The Building Tradesman Newspaper

Friday, July 04, 2014

Focus over road repair funding now shifts to Washington

By The Building Tradesman

WASHINGTON – Raising more money to fix roads has been a problem in Michigan this year, and it isn’t any easier in the halls of Congress.

Last month Michigan lawmakers went on summer vacation and failed to approve a statewide gas tax hike that would have permanently raised about $1.7 billion per year to fix our state’s roads and bridges by increasing fuel prices by 25 cents over four years. But on a federal level, a door was opened on June 18, when Sens. Chris Murphy (D-Conn.) and Bob Corker (R-Tenn.) unveiled a bipartisan proposal to increase the federal gas tax by 12 cents, raising $164 billion for the Highway Trust Fund over the next decade.

Numerous construction industry groups, including the building trades unions, have been fretting throughout this year that the same tax cutters in Congress who shut down the government will also be willing to let slide funding for the Highway Trust Fund. That pool of money expires at the end of September but starts to dry up in July. Loss of funding would put 600,000 construction and related jobs at risk.

“Congress has patched the trust fund four times since 2008,” said American Road & Transportation Builders Association President & CEO Pete Ruane. “Every short-term fix requires more money.  The fund’s structural deficit now requires $16 billion in additional revenue every year just to maintain current investment for highway and public transportation improvements.  It is time to stop pretending this problem will solve itself.  Senators Murphy and Corker have provided one potential path forward.”

The plan by Corker and Murphy plan – important if only because it raises new revenue – would also index the federal gas tax to the inflation rate, which would institute permanent funding increases and avoid future funding showdowns and budgetary gimmicks that have been going on. Congress last raised the gas tax in 1993.

Some of the same debates that Republican lawmakers had in Michigan over how road work should be funded are being repeated in Congress. Many conservative lawmakers in both Lansing and Washington D.C. are disciples of the anti-tax groups who are against tax increases in any shape or form.

“No worries … let’s just propose a $164 billion tax increase,” tweeted Dan Holler, the spokesman for the conservative Heritage Action for America.

The Club for Growth is another influential, and objecting, conservative group. “This is a $164 billion dollar tax increase, plain and simple,” said Chris Chocola, the Club’s president. “A gas tax hike would be both bad policy and terribly anti-growth. It’s not an example of political courage to avoid reforming a broken system.”

One outlandish suggestion arose from the House Republican caucus last month, which would steer money to the Highway Trust Fund by cutting Saturday delivery service by the Postal Service. “Only in Washington would you take money from insolvent enterprise to fund another insolvent enterprise,” Corker said.

Other conservative lawmakers who are holding up money for the Highway Trust Fund are proposing that decisions over funding for road and bridge work should be moved away from the federal government and into the hands of the states.    Labor unions and road builders have maintained that that’s an argument for another day.

Stephen E. Sandherr, the Associated General Contractor’s CEO, said “quickly passing a long-term highway and transit bill will give many construction employers the security they need to begin adding to their payrolls.  It is hard to hire someone if you don’t know what the market conditions will be like next year, or even next month, which is exactly what many highway and transit contractors have to cope with right now.” 

Terry O’Sullivan, General President of the Laborers’ International Union of North America, said it “applauds Sens. Murphy and Corker for their continued bi-partisan progress in the U.S. Senate to make our roads and bridges safer and strengthen our economy by addressing the failing Highway Trust Fund with a long-term, full-investment solution.

“It’s time to end the ‘pothole penalty’ – the lost lives, accidents and damage to vehicles caused by poor roads and deficient and obsolete bridges,” he said. “Congress now has multiple, viable options to work with to address our crumbling transportation infrastructure and they should feel compelled to do so. It’s time to stop sugar-coating this issue and to take action.”

America’s Building Trades Unions President Sean McCarvey said “the safety of our fellow Americans and the vitality of our economy are being compromised,” with the state of the nation’s roads and bridges. “Yet, for far too long Congress has chosen to ignore the stark reality that a modern 21st century transportation infrastructure system costs money to build and maintain.  Steel and concrete are not free.

“Senators Murphy and Corker are to be commended for saying ‘enough is enough,’ and for putting partisan politics aside and working across the aisle to construct a serious, bipartisan solution to deal with the shortfall in the Highway Trust Fund.  Their efforts will make our country safer, will grow our economy, and will create thousands of middle-class wage jobs across the United States.”