TESTIMONY SUBMITTED BY THE AMERICAN ASSOCIATION OF PORT AUTHORITIES REGARDING THE BUDGET OF THE U.S. CUSTOMS SERVICE SUBMITTED TO THE SUBCOMMITTEE ON INTERNATIONAL TRADE U.S. SENATE May 27, 1986 Washington, D.C. AAPA Testimony -2 May 27, 1986 Introduction The American Association of Port Authorities (AAPA), founded in 1912, represents essentially every major U.S. public port authority and public port agency. In each case, our members are public entities mandated by law to serve public purposes. AAPA, representing its member public port authorities, has a major interest in the ability of the U.S. Customs Service to provide timely cargo clearance, passenger processing and general inspection services. International waterborne trade through U.S. ports has grown tremendously during the last decade. Recent figures demonstrate that over 95% of the nation's international overseas commerce, measured by tonnage, now passes through U.S. ports. As a result, the U.S. port industry now contributes over $60 billion annually in direct and indirect benefits to the U.S. economy, and over $30 billion to our gross national product. Customs Service Staffing Levels Based on the experiences of our member public port authorities over the past several years, we do not believe that the U.S. Customs Service's ability to perform its critical commercial operations functions has kept pace with the nation's growth of waterborne commerce. For example, Customs staffing in the Baltimore District has decreased from 78 inspectors in 1982, to 64 inspectors as of June, 1986. In the Seattle District, Customs staffing has decreased from 1 AAPA Testimony -3 May 27, 1986 189 inspectors in 1982, to 164 as of March, 1986. Such declines in Customs staffing, combined with an increase in waterborne cargoes, has resulted in serious delays in cargo and passenger clearances in many of our nation's ports. Clearly, delays in cargo and passenger clearances can negatively affect international trade and tourism. Certainly such delays impede efforts to enhance the sale of our goods overseas and to attract foreign visitors to our nation. Ultimately, it may hinder the ability of public port authorities to supply much needed employment to their surrounding communities. Inadequate Customs services have done far more than to limit the ability of our members to grow and expand their markets. Delays in the clearance of import cargoes have cost shippers thousands of dollars in unnecessary demurrage (storage) fees, disrupted the normal flow of commerce, and potentially resulted in the loss of sales revenue because merchandise was not available at the point of purchase. In addition, due to the advent of intermodalism, the hinterlands of ports now often span across the entire United States. As a result, delays in cargo clearance at ports are reflected in increased costs for many mid-western industries. The AAPA and our members believe that the Customs Service's fiscal 1987 authorization request, with its AAPA Testimony -4 May 27, 1986 proposed elimination of nearly 770 positions, will seriously exacerbate this problem. With over eight billion dollars in Customs receipts collected at our nation's ports in fiscal 1984, it seems that reductions in the level of Customs field positions comes close to being "penny wise and pound foolish." Last year, Congress recognized the critical need for additional Customs inspectors. At that time, this Subcommittee authorized some 800 additional positions for the Customs Service. A total of 623 positions were finally funded in the fiscal 1986 Continuing Resolution. Unfortunately, many of these positions were eliminated as a result of the $31 million cut required by the Gramm-Rudman-Hollings Budget Reduction Act. Recently, in its debate on the fiscal 1987 Budget Resolution, the Senate approved a transfer of $200 million to the Administration and Justice account. Floor statements delivered by Senators Abdnor, DeConcini, Leahy and Wilson recommended that $115 million of this $200 million be used for increased Customs staffing. AAPA strongly supports the appropriation of such funds to the U.S. Customs Service. Moreover, while we recognize that the enforcement responsibilities of the U.S. Customs Service must be adequately funded, we respectfully urge this subcommittee to provide the funding necessary for the |