The port of Davisville, in North Kingstown, maintains a significant competitive advantage over every other port on the Eastern Seaboard, according to a three-year study by a special legislative commission. Though the port needs dredging, maintaining that advantage – the lack of harbor-maintenance taxes often used to pay for such work – is critical to its potential growth as one of the nation’s leading automobile import and export locations, as well as a receiver of other goods, the panel says.
The answer, says the panel, is the issuance by the Quonset Davisville Management Corp. of $7.5 million in revenue bonds to avoid using federal money that requires creation of a harbor-maintenance tax.
Because the Navy last dredged the port in 1977, Davisville has never received any federal funds for dredging; therefore the port and its customers are exempted from paying the maintenance fees, a federal tax imposed on shippers based on the value of the goods being shipped through ports. Set at 0.125 percent of the value of the cargo being imported, the tax equates to $31.25 of added cost to each imported vehicle worth $25,000. The savings was a major reason why Volkswagen of North America moved their operations from Boston to Davisville nine years ago, according to the commission.
Formed by the General Assembly in 2009, the port commission investigated means to grow the economy of Rhode Island’s seaports at Providence, Davisville and Newport. If all its recommendations are enacted, the ports would generate an additional 1,000 jobs, $70 million in personal income, $127 million in business revenue and $8.1 million in state and local tax revenues, the panel claims.
In its Feb. 14 report to lawmakers, the commission advocates the creation of a Rhode Island Port Marketing Collaborative that would create a venue where stakeholders such as port facilities, economic-development agencies and governmental entities can develop and coordinate economic opportunities. It also recommends the governor appoint a port economic-policy ombudsperson.
According to the study, additional opportunities exist in break-bulk imports, particularly with perishable goods. Opportunities related to offshore wind-support facilities and shipping container operations also exist but are dependent on external factors.
In order to provide these opportunities, maintenance and dredging would be required at both Davisville and Providence. In Davisville, dredging would be focused at the piers and would also include a turning basin. According to Thomas J. Sullivan, senior vice president of Moran Shipping Agencies, Inc., in Providence, the projects are long overdue.