A Big hit or many little

TK: The Office of Management and Budget once asked the USDA to consider a one-time hike in destination inspection fees that would have more quickly bridged the gap between revenues and costs. The industry would have screamed foul, but it may have been easier than trying to chain together back-to-back-to-back incremental increases.
From The Packer archives,here is the backstory from a July 2005 industry advisory committee meeting:

ALEXANDRIA, Va. -- Industry fees for federal destination inspections likely will go up faster than anticipated.
The Office of Management and Budget has vetoed a proposal endorsed in 2002 by the Fruit and Vegetable Industry Advisory Committee that recommended a 15% increase on destination inspection fees every other year beginning in 2004, said Leanne Skelton, chief of the Fresh Products Branch for fruit and vegetable programs of the U.S. Department of Agriculture's Agricultural Marketing Service.
Instead, the OMB -- a part of the executive branch of government that evaluates spending -- at first suggested an immediate 47% fee increase was required.
After discussions with AMS officials, OMB has agreed annual fee increases of 15% will be required for fiscal 2006, 2007 and 2008, followed by two more annual increases of 10% before moderating back to 5% increases for fiscal 2011 and 2012.
The current cost of a basic terminal market inspection is $99, Skelton said, but she provided no projected costs in future years.
The fee increase for beyond 2012 is projected at 3% a year, Skelton said.
Fee background: In September 2002, the industry advisory committee recommended that the USDA raise fees for the terminal market inspection service by 15% by 2004, followed by planned increases every other year after that.
That proposal was the least dramatic cost increase of four options presented to the committee at the time by Skelton. Skelton said the USDA conducted rule making on the 2004 fee increase, and the 15% increase was put in place Jan. 15, 2004. The AMS then immediately started on the 2006 increase, because rule making for each fee increase can last about 18 months.
Before 2004, the federal terminal market inspection program received its last fee increase in 1998.
A planned fee increase of 18% was dropped after the 1999 Hunts Point bribery scandal, and Congress appropriated $29 million in 2001 to cover the cost of the program through 2005. That infusion of cash prevented fee increases for several years, because federal rules don't allow fee increases for programs with large surpluses.
Because the USDA rule making involves fees, Skelton said the OMB is required to review the regulations.
The latest review on the 2006 proposed increase raised red flags at the office. According to figures released by Skelton, the income for the fresh products terminal market program was estimated at $15.1 million in fiscal 2005, while its obligations were $20.7 million. The estimated loss for 2005 is $5.6 million, leaving a reserve balance of $16.7 million estimated by the end of the fiscal year.
OMB wanted AMS to close the gap sooner rather than later, Skelton said, and suggested an immediate 47% fee increase.
OMB officials insisted that AMS needed to cover the costs of the program quicker in order to maintain a four month reserve for the terminal market program. OMB suggested the inspection service should consider shutting its doors.
In the end, OMB authorized AMS to go forward with a 15% fee increase for 2006, accompanied by other cost-cutting measures and annual fee increases in subsequent years.
Skelton said the 15% annual increases will get the program back to healthy fiscal levels quicker than the previous plan of 15% increases every other year.