Belle of the Ball, or Cinderella after midnight?

By Jeff Solsby, Director of Public Affairs, American Road & Transportation Builders Association (ARTBA)

"With the stimulus bill, the road construction industry must be sitting pretty!" You've probably heard that line recently, too. In the eyes of many, the industry is uniquely benefiting from the economic stimulus bill by working on some of the 6000 stimulus-funded projects nationwide.
 
But the reality is very different. Without near-term action on a robust, multi-year surface transportation authorization bill, the industry could look more like Cinderella at 12:01AM, than the glamorous 'Belle of the Ball.'
 
There is some good news. The American Recovery and Reinvestment Act has produced some benefits for our industry. Indeed, the highway and bridge funding in the stimulus law, coupled with the FY 2009 appropriations bill, this year will produce record levels of federal surface transportation investment. This infusion of federal money has helped soften the blow of a severe economic downturn and helped protect existing industry jobs. Construction material prices have also decreased.
 
Notably, there was a dramatic turnaround in May when $6 billion of new highway and bridge projects were awarded compared to $5.2 billion in May 2008 – a 33 percent increase. We're likely to experience similar positive trends over the next few months as the construction season peaks and the stimulus funds keep flowing.
 
But federal programs are only one part of the overall transportation market. Virtually every state is facing budget shortfalls and, according to the National Governors Association, 15 states have cut transportation investment in 2009 and 19 states will make similar reductions in 2010. At the same time, Congress had to inject another $7 billion into the Highway Trust Fund to meet obligations through the end of FY 2009, and there is no doubt more will be needed for FY 2010.
 
While the stimulus is a bright spot, the state budget reality means that stimulus funds are simply allowing states to maintain current activities, or just easing the impact of significant budget cuts. It is this confluence of challenges that makes the current push by some to delay the reauthorization of the highway/transit program until March 2011 mind boggling. We learned the hard way from 2001 to 2005 that a prolonged period of uncertainty at the federal level, during a time of economic and state budget difficulty, produced severe market stagnation and stymied efforts to deliver surface transportation improvements.
 
Recent data from ARTBA Vice President of Economics & Research Bill Buechner, Ph.D, shows that the value of highway construction put in place "drops off like a cliff," starting in FY 2011 once the effects of the stimulus wear off. We've known for four years the reauthorization bill was due at the end of September. Yet, over the past few months, I have seen enough political hand-wringing about why now is not the right time to act on a bill to make you wonder why some people decide to get out of bed in the morning.

In the real world, delay means paralysis – for revenue, for business development, and for market expansion. The only people who might possibly see any benefit from such a delay are narrow constituencies operating inside the DC beltway where delay has become a time-honored legislative tactic.
 
According to a new study, deficient roadways contribute to 22,000 fatalities and cost the nation $217 billion annually. And the latest Texas Transportation Institute report finds the traffic congestion 'tax' has reached $87 billion. America's outdated transportation system is a major impediment to U.S. competitiveness in the global marketplace. These challenges will not solve themselves.

ARTBA is working daily to advocate its views to Congress and the Obama Administration about the need to complete action on a bill, either by the end of this year or in early 2010. But we cannot achieve success without a united and national industry effort. That means workers, managers, executives and leaders from across the industry must mobilize to tell Congress what action means to our industry – and to their families and the economy as a whole. We must let them know the real-world impacts of delay will mean lost jobs in their state/district and deferred purchasing decisions.
 
We may be seen as the Belle of the Ball by some, but if we don't work to actively protect our own interests, we'll turn back into pumpkins and have no one to blame but ourselves.

You can contact the ARTBA Action Hotline at 1-888-448-2782.