June 10, 2015
Infrastructure Gets Another Short-Term Fix
Gains in public works construction will continue to be lackluster unless Congress musters the will, and the votes, to fund a long-term highway bill later this year to upgrade the nation’s crumbling infrastructure.
On May 19, the House approved another short-term fix, a two-month extension of the surface transportation bill dubbed the Moving Ahead for Progress in the 21st Century Act (MAP-21). The Senate followed suit on May 23. While this prevented MAP-21 from expiring May 31, it is not expected to give state and local governments the confidence to move ahead with new infrastructure construction projects.
“We appreciate the hard work that went into this procedural fix to ensure our highways are funded in the near term,” Thomas Gibson, president and chief executive officer of the American Iron and Steel Institute, told Metal Center News via email, “but in order for our economy to remain internationally competitive, a long-term surface transportation bill is critical.” U.S. roads and bridges needed for the transportation of goods are suffering from such a lack of investment that it is threatening commerce and the nation’s global economic competitiveness, he maintains.
Scott Hazelton, managing director of the construction service at IHS, Inc., says that if Congress continues to pass a series of short-term extensions to the highway bill, public works construction will continue to just “muddle along.”
While U.S. highway and street construction registered a small, 3 percent gain in 2014, this year spending will be level at best, predicts Ken Simonson, chief economist for the Associated General Contractors of America, Arlington, Va.
The chronic insolvency of the Highway Trust Fund, which accounts for 80 percent of all federal surface transportation spending, is at the root of the problem. Revenue collected from the existing federal fuel tax, which hasn’t been increased since 1993, has long been insufficient to meet funding needs. “What is really needed is a reliable and sustainable funding mechanism, such as a user fee in the form of a gas tax or a similar measure that requires those that use the nation’s highways to also pay for their upkeep,” Gibson says.