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The Infrastructure Plan and Construction

BY DEBRA WOOD

Roads, bridges, airports and other infrastructure need more funding. The White House proposed a $1.5 trillion infrastructure package, but members of Congress have their sights focused on the midterm elections.

“This was supposed to be a hot topic in November 2016,” says James Roberts, president and CEO of Granite Construction Inc., headquartered in Watsonville, California, a member of multiple AGC chapters, and active at the national level. “It was a somewhat bipartisan opportunity to get real value for the country. It is mesmerizing that we are sitting here in mid-2018, and we have little-to-no progress on a national infrastructure bill.”

Brian Deery, senior director, Highway & Transportation Division, Government Relations at AGC of America, explains “there’s not a lot of time left between now and the election to get a lot done on the Trump infrastructure proposal. We are pushing for it to happen, but in the meantime, there are infrastructure-related bills moving along.”

CONGRESSIONAL OMNIBUS BUDGET BILL
The two-year budget agreement passed earlier this year included about $21 billion in fiscal years 2018 and 2019 for infrastructure projects. The Omnibus Appropriations Act of 2018 made some of this money available for numerous projects and agencies this year.

“Anytime you can get a two-year budget instead of a one-year budget is good for [contractors],” Roberts says. “It isn’t just the amount of funding but also the longevity of the funding that creates value.”

Roberts adds that the continuing resolutions that Congress has historically implemented has made it difficult for contractors and state departments of transportation to plan ahead. The additional monies beyond traditional funding will be beneficial in getting more projects built.

“We are in better shape than we would have been otherwise,” Roberts says. “This is a positive move.”

Money should be allocated in 2019.

“That is something AGC will be lobbying heavily on, talking to appropriation committees to make sure the money in the budget agreement is in the final funding bill,” Deery says.

The government directed the 2018 money into several different traditional infrastructure programs. About $3.5 billion was allocated for federal-aid highway projects to be distributed to states using a standard formula. An additional $1 billion was set aside for Transportation Investment Generating Economic Recovery (TIGER) grants, bringing the total to $1.5 billion. About one-third of the grants are targeted for rural communities.

The U.S. Department of Transportation has proposed changes to the TIGER grant program to include as a factor in the granting of such awards state and local governments’ ability to raise funds. U.S. Senators Susan Collins (R-ME) and Jack Reed (D-RI) wrote to Transportation Secretary Elaine Chao about their concerns the new matching requirement would “diminish the effectiveness of this grant program.” Collins and Reed were among the lawmakers who created the TIGER grant program in 2009.

Additionally, the budget agreement included $3.1 billion for railways, $500 million for water treatment and $1 billion for airport infrastructure, primarily for smaller general aviation airports. The U.S. Corps of Engineers received about $918 million additional funds for water resource projects, including ports, flood control and water supply.

The infrastructure spending also includes money for commerce, justice and NASA facilities, General Services Administration construction projects, Centers for Disease Control and Prevention buildings, Veterans Affairs medical facilities, Homeland Security projects, Environmental Protection Agency infrastructure and Superfund clean-up projects, and $1.9 billion for state and local communities’ infrastructure needs.

Join AGC’s #BetterInfrastructure Campaign
The best way to ensure that Congress enacts new infrastructure funding is for AGC members to make their voice heard. We have been, and will continue, sending out legislative action alerts urging members to contact their Congressional delegation. And we are urging all members to follow our social media campaign at facebook.com/BetterInfrastructure to send Facebook and Twitter messages to Congress. We will also continue knocking on doors throughout Capitol Hill and holding media events in key districts to push for new federal infrastructure funding. Ultimately, we need to build a bipartisan coalition in Congress to overcome opposition from anti-Trump liberals and anti-infrastructure conservatives to get new infrastructure passed. The more members of AGC who make their voice heard, the better our chances will be of getting some significant, and needed, new infrastructure funding enacted.

AGC ON BOARD
“AGC does a very good job in helping at the Washington, D.C. level,” Roberts says. “They are strong and involve us as needed. They get us in front of the decision makers. They provide us with details to go to the representatives to make a strong push for the right things.”

Members of AGC have flown into Washington to meet with members of Congress and their staffs to discuss the importance of infrastructure funding. Other members send letters or emails notifying their representatives and senators about their priorities.

“The newest thing is social media and digital advertising to get the attention of Congress,” Deery says. “They really pay attention when someone sends out a tweet saying, ‘I just met with so and so, and he is not supporting this.’”

Deery explains Twitter and other social media can reach more people than an email to a single member of Congress. Consequently, AGC uses Twitter and other social media outlets to support its traditional advocacy efforts.

THE FAA BILL
A Federal Aviation Administration (FAA) Reauthorization Act of 2018 bill (H.R.4) passed in the House of Representatives with strong bipartisan support. That bill would provide funding for airport construction. The legislation would add an additional $1 billion in airport spending for each of the next five years.

“I support it for a host of reasons,” Roberts says. “It’s a longer-term bill, which is beneficial.”

A concern of AGC members is the House did not eliminate or raise the amount of the passenger facility charge placed by airports. It has been capped at $4.50 per ticket.

“We are trying to get that cap raised, to double it,” Deery says. “It’s an important funding mechanism for capital improvements at large airports.”

WATER RESOURCE DEVELOPMENT ACT
The yet-to-be-filed Water Resource Development Act will fund U.S. Corps of Engineers’ flood control, locks on the Mississippi, ports and Everglades restoration. AGC prepared a list of priorities for the bill, including incentives for project completions and money for harbor maintenance and inland waterways.

SURFACE TRANSPORTATION BILL
Congress has to pass the surface transportation bill every five years to fund road, bridge and transit projects. The bill distributes the Highway Trust Fund moneys, supported by the gas and diesel tax, and spells out how the funds can be used. The next bill is due in 2020.

“That is an important bill for state departments of transportation to do long-term planning,” Deery says. “We are running out of money in the Highway Trust Fund. By 2020, if Congress does not increase the motor fuels tax, it will have to come up with extra money from somewhere else to maintain current funding levels.”

The amount of the gas and diesel fuel tax per gallon has not gone up since 1993, despite the cost of construction increasing. At the same time, electric cars and more gas-efficient vehicles have decreased the amount of money raised. Roberts suggests short-term indexing of the motor fuels tax and long-term dedicated new revenue sources.

“It’s a huge disappointment that Congress would allow the Highway Trust Fund to remain insolvent,” Roberts says. “States have stepped up and raised gas taxes to ensure they have solvency in their programs. This is something Congress has to address…It is time for the federal government to step up.”  ◆

PREPARING FOR COMING INFRASTRUCTURE PROJECTS Increases in infrastructure spending could be a boon to contractors across the country. “People are looking at how I can become part of that,” says Jake Morin, niche president of construction at ProSight Specialty Insurance in Morristown, New Jersey. The process to become a federal contractor requires an apprenticeship program, which will be overseen by a commissioning officer. Morin recommends working with an insurance agent and carrier with experience working the federal system that can provide the required insurance coverage. Contractors should be able to mobilize quickly, even if the bid was a seemingly long period in the past. Quality of work, speed and reputation is extremely important, Morin says. The federal government will be scrutinizing bids, looking for U.S. materials and nimbleness of suppliers to deliver in a timely fashion. “There is a lot of opportunity within this space,” Morin says.

Photo: Granite crews working on Loop 202 South Mountain Freeway in Phoenix. Photo courtesy of Granite Construction Inc.

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