Tag Archive for 'Highway Bill'

The Socio-economic Importance of Road Construction

By Krysten Jetson

Airoport

http://en.wikipedia.org/wiki/Airport

Excellent infrastructure is the backbone and chief driver of socio-economic development, which every country strives to achieve. In the US during the 1950s and 1960s, massive and strategic investment was made to build world-class interstate highway systems and transportation infrastructure. All this contributed in making our country the undisputed world leader and an economic superpower. Investment in surface transportation helps to connect people, drive commerce and maintain global competitiveness. At the aggregate level, efficient transport systems reduce costs in many economic sectors by providing better accessibility to markets, increasing employment, bringing in foreign investment and improving global presence of countries. Transport carries an important social, economic and environmental load, which can never be over-stated.

The socio-economic significance of infrastructure development is extensive. Let’s have a look into the impact of infrastructure development on our lives.

Economic effects of transportation infrastructure

In the US, the Federal Highway Administration estimates that $170 billion in capital investment would be needed on an annual basis to significantly improve conditions and performance of our infrastructure. Once the envy of the world, America’s critical infrastructure, including its roads, bridges, mass transit systems and systems for delivering energy, may soon find it difficult to meet society’s needs. Let’s see how the transport infrastructure affects the economy.

1)    Mobility and economic effects. Economies that possess greater mobility are often those with better opportunities to develop, than those with scarce mobility. Reduced mobility impedes development while greater mobility is a catalyst for development. According to recent reports, forty-two percent of America’s major urban highways remain congested, costing the economy an estimated $101 billion in wasted time and fuel annually. Better roads and connectivity can translate into massive savings, both for the state as well as citizens. Transportation also weaves a complex web of relationships between consumer, manufacturer and distributor. The productivity of space, capital and labor is enhanced with the efficiency of distribution and personal mobility.

  • Less cost. A more efficient distribution and procurement network directly results in lesser prices for consumers. This is because transportation costs form a major chunk of the total cost of each output in manufacturing.
  • Wider reach to business. With better transport facilities there is access to a wider market or consumer base which leads to better economies of scale in production, distribution and consumption.
  • Better and diverse products. Good infrastructures give access to larger and diverse base of quality inputs, and broader markets for diverse outputs. This is good for the consumer as well as the manufacturer.
  • Increased competition. When transportation is efficient, there is a wider market for goods and services, resulting in increased competition. A wider array of goods and services to choose from, reduced cost and improved quality are some of the benefits passed on to the consumers. Also, this promotes innovation and technological advancement.

2)    Mobility and economic opportunities. Transportation development and improvement that took place since industrial revolution has shaped and transformed economies and social geography of nations.

  • Attractive to foreign investors. Excellent infrastructure has always made the US an attractive destination for global corporations to invest and do business in. Good connectivity lowers transport costs, and contributes to reliable and cost-efficient supply chain management. A poor transport service level can negatively affect the competitiveness of regions and corporations, and thus have a negative impact on the brand value of our country.
  • Attractive to new-age businesses. Transport infrastructure is always important, but their relative importance in supporting the changing demands of economy  may evolve. When an economy shifts from being manufacturing-based to service-based, there is more orientation towards efficiency of logistics and urban transportation. An infrastructure that grows and evolves to support the changing needs of the economy is attractive to both businesses as well as stakeholders like new-age employees and students.
  • Increased employment opportunities. A growing economy opens up new and expanding range of employment potential as well. New businesses and sunrise industries are voracious creators of job opportunities. The ‘feel good’ vibe that they bring into ageing, developed economies can be quite rejuvenating and energizing. Transport systems need to evolve in time and space as they include the timing and the nature of the impact of transport on economic development.

Social effects of transportation infrastructure

Roads and bridges change the face of landscapes. Increased connectivity brings societies closer to the outside world, and brings in influences from far and wide. The societal and cultural impacts are many.

  • Mobility benefits. Though societies on the whole reap benefits of growing and improved connectivity, some people enjoy it more than the others. Higher the income, the more the opportunity to benefit from infrastructure growth and economic opportunities. They also have increased ability to afford travel. Inclusive growth, by promoting connectivity in rural, under-developed and poorer regions can help all sections of society benefit.
  • Rising land value. With roads and highways linking vast areas of land with cities and towns, land prices also show a trickle-down effect from those in urban locations. There has been quite marked and sharp increase in land prices observed once infrastructure improves.
  • Improved quality of life. When transportation facilities increase, especially in far-flung and land-locked areas, prices of goods and services come down drastically. A wider array of products is available at reasonable prices. This helps to improve household finance and savings.
  • Congestion and accidents. A growing population and ageing infrastructure leads to overcrowding and congestion in urban areas. Serpentine traffic-jams lead to wastage of time, fuel and energy. Accidents also become common. Environmental pollution used to be a major issue, but with strict emission laws there is a continued effort to curb the menace.

Conclusion

Infrastructure determines the longevity and success of a nation. A good, upgraded and efficient transport infrastructure is essential for a strong and thriving economy. According to the American Society of Civil Engineers, an investment of $3.6 trillion will be needed by 2020 for the repair, upgrade and development of infrastructure. But the available funds are nowhere near this gigantic figure. Experts say that while it is important to have more money because the needs are so great, there is also a need to cut spending on shiny new projects in places with insufficient demand. The authorities need to spend on maintaining and improving infrastructure in the places with some of the greatest need.

Author Bio:

Krysten Jetson is a freelance writer specializing in the construction industry. She loves sharing her expertise on various aspects of the construction industry, especially safety, such as fall protection, workers safety etc. She has many years of professional experience including working with clients to build their business and brand through internet marketing strategies.

ARTBA Launches “Transportation Investment Advocate Center” To Help Move State & Local Campaigns

image001The American Road & Transportation Builders Association (ARTBA) recently announced the start-up of the “Transportation Investment Advocacy Center™” (TIAC), a first-of-its kind, dynamic education program and internet-based information resource.  The program is aimed at helping private citizens, legislators, organizations and businesses successfully grow transportation infrastructure resources at the state and local levels through the legislative and ballot initiative processes.

The cornerstone of the new program is the website, www.transportationinvestment.org.  ARTBA Chairman Doug Black says the site has been structured “so those interested in making action happen do not have to ‘re-invent the wheel’ to mount successful campaigns.” The idea, he said, is “to put in one place—and promote the sharing of—current strategies, sample political and communications tools, legislative and ballot initiative language, and information on where to obtain professional campaign advice, research and help.”

image003The transportationinvestment.org site features 39 detailed case studies of recent transportation funding campaigns—both successful and unsuccessful—mounted in 28 states.  It includes the actual television, radio and print ads, polling data, and media and coalition strategies used in the campaigns.  The site features a blog, which will be updated regularly with new developments and economic-based research and messaging developed by ARTBA to help frame the political debate.  An overview of funding and financing mechanisms utilized to support state and local transportation programs is also included.

Complementing the dynamic website site, the TIAC program includes an annual workshop to be held in Washington, D.C., and ongoing webinars for transportation investment advocates featuring case studies, best practices, and the latest in political and media strategies.

The inaugural “National Workshop for State & Local Transportation Advocates™” will be held July 16 at the Washington Court Hotel on Capitol Hill.  The workshop will be marketed to state and local chamber of commerce executives, state legislators, state and local transportation officials, “Better Roads & Transportation” group members, industry and labor executives, and leaders of state and local chapters of national organizations with an interest in transportation development programs.

The Transportation Investment Advocacy Center™ is a project of the American Road and Transportation Builders Association’s “Transportation Makes America Work!” (TMAW) program and funded through voluntary contributions and sponsorships. To become a sponsor or to make a contribution, contact TIAC staff directly through the website.

Established in 1902, ARTBA represents the U.S. transportation design and construction industry in the Nation’s Capital.

Meeting a Federal Highway Trust Fund Crisis: A Profile in Courage … and

ARTBAFebruary 28 is a special day in the history of the federal highway program and Highway Trust Fund that supports it.  On this day, 53 years ago, President John F. Kennedy (JFK) saw a threat to the nation’s future economic growth and security and grabbed the reins of leadership.

The year was 1961.  Americans were paying 27 cents per gallon for gasoline, including a 4 cents per gallon federal gas and diesel fuel tax to support capital investments though the federal highway program in their personal mobility and the nation’s economy and security.  The 2014 equivalents would be a 31 cents per gallon federal gas tax on a $2.11 gallon of gasoline.

“Our federal pay-as-you-go highway program is in peril,” JFK said in the first sentence of a “Special Message to the Congress on the Federal Highway Program” sent up to Capitol Hill that day.

The problem:  the user based revenue stream going into the Highway Trust Fund was not sufficient to sustain the level of authorizations necessary to keep the highway program running without going into deficit spending.  Kennedy told the Congress $900 million more dollars per year ($7.04B in 2014 dollars) was necessary.

“Our objective,” Kennedy said, “is to finance this program on a pay-as-you-go basis from… user taxes… at rates sufficient to pay the full cost of the program, without charge on general federal revenues… “The pay-as-you-go principle… requires an increase in the revenues from user taxes…”

It is clear, he said, “that a program essential to the nation, and to [the public’s] own welfare, requires that they cooperate in determining how present sources are to yield the additional revenues needed.”

Kennedy offered what he called “A New Plan to Finance the Highway Program.”  He urged Congress to sustain the federal gas tax revenue stream and increase the user fees on trucks—the federal diesel fuel excise increased from 4 cents per gallon to 7 cents; truck weight excise for vehicles over 26,000 lbs. from $1.50 per 1,000 lbs. to $5.00 per; the excises on sale of new tires from 8 cents per tire to 10 cents, the sale of tire inner tubes from 9 cents per to 10 cents, and tread rubber from 3 cents to 10 cents.

On June 29, 1961, the 87th Congress of the United States responded, approving the “Federal Aid Highway Act of 1961,” (Public Law 87-61), generally following the path outlined by the President.

The Highway Trust Fund crisis was averted.  Filling out and construction of the 41,000-mile Interstate Highway System and ongoing improvements to the 848,677 miles of state roads deemed worthy of federal investment due to their importance to the nation’s economy and security continued forward.   No American jobs were lost.

Footnote:   Despite claims to the contrary, the federal gas tax is not “broken” or “outmoded” as a mechanism to raise user revenue for the Highway Trust Fund.  The only problem with the gas tax as a revenue generator is that the rate has been frozen for 20 years and the rate has never been indexed, or adjusted, to keep pace with annual price inflation or to meet identified needs.  It is a fact that if Congress had indexed the 1961 federal gas tax rate of 4 cents per gallon to future annual inflation, the gas tax alone would be generating almost $56B this year for Highway Trust Fund investments.  There would be no 2014 HTF crisis looming October 1 that could shut-off federal investment for any new state transportation department highway, bridge and transit projects during FY 2015.  It is also a fact that today’s 18.4 cents per gallon federal gas tax has 50 percent less purchasing power than the 4 cents per gallon tax had in 1961.

Trust Fund in Crisis

TRIP Reports: As Harshest Winter In 30 Years Depletes Road Maintenance Budgets And Causes A Bumper Crop Of Spring Potholes, Nation Faces Looming Summer Cut To Federal Transportation Dollars

TRIPA bumper crop of potholes is emerging on the nation’s roads as a result of a winter that, in many regions, has been the harshest in 30 years.  Across the nation, more than a quarter of major urban roads are already in poor condition, and in some cities, as many as two-thirds of major roads are in poor condition. Those conditions were already projected to worsen due to a lack of transportation funding at the local, state and federal levels. But states and cities could experience even further deterioration as a result of the harsh weather conditions that have caused approximately three-quarters of states and many cities to exceed their snow removal budgets, forcing them to reallocate monies that would otherwise be available for road repairs.

Pavement failure is caused by a combination of traffic, moisture and climate. Moisture often works its way into road surfaces and the materials that form the road’s base, damaging their foundation. Extreme freeze-thaw cycles exacerbate the rate of pavement deterioration and can cause increased rutting and cracking.

Rough roads are more than just a nuisance for motorists. Driving on deteriorated roads costs the average urban driver $377 annually – a total of $80 billion nationwide.  In areas with the roughest roads, drivers lose as much as $800 each year. These costs include accelerated vehicle depreciation, increased maintenance, additional fuel consumption and tire wear. This is according to a report released by TRIP in October 2013 titled “Bumpy Roads Ahead: America’s Roughest Rides and Strategies to Make our Roads Smoother”.

The Federal surface transportation program is a critical source of funding for states. The impact of inadequate federal surface transportation revenues could be felt as early as summer of 2014, when the balance in the Highway Account of the federal Highway Trust Fund is expected to drop below $1 billion, which will trigger delays in the federal reimbursement to states for road, highway and bridge projects. Because of this funding delay and uncertainty, states will likely delay or postpone numerous projects.  And, if a lack of adequate revenue into the Federal Highway Trust Fund is not addressed by Congress, funding for highway and transit improvements throughout the nation could be cut by $44 billion for the federal fiscal year 2015, beginning October 1, 2014.

“America’s already deteriorated road conditions are only going to get worse if greater funding is not made available at the local, state and federal levels,” said Will Wilkins, TRIP’s executive director. “Unless Congress acts this year to adequately fund the Federal Highway Trust Fund, all states are going to see their federal funding decrease dramatically starting this summer. This will result in fewer road repair projects, loss of jobs, higher vehicle operating costs for drivers, and a burden on state economies.”

MIT Research Points to Importance of Road Design in Fuel Consumption

PCA LogopRecently President Barak Obama announced plans to introduce a rule for higher fuel efficiency standards for medium and heavy-duty trucks by 2016. At an appearance at a grocery distribution center in Upper Marlboro, Md., President Obama charged Department of Transportation Secretary Anthony Foxx and U.S. EPA Administrator Gina McCarthy to “develop fuel economy standards for heavy-duty trucks that will take us well into the next decade.”

According to the White House, heavy-duty trucks account for just four percent of highway vehicles, but are responsible for 20 percent of carbon pollution from the transportation sector. Current fuel-economy standards are aimed at reducing truck fuel use by as much as 20 percent.

Gregory M. Scott, president and CEO of the Portland Cement Association, said it is time to not only look at the efficiency of cars and trucks on the road, but to look at the actual road for fuel economy and emission reductions.

“We should expand the debate beyond making more efficient cars and trucks to making more efficient infrastructure. Stiffer pavements – such as pavements made from concrete — produce less rolling resistance and better fuel economy,” Scott said.

Researchers at the MIT Concrete Sustainability Hub recently found that how the road is constructed could have a significant impact on the fuel economy of cars and trucks. Research models predict the use of stiffer pavements, for example, could reduce fuel use by as much as three percent, a savings that would add up to 273 million barrels of crude oil per year.

Florida International University tested MIT’s research models in real-world conditions with similar results. They studied vehicles traveling on I-95 and found that riding on rigid pavements consumes 3.2 percent less fuel than riding on flexible pavements for passenger vehicles and 4.5 percent less fuel for loaded tractor-trailers. If all Florida pavements were rigid, it could amount to an annual fuel savings of more than $2 billion for highway users.

About PC

Based in Washington D.C. with offices in Skokie, Ill., the Portland Cement Association represents cement manufacturing companies in the United States. It conducts market development, engineering, research, education, and public affairs programs. More information on PCA programs is available at www.cement.org.