Schwarzenegger vetoes California container fee for shippers

| 9/26/2006

A bill in California that would have raised about $500 million a year from shippers at the ports of Los Angeles and Long Beach to fight smog and improve security was vetoed Friday, Sept. 22, by Gov. Arnold Schwarzenegger.

In his veto message, the governor said the bill – SB927 – would hurt overseas trade and might harm local job growth if shippers decide to use other ports such as Oakland. He also objected that the fee applied only to material shipped in metal containers instead of all imported goods.

Sponsored by Sen. Alan Lowenthal, D-Long Beach, the bill would have added a $30 tax on every 20 feet of shipping containers passing through the nation’s busiest port complex. For most large containers used by railroads, the fee would have been $60 per container.

The money would have been used to improve rail infrastructure, strengthen port security and reduce air pollution caused by trucks, ships and trains.

One-third of the money would have gone to the ports themselves. That portion would have been spent on security improvements at the facilities.

The ports would have been required to work with a bevy of security agencies – including the Coast Guard, the Homeland Security Department and various state agencies – to select which security improvements would be funded.

The rest of the money would have been used to set up port congestion and mitigation relief trust funds to pay for the improvements.

The portion provided to alleviate port congestion would have gone to the California Transportation Commission to pay for projects to improve the rail system that moves port containers to and from the ports. The text of the bill said the commission would be prohibited “from using the funds to construct, maintain, or improve highways.”

Money earmarked for mitigation relief would have been used by the California Air Resources Board to develop a list of projects to reduce pollution caused by the movement of containers.

Despite the veto, Lowenthal said the issue will not die because he plans to renew his effort when the next legislative session opens. He said he would work to gain enough backing in the Legislature so that the measure could withstand a veto from the governor.

“This veto sends a message that it’s OK to sacrifice our children’s’ health and quality of life in Southern California to subsidize imported goods going to the interior of the United States,” Lowenthal told the Long Beach Press Telegram. “But this problem isn’t going away, and neither is the effort to take care of it or address it.”