With the economy showing signs of breathing on its own, the road and bridge industry is huffing and puffing for more action on Capitol Hill.
Industry leaders carried an urgent tone during a day full of informative sessions at Roads & Bridges Live: State of the Industry—Funding in Arlington, Va.
King Gee, associate administrator for infrastructure for the Federal Highway Administration, opened the meeting stressing the need to find other funding mechanisms beyond an increase in the federal gas tax to support the reauthorization bill. However, finding new money is not going to help lessen the competition passing through the chambers of Congress.
“Energy, environmental matters, healthcare and cap-and-trade come first before the transportation bill,” he said. “That will put the transportation bill in a reactionary position.”
Gee and other presenters at the live event did not have much confidence that a new bill will be passed before 2009 is over, but David Bauer, senior vice president of government relations with the American Road & Transportation Builders Association, pointed out that the next transportation bill is in much better position than the beginnings of SAFETEA-LU, which suffered through 13 funding extensions before becoming finalized.
“Back in 2003 the House and Senate got their bills going three months after TEA-21 expired,” Bauer said. “Today the House is about ready to introduce its bill and the Senate is further along than people give them credit.”
Bauer reiterated the funding dilemma, and stated Congress can do one of three things to support the transportation industry through the next six years: deficit-spend, cut investments or raise revenues.
“People on the Hill are pushing for a robust bill,” he said. “Anyone who has objectively looked at this is saying that we need to raise revenues.”
In the meantime, business continues to be slow despite the spurt of funds coming from the American Recovery & Reinvestment Act. Ken Simonson, chief economist for the Associated General Contractors of America, said spending in highways and streets in April was up just 1% compared to a year ago, and he did not anticipated much growth moving into 2010.
“The amount of money coming through the regular channels is dropping as fast as the stimulus money is coming in,” he explained.
And with China and India getting ready to fire up infrastructure projects again, Simonson indicated that material prices, which have been relatively tame after a ferocious 2008, could again climb in 2010 by as much as 8%.
On the equipment side, a small blip of increased activity is expected to close out the year before more steady growth settles in by the early portion of 2011. In fact, John McClelland, vice president of government affairs for the American Rental Association, said the rental industry could see as much as $40 billion in total revenue by 2013.
