While Senate Democrats are still hoping for passage
of some sort of conference compromise long term reauthorization measure for the
federal Highway Trust Fund, it now appears House Republicans just want to kick
the can down the road past the presidential election. Trouble is, that maneuver
would likely put the Highway Trust Fund in insolvency.
Last week, in response to an end of press
conference question on surface transportation appropriations, House Speaker
John Boehner said, “We’re going to go with a six month extension” when the
current band aid measure expires at the end of this month. The reply from
Senate Majority Leader Barbara Boxer, who is still conducting behind closed
doors leadership meetings aimed at pushing through some sort of conference
committee long term reauthorization measure, was steely and pointed: “I am very
disappointed that Speaker Boehner is even talking about a long term
transportation extension, which would lead to the Highway Trust Fund going
bankrupt. Three million jobs and thousands of businesses are at stake.”
Boxer is right. If Congress refuses to deal now
with the long term problems facing funding for infrastructure construction in
the United States, declining motor fuel tax revenues resulting from higher
mileage cars and trucks and folks driving fewer miles, future and even current
projects for road and bridge repairs, drinking and waste water treatment
systems, rail and waterway transportation, airport expansion, and other
infrastructure construction paid for from the Trust Fund and managed mostly by
fiscally struggling state and local government agencies, will grind to a halt,
leaving skilled construction tradespeople and construction contracting
businesses across the country high and dry.
For example, Mark Foster, North Carolina’s Department
of Transportation chief financial officer, has to check his cash balance every
morning at 7 a.m., to be certain the state has not committed more spending that
it can reasonably expect to receive reimbursement from Washington for the
federal 25% of the state’s transportation funding total. “We … watch our IOU’s
from the feds very closely, in terms of what we have extended in the state dollar
in anticipation of recovering the federal dollar,” he says. “You make sure at
the end of the day, when you make a commitment, you can pay for it.” The
Congressional enactment of nine sequential temporary extensions of Highway Trust
Fund appropriations since 2009, with no effort whatsoever toward rectifying the
long term problems with federal funding for surface transportation, makes state
and local officials more and more nervous with each passing day. Foster, for
one, says he is daily attempting to avoid “hard stops and starts just based on
what is happening in Washington. That’s not fair to our industry and certainly
that causes lots of consternation locally as we make priority commitment to
certain projects.”
Nevada DOT spokesman Scott Magruder is equally
cautious. “We are monitoring our cash flow. There is a potential, yes, where
new construction projects would get delayed down the road.” Washington Governor
Chris Gregorie echoes that sentiment, remarking that the state’s major projects
“are all at risk.”
The lack of effective leadership on this issue in
Congress is appalling. The construction industry is a significant factor in our
nation’s economic recovery, and already lags well behind manufacturing and
other sectors in terms of bouncing back. Construction lost 28,000 jobs in May,
and general contractors don’t see significant revenue increases for 18 months
to two years. Construction’s share of gross domestic product has declined from
the characteristic 4% to 5% down to a historic low of a mere 3%. Construction
industry recovery is still a long way off, and political leaders in Congress
shoulder a major share of responsibility for that fact due to their refusal to
face the tough issues involved in long term Highway Trust Fund reauthorization.
Shame on them all.
