By: Bill Wilson
The people’s choice should have a day in The People’s Court. Elected officials are often put on the hot seat, but heading into an election year the judging can be especially harsh. According to a Roads & Bridges survey, over 81% disapprove of the job Congress has done for the road- and bridge-building industry. However, the reasons why deserve some deliberation, according to Brian Deery of the Associated General Contractors of America.
“There are issues in which Congress has not been good for the industry,” he told Roads & Bridges.
Perhaps the darkest of them all is immigration reform. According to Deery, Congress’ failure to approve a comprehensive package struck a nerve with the infrastructure segment, leaving many with a bill of repercussions.
“A contractor has dual requirements,” he said. “On the one hand they need workers and they are hiring people and putting them to work, and they can only ask for certain kinds of documents and they can’t discriminate. On the other hand Congress and the administration are saying [contractors] need to crack down and not hire illegals when they don’t really give them the tools to prevent that from happening.
“That’s certainly a dissatisfaction.”
Then there is the hand of the contractor, which is expected to be a little lighter on payday when the 3% withholding provision grabs hold in 2011. The new law requires all public owners to withhold 3% from contractors on all procurement activity. Deery said the move could leave buildings fighting for air. Most make anywhere between 1% and 2½% profit on road- and bridge-building jobs.
“So when you are withholding 3% you are basically withholding all of the profit,” said Deery. “Say if a county withholds the money, then there has to be assurance that the county is going to submit the money to the federal government so the federal government could return the money when the contractor submits its tax return.”
Congress, however, is trying to keep the cash register open and accessible under SAFETEA-LU requirements. On Nov. 8, the House and Senate conferees approved a $41.2 billion appropriations bill for highway and bridge spending in FY 2008. The move adheres to the funding levels of SAFETEA-LU and includes an additional $1 billion in bridge funding in response to the I-35W collapse in Minneapolis. Transit funding of $9.65 billion also was included.
Here is where leadership at the White House deserves the interrogating. President Bush has issued a veto threat because the level of funding does not match his budget, which requested that $631 million in Revenue Aligned Budget Authority (RABA) funds not be provided. RABA is the driving funding mechanism of SAFETEA-LU. The president also objects to the additional $1 billion in bridge money.
According to the Roads & Bridges survey, over 66% believe President Bush has not adequately served the industry. The dissatisfaction carries over to U.S. DOT Secretary of Transportation Mary Peters. Over 61% refuse to applaud her work.
In recent months Peters has tried to pull the federal government from the funding class, endorsing more privatization and congestion management strategies at the state and local level.
“The thing that we have been very disappointed in Mary is she is heading up this SAFETEA-LU commission that is looking at the future of the program, and she has been pushing hard for privatization and congestion management as the answer,” said Deery.
“While we firmly believe that privatization and tolling is part of the solution, there is no way it is going to solve our problems.
“In fact, most projections say no more than 10% at the most will be met through privatization.”
Give me a name
So who in Washington, D.C., will meet the needs of the road- and bridge-building industry? House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.) seems to be the one most likely to pick up the flag. Oberstar authored the National Highway Bridge Reconstruction and Inspection Act of 2007, which asked for the additional $1 billion in funding for bridges in 2008. Peter DeFazio, the highway and transit subcommittee chairman, is another emerging defender, and Max Baucus continues to show glimpses of strong support. Tom Petri, Jimmy Duncan (R-Tenn.), Kit Bond (R-Mo.), George Voinovich (R-Ohio), Jim Inhofe (R-Okla.), Barbara Boxer (D-Calif.) and Chuck Grassley (R-Iowa) are others to watch.
As for the White House, Roads & Bridges’ readers indicated they would like to see Rudy Giuliani wear the seal of the president of the U.S. Mitt Romney was a distant second, followed by Hillary Clinton and Barack Obama.
“Some of the issues I talked about earlier, those are certainly issues where Giuliani and Romney are on our side, where I think Clinton and Obama would not necessarily be,” said Deery.
People in the Giuliani camp refused to answer questions submitted by Roads & Bridges magazine about the road and bridge industry. During his campaign run, Giuliani has been riding his 12 amendments to the American people, which include fiscal discipline, homeland security and cutting taxes. As mayor of New York City, he cut taxes 23 times but did manage to balance the budget. If Giuliani is elected president, it will be interesting to see how he will handle a funding situation that right now depends largely on the rise and fall of the federal gas tax.
Topics hot to our industry may never be touched during the series of presidential debates scheduled in 2008. Over 57% of Roads & Bridges’ readers believe highway and bridge construction will not be a subject of debate. When asked if they think the general media will make it an issue, a hefty 71% said no.
“Transportation has not been an issue at the federal level,” said Deery. “You look at a lot of state and local elections, and transportation tends to bubble up higher than at the national level.
“Following the bridge collapse, if there ever was a time when people would start to think about transportation as an issue it would be now.”
Trying to heal a fracture
Minds were certainly racing shortly after the I-35W tragedy, as state DOTs rushed to check fracture-critical structures nationwide. However, Roads & Bridges’ readers believe more should have been done. When asked how the U.S. DOT and state agencies responded after the I-35W collapse, over 52% said just average.
Ray McCabe of HNTB, who testified before Congress on the state of the U.S. bridge system, believes reacting to a disaster takes time.
“Without knowing what the failure cause was, you could jump to a lot of conclusions and spend a lot of money that would provide no value,” he told Roads & Bridges. “They are doing what they need to do.”
Oberstar’s National Highway Bridge Reconstruction and Inspection Act of 2007 appears to lay a strong foundation. In addition to providing increased investment for bridge reconstruction, the bill also would strengthen bridge inspection standards and processes by requiring states to immediately inspect all structurally deficient bridges every year thereafter. All other bridges must be checked every other year.
The bill also calls on the Federal Highway Administration to immediately update National Bridge Inspection Standards and require uniformity among states in conducting inspections and evaluations. The U.S. DOT also is directed to develop a risk-based priority process for states to assign priority for the reconstruction of each structurally deficient or functionally obsolete federal-aid highway bridge. States would be required to develop and update annually a five-year performance plan for bridge inspection and reconstruction.
Due to the volume of bridges, McCabe believes forming a risk-based attack is the right way to go. However, the funding level—$1 billion—barely breaks the seal of needed improvement.
“A billion isn’t even close,” said McCabe. “New Jersey alone needs a couple of billion dollars. It is a staggering amount of money that is needed.”
Roads & Bridges’ readers believe more is needed in terms of bridge legislation. When asked which funding mechanism will be most beneficial to the bridge system, more than 56% said “none of the above.” Oberstar’s bill and the “Build America Bonds” plan took in 18.9% and 14.7% of the votes, respectively, and just over 10% went with the Missouri DOT’s plan, which entails handing bridge maintenance duties over to a contractor.
McCabe said state agencies will have one eye on the MoDOT plan.
“I believe in the Missouri case it deals with off-system bridges,” he said. “They want to take a number of bridges off the watch list so the state agency can concentrate on more critical bridges.”
