Southern California port officials Monday approved a $15-per-TEU tax on all containers moving in and out of the ports of Long Beach and Los Angeles, in an effort to defer the cost of port expansion.
The full Long Beach board passed the tax unanimously. Three commissioners from the Los Angeles port passed the tax, with two commissioners not attending.
The seven-year tax, set to take effect Jan. 1, 2009, is projected to generate about $1.4 billion to pay for expanded road, rail and bridge projects at the two ports. Officials at the two ports plan to use the funds to match available state transportation bond funds, hopeful providing an additional $1.4 billion in taxpayer money for port projects. Thursday is the deadline for the two ports to apply for the state bond funds, which require local matching funds.
The collected funds will be used for several projects identified by port officials as "critical" to the future growth of the two neighboring ports. These include:
--Replace the aging Gerald Desmond Bridge with a taller and wider version for more than $800 million.
--Replace the Commodore Heim lift bridge with a fixed and wider structure at a cost of more than $650.
--Expand a short freeway heading to one of the ports' main intermodal yards, and expanding on-dock rail capacity at several locations.
The vote follows less than a month after the two boards approved a $35-per-TEU tax to raise funds for a controversial $2 billion re-regulation plan aimed at the local drayage fleet.
An academic study conducted in 2006 showed that container fees above a certain level could cause cargo to divert from Long Beach and Los Angeles to other ports. If the fees climb to $100 per TEU or more, the U.C. Berkley study found, the Southern California ports face the potential loss of at least 1 million TEUs each per year.
Adding to the already existing $50-per-TEU PierPass gate fee, the two recent taxes approved by the port authorities raise the total additional costs for a TEU moving through the two ports to $100 -- the threshold detailed in the study.
Later this year, state Sen. Alan Lowenthal, D-Long Beach, is expected to reintroduce a proposed $30-per-TEU tax on container moving through Long Beach, Los Angeles and Oakland. Gov. Arnold Schwarzenegger, who vetoed an earlier version of the bill, recently said he now supports it.
The two ports are reportedly also considering a further $11-per-TEU container tax that will pay for goods movement infrastructure projects outside of the two ports, such as the Inland Empire.
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