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Highway Funding Affects You, Your Clients

By July 14, 2010 July 8th, 2014 No Comments

Chamber members’ clients rely on more than a safe roadway to travel from home to a business for the service or product they seek. They also rely on household income to make their purchases. In light of current legislation, not only do transportation funding woes jeopardize your customers’ safe travel, newly introduced woes jeopardize customers’ pocketbooks with trickle-down effect from higher user fees. Here’s what’s going on with transportation funding, and here’s how it affects you whether you’re in the road construction industry or not.

On March 17 of this year, the Senate passed H.R. 2847, the Hiring Incentives to Restore Employment (HIRE) Act, by a 68 to 29 margin. Jay Hansen, the vice president of legislative affairs for the National Asphalt Pavement Association (NAPA), Lanham, Md., said the bill “marked the first significant piece of job-creation legislation to pass since President Obama and the Democratic Congress earlier in the year declared they would focus on reversing widespread unemployment.”

Of the four main proposals in the legislation, the one that officials at state departments of transportation (DOTs), sales teams at heavy equipment manufacturing facilities, owners at road contracting companies, and a host of others were waiting for, is the Highway Trust Fund Extension. “This extends existing highway programs, which provide states and localities with the certainty they need to make decisions on projects,” Hansen said.

What Hansen and other transportation officials have been worrying about since March 17 is what happens next for transportation funding. Transferring $14.7 billion from the general fund to the Highway Account, which the HIRE Act allowed, and releasing the $43.08 billion for FY2010 that states were originally expecting merely put states in “fire drill” mode. Most state DOTs could suddenly reinstate the projects they had stopped when funding ran dry and the Safe, Accountable, Flexible, Efficient Transportation Equity Act—a Legacy for Users (SAFETEA-LU) expired last September.

What happens when the provisions in the HIRE Act expire this Sept. 30? State DOTs will likely go back to stalling projects, as they did last fall, thus contracting companies will go back to laying off workers (in addition to seasonal layoffs), as they did last fall. Original equipment manufacturers (OEMs) will lay off sales staff, mechanics, technicians in research and development, and public relations professionals in marketing departments. Service providers will stop advertising in trade journals. Government entities will lose funding intended for R&D to improve motorist safety.

To withhold money from highway funding affects more than highway users’ safety and the nation’s immediate economy.

In early May, Senators John Kerry (D-Mass.) and Joseph Lieberman (I-Conn.) introduced the American Power Act, which would assign revenue from new “fees” to climate and energy change issues. Those issues have nothing to do with transportation infrastructure, but the nation’s transportation infrastructure would foot the bill through thinly veiled user fee increases. As energy companies pay increased fees on greenhouse gas (GHG) emission taxes, they would pass the penalty on to end users in the form of higher prices at, say, the gas pump. A coalition of 28 transportation industry members, including the American Council of Engineering Companies and the American Public Works Association, sent a letter of concern to the Senators, informing them that they were diverting funds from a system in dire need of them.

“Our preliminary analysis of the bill finds that tens of billions of dollars would be generated annually from new pollution fees on transportation motor fuels. In 2013, fees from on-road fuel consumption would generate at least $19.5 billion. Instead of returning revenue from these fees to improving the transportation system, the bill diverts at least 77 percent of the funds away from transportation infrastructure investment. As carbon prices increase, the bill diverts as much as 91 percent of fuel revenues. Of particular concern, the bill limits new investment in the Highway Trust Fund to $2.5 billion per year, far below the amount the bill raises from system users.”

The American Power Act would not only cripple the Highway Trust Fund in the short-term, it would cripple the fund in the long-term. How many tourists and seasonal residents will endure Southwest Florida’s inter- and instrastate congestion when our highways and byways have fallen victim to underfunding? Are you ready to give up on brick-and-mortar business in favor of online sales only? Consider the ramifications of a failing highway system on your shipping costs.

Consider the ramifications of a failing highway system on your clients’ everyday costs. The Associated General Contractors of America (AGC), Washington, conducted a survey in late April and early May of 1,200 construction companies across the nation. AGC reported that current traffic congestion is taking its toll on the construction companies trying to alleviate it for users. They extrapolated nearly $23 billion in expenses are added to companies’ usual operating costs because of traffic delays per year. Nearly 3.7 million days of productivity are lost. Imagine what the toll is for the dentist, graphic designer, banker or baker in your rolodex.

What it all boils down to is a desperate need for logical transportation funding. Florida Congressmen need to know the impact of a failure to reauthorize highway funding on businesses here. Economics and safety should sway them to understand that undercutting the Highway Trust Fund is not sound business for anyone.

Chamber member Sandy Lender is the editor-in-chief of AsphaltPro Magazine, an international trade journal for the road building industry. She maintains a blog for the magazine at www.theasphaltforum.blogspot.com and will speak at the industry’s premier event, CONEXPO-CON/AGG 2011 March 22-26, in Las Vegas.