labor component, Villaraigosa met with International Brotherhood of Teamsters president James Hoffa Jr. to discuss the union's plan to organize the ports truck drivers. Shortly after, the labor component was adopted as part of the overall truck plan by the mayor's appointees on the Los Angeles port commission.
While the two ports have moved in lock-step on approving portions of the truck plan, port insiders have made it clear that the real direction for the plan, including the vehement adherence by the two commissions to an employee-only component, has come from Villagairosa's office, vis-a-vis the Port of Los Angeles port officials.
Los Angeles City Council Member Janice Hahn, who represents the Los Angeles port area, also referenced the need for labor changes within the drayage fleet at the ports.
"Clean trucks are great, but won't do us much good without a stable workforce to drive them."
Over the past year, the phrase "stable workforce" has become a common phrase used by city and port officials when referring to the employee-only component of the truck plan.
Los Angeles Harbor Commission President S. David Freeman, the driving force on the commission behind the truck plan labor component, predicted that when the entire plan is in place it would bring "revolutionary change" to the local drayage fleet.
"Instead of dirty trucks, loose security and underpaid drivers," said Freeman, "we are moving to cleaner air, tighter security and a well-paid, stable workforce."
Port officials have said that they plan to consider the licensing and labor components of the overall truck plan sometime in January or February.
This week's votes by the Long Beach and Los Angeles commissions also become the first successful passage of a container tax after years of efforts by port and government officials.
In September, Sen. Alan Lowenthal, D-Long Beach shelved his third attempt to pass a container tax bill through the state legislature. The bill, threatened with a veto by Gov. Arnold Schwarzenegger, was to raise $500 million for port infrastructure and air quality projects by imposing a $30-per-TEU tax on containers moving through the ports of Long Beach, Los Angeles and Oakland. Lowenthal's first attempt stalled in the legislature and his second effort was vetoed by Schwarzenegger.
Lowenthal has said he plans to reintroduce the bill next year and the governor said this week that he now supports a statewide tax on containers.
Trucks moving into the ports already face a daytime gate fee, implemented several years ago to encourage the use of night-time gates and relieve truck congestion on local highways. |
