The Building Tradesman Newspaper

Friday, February 22, 2019

News Briefs

By The Building Tradesman

Bond money for roads a non-starter

LANSING – It won’t be easy to gather up the political courage – in the form of finding new money – to “fix the damn roads,” as pledged by Gov. Gretchen Whitmer.

After all, decades of financial neglect have led to the physical neglect of the roads, leading to Michigan having the worst or among the worst roads in the nation by some rating organizations. Former Gov. Rick Snyder’s 21st Century Infrastructure Commission said the state needs to spend about $2.6 billion a year to properly repair the roads. 

Talks are on in Lansing to figure out a way to raise the new money - whether it is from increasing the state tax on gasoline sales, allocating more general sales taxes to the roads or hiking vehicle registration fees, or some other funding method. 

But what's likely off the table is bonding - borrowing money to pay for road improvements today, and then paying for the work over time. A House Fiscal Agency report released Feb. 6 revealed that the state still owes $1.2 billion in interest on road projects that were performed starting 20 years ago, and is paying this year alone $196.6 million in interest. That's just about what the state has been paying per year over the past decade. The bonds, initiated in both the Engler and Granholm administrations, aren't scheduled to be paid off until 2037.

Trump gives shout-out to infrastructure

In President Donald Trump's 80-minute State of the Union speech on Feb. 5, the U.S. construction industry had its collective antenna more tuned to his comments on the nation's infrastructure than on the hot topic of the day, border security/and another potential federal government shutdown.

The president - who has talked in the past of increasing spending on improving the nation's roads, bridges, water supply systems, sewers and the like - threw the industry a bone, but there wasn't much meat on it. He said he wants to work with Congress on legislation that would bring about a “great rebuilding of America’s crumbling infrastructure.” Trump provided no details on the spending for the plan or what projects should be targeted. 

In the 2018 State of the Union he suggested "at least $1.5 trillion" should be spent. He added that federal dollars "should be leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment to permanently fix the infrastructure deficit." 

Trump said: “Both parties should be able to unite for a great rebuilding of America’s crumbling infrastructure. I know that the Congress is eager to pass an infrastructure bill—and I am eager to work with you on legislation to deliver new and important infrastructure investment, including investments in the cutting-edge industries of the future.”

North America's Building Trades Union President Sean McGarvey said the president "rightly addressed the miserable state of the union's infrastructure. 

"For far too long, we as a nation have significantly under-invested in our infrastructure to the detriment of health and safety, job creation, and competitiveness," McGarvey said. "With President Trump’s most recent statement of support for robust infrastructure investment coupled with Speaker Pelosi and members of Congress in both parties being committed to moving an aggressive infrastructure agenda, they demonstrate that infrastructure is not a partisan issue or political issue, but an American issue with broad support, and a policy we should advance to strengthen us globally. “Americans want action and have waited too long for both sides to act. We look forward to working with all interested parties to ensure this important vision becomes a reality during the 116th Congress.”