Tag Archive for 'Highway Trust Fund'

ARTBA 2020 Forecast: American Road & Transportation Builders Association Looks at the Year Ahead for US Infrastructure

The U.S. transportation infrastructure market is expected to grow 5 percent in 2020, according to the American Road & Transportation Builders Association (ARTBA) forecast model. Increased transportation investment from all levels of government – federal, state and local – will help drive this growth across all modes. 

Market activity is expected to reach $300.4 billion in 2020, up from 2019’s $286.5 billion, after adjusting for project costs and inflation. This includes: 

  • Public and private investment for highways, bridges, public transit, rail, ports and waterways, and airport runways and terminals; 
  • Private investment for roads, streets, driveways and parking lots in residential and commercial developments; 
  • And support work by state departments of transportation (DOTs) and local governments for highway and bridge planning and design work, routine maintenance, and right of way purchases. 

The transportation construction market increased 8 percent in 2019, driven largely by gains in highway, street and pavement work, which grew by $9.6 billion to $73.1 billion.

Airport construction work on runways and terminals increased by less than 1 percent in 2019 but was still at record investment levels. Strong growth in public transit work as well as private railroad investment helped support a robust year for transportation construction activity. 

An increase in federal transportation investment through the annual appropriations process will help support increased construction market activity. Congress is once again expected to provide additional money for highway, bridge, transit and airport construction through traditional programs, as well as BUILD America discretionary grants that can be used for a variety of transportation infrastructure projects. Between FY 2018 and FY 2020, Congress will have provided between $15 billion and $16 billion in additional transportation funding, above programmed levels in the 2015 FAST Act law and the Airport Improvement Program (AIP). 

This federal investment, combined with recent increases in state and local government transportation funding, are behind the significant market gains in 2019 and will help support real increases in 2020, as projects continue to get underway. 

Four states raised their state motor fuel tax in 2019, bringing the total number of states to 31 that have increased or adjusted their rates to support transportation investment. Three states approved other recurring funding measures, five provided a boost through general funds or a new bond issue and eight states approved increased alternative fuel or electric vehicle fees. 

There were 305 state or local transportation funding measures on the ballot in November 2019. Nearly 90 percent of those measures were approved, generating an additional $9.6 billion in potential revenue that will be spent on projects over the next few years. 

Wild Card 

One wild card in the forecast is the outlook for the reauthorization of the FAST Act and the ability of Congress to find additional revenues to support the Highway Trust Fund – the source on average of more than 50 percent of highway and bridge capital investments made annually by state governments. If states delay projects over concerns about whether the next federal surface transportation bill is completed in a timely manner, this could temper 2020 market growth. 

Overall, transportation construction market activity is expected to increase or be steady in half of the states. Some of the largest markets expected to remain stable or show growth include Arizona, California, Florida, Illinois, Michigan, Minnesota, New York, North Carolina, Texas, Washington, and Wisconsin. Recent funding increases in Ohio and Illinois should help programs in those states as new revenues are collected. 

Other market factors include uncertainty over material prices, increased labor costs and potential labor shortages in some regional markets. 

ARTBA estimates project costs rose 1.3 percent in 2019 (compared to 1.7 percent for general inflation) and 2.4 percent in 2018. The forecast assumes that project costs in 2020 and beyond will increase 2.3 percent as energy prices stabilize, which is in line with general inflation. 

Overall, the price of various materials and other inputs for highway and bridge construction rose about 3 percent, according to ARTBA estimates of data from the U.S. Bureau of Labor Statistics. Energy costs for highway and bridge contractors, driven largely by diesel fuel prices, are estimated to have declined by 9 percent in 2019. Historically energy costs have been volatile, increasing or falling by as much as 20 percent or more in a given year. 

Price data shows that average annual prices in 2019 for steel products – such as guardrails, scaffolds, gratings, bridge expansion joints, steel bars and tubing – were up between 2 and 3 percent, depending on the type of product, compared to 2018. The year before the same products had increased in the range of 6-19 percent. The cost of producing construction machinery tractor shovel loaders, mixers, pavers and similar equipment was up 5 to 6 percent in 2019. It is still difficult to isolate the impact of tariffs on the price of steel-related products from other market forces, such as the cost of energy, transportation or input materials. 

But the uncertainty created by the steel and aluminum tariffs enacted in March 2018 will continue to have an impact on the highway construction market as contractors include that dynamic in their bids and cost structure. The larger threat of trade wars, to the extent that it would impact the overall U.S. economy, state and local revenues, could eventually also have adverse effects on transportation spending. 

Industry employment for highway, street and bridge contractors was up 4 percent for all workers and 5 percent overall for employees on the job site, marking six years of consecutive gains. The average weekly hours worked has remained steady, indicating contractors are hiring more workers, rather than using more overtime with existing employees. 

Industry wages for employees on job sites were up 3 percent in 2019, slightly above the average of 2 percent for all construction production workers. The real value of the industry earnings, when adjusting for inflation, increased 2 percent – the most substantial increase in real income for all workers in highway and bridge construction in four years. 

More detailed information on each mode is included in the full report. By infrastructure mode, forecast highlights include: 

Public and Private Highway, Street and Related Construction

ARTBA estimates that work on private highways, bridges, parking lots and driveways will increase from $69.1 billion in 2019 to $71.8 billion in 2020 and will continue to grow over the next five years as construction market activity increases in those sectors. This data is captured by the U.S. Census Bureau as part of residential and commercial construction investment. The real value of public highway, street and related construction work by state DOTs and local governments – the largest market sector – is expected to increase by 6 percent to $77.5 billion after growing 15 percent in 2019. 

  • Continued highway construction activity in major markets is expected to support national gains. State and local government highway contract awards are up in 26 states in 2019 compared to a three-year historical average, a leading indicator of highway construction activity in those states. 
  • The market impact of the $7.5 – $8.5 billion increase in federal transportation investment through the FY 2018, FY 2019, and FY 2020 appropriations process will vary, depending on the timing of state obligations and the awarding of projects through several U.S. Department of Transportation (DOT) discretionary programs. But overall, this boost will contribute to market growth in 2020. 
  • The increase in state and local revenues through user fee increases, bond programs, ballot initiatives and other funding mechanisms will support additional market activity next year. The exact impact will vary by state, and how the revenue increase is structured. 

Of the 14 state markets that are $1 billion or more, representing over two-thirds of the market, contract awards were up or stable in 11 states last year compared to the previous three-year average. These states include California, Florida, Illinois, Michigan, Minnesota, New York, North Carolina, Pennsylvania, Texas, Washington, and Wisconsin.

Bridges and Tunnels

The pace of bridge and tunnel work stayed flat in 2019 and is expected to grow by $800 million, or 3 percent, in 2020. Bridge and tunnel market activity fell slightly from $28.8 billion in 2018 to $28.6 billion in 2019, after adjusting for project costs and inflation. Market activity is expected to grow to $29.4 billion in 2020, with the pace increasing 2-3 percent annually over the next five years. 

  • Based on recent contract awards data, work is expected to be up or stable in 15 states compared to three-year historical averages. 
  • Some states are continuing to focus on bridge work, but with a greater emphasis on repairs to the local network. 
  • Missouri recently issued a $50 million bond to support their bridge program. Kentucky recently announced a new six-year program that will repair 1,000 local bridges. Other states include Iowa, Kansas, Oklahoma, and West Virginia. 
  • The 2019 national market was driven by activity in six states, which account for over 40 percent of the market: California, Florida, New York, Pennsylvania, Texas, and Washington.

Light Rail, Subways, and Railroads (Graph 43

Public transit and rail construction are expected to grow 5 percent from $23 billion in 2019 to $24.2 billion in 2020. 

  • Investment by private Class 1 freight railroads is expected to grow from $12.8 billion in 2019 to $13.2 billion in 2020. 
  • Subway and light rail investment are expected to reach record levels, increasing from $10.3 billion in 2019 to $11 billion in 2020. 
  • The recent federal appropriations bill and the 2015 FAST Act law provided a boost for public transportation investment. 
  • In addition to a dozen major subway and light rail projects underway, states awarding significant transit and rail contracts in the last year include: California, Illinois, Texas, Washington, Minnesota, Arizona, New York, Georgia and Massachusetts. 

Airport Runways and Terminals (Graph 49)

The value of airport construction, including terminals, runways and related work, is expected to increase 6 percent from $23.2 billion to $24.5 billion. 

  • After growing 34 percent in 2018, airport terminal and related work, including structures like parking garages, hangars, air freight terminals and traffic towers, is expected to increase from $18.5 billion in 2019 to $19.6 billion. 
  • Runway work is forecasted to increase from $4.7 billion in 2019 to $4.9 billion in 2020. 
  • Some major states with increases in expected runway construction market activity include: California, Colorado, Florida, Georgia, Hawaii, New York, and Texas. 
  • There are currently 15 major airport expansion projects over $1 billion underway or about to begin in California, Colorado, Florida, Georgia, Illinois, New York, Pennsylvania, Tennessee, Utah, and Virginia. 

Ports and Waterways

The value of port and waterway investment is expected to grow to $3.4 billion in 2020. Construction activity in 2019 was $3.3 billion, up from $2.5 billion in 2018. 

  • States with increased investments in recent years include: California, Florida, Illinois, Massachusetts, New Jersey, New York, South Carolina, Tennessee, Texas, Virginia, and Washington.
  • Congress passed, and President Trump signed, the Water Resources Development Act of 2018 in October of 2018, authorizing over $9 billion in U.S. Army Corps of Engineers projects, with actual funding for the ventures pending the annual appropriations process. The U.S. Army Corps of Engineers (USACE) plans to spend $1.3 billion on inland waterway construction projects in FY 2020. This work is taking place in California, Florida, Georgia, Illinois, Idaho, Iowa, Kansas, Kentucky, Maryland, Minnesota, Michigan, Missouri, Massachusetts, Montana, Nebraska, New Jersey, North Dakota, Oregon, Pennsylvania, South Carolina, South Dakota, Texas, Washington, Wisconsin, and West Virginia. 
  • Following $17.4 billion in supplemental disaster recovery funds in FY 2018, Congress provided $3.3 billion as part of the 2019 Additional Supplemental Appropriations for Disaster Relief Act, of which $2.5 billion was for short-term repairs. This includes $1 billion for 103 local flood risk management projects in eight states, $908 million for emergency dredging and other priority operation and maintenance projects across 31 states and Puerto Rico, and $575 million for projects on the Mississippi River and tributaries. 

ARTBA’s forecast is based on a series of proprietary econometric models for each mode and analysis of federal, state and local data and market intelligence. The full forecast can be purchased at www.artbastore.org.

This feature appeared in the January 2020 issues of the ACP Magazines:

California Builder & Engineer, Construction, Construction Digest, Construction News, Constructioneer, Dixie Contractor, Michigan Contractor & Builder, Midwest Contractor, New England Construction, Pacific Builder & Engineer, Rocky Mountain Construction, Texas Contractor, Western Builder

60-Minute Webinar for Transportation Construction Professionals, Public Officials & Analysts

American Road & Transportation Builders Association (ARTBA) Chief Economist Dr. Alison Premo Black will detail the association’s five-year transportation construction market outlook in her annual forecast, 3 p.m. Eastern, Dec. 4.

Topics to be covered as part of the webinar include:

  • National market forecast and which states are driving the activity;
  • Highway, bridge, airport runway, transit, freight, rail, and ports/waterway forecasts; and
  • The impacts of hundreds of recently approved state and local transportation funding initiatives.

ARTBA Senior Vice President of Congressional Relations Dean Franks will also provide an update on efforts to permanently fix the Highway Trust Fund, pass a long-term infrastructure plan and the reauthorization of the FAST Act.

The webinar is for transportation design and construction professionals, public agency officials, analysts and investors.

The registration fee is $350 for the private sector and $175 for public agency officials.  Paid participants will receive a copy of the complete U.S. Transportation Construction Market Forecast report (a $200 value); a PowerPoint presentation and “Q & A” session; and access to an online, interactive summary of the forecast results.

Register here.

Established in 1902, ARTBA represents the U.S. transportation construction industry before Congress, the White House, federal agencies, courts, news media and the general public.

ARTBA Reports: Voters Approve Nearly 90 Percent of Transportation Investment Ballot Measures

Voters in 19 states Nov. 5 sent a decisive message of support for transportation investment, approving almost 90 percent of 305 state and local transportation ballot measures.
 
In total, the 270 approved initiatives are expected to generate over $9.6 billion in one-time and recurring revenue, according to the analysis conducted by the American Road & Transportation Builders Association’s Transportation Investment Advocacy Center™ (ARTBA-TIAC). Two measures in Texas are still pending.
 
“The ballot results are a great reminder infrastructure investment remains one of the few areas where red states, blue states, Republicans and Democrats can all come together,” ARTBA President Dave Bauer said.  “It should also demonstrate to lawmakers on Capitol Hill that the public will be on board for the passage of a long-term bill that significantly boosts highway and transit investment at the federal level.”
 
A complete report and an all-new interactive dashboard that filters results by state, mode, year and type of initiative are available at the Center’s flagship website: www.transportationinvestment.org.
 
The preliminary results reaffirm a decade-long trend of voters strongly supporting investments to maintain and improve their state or local transportation networks. Voters have approved 81 percent of nearly 2,000 transportation investment ballot measures tracked by ARTBA-TIAC since 2010, including this year’s results.
 
“Public support for increasing infrastructure investment continues to help local governments and the transportation construction community improve safety, mobility and overall quality of life for residents as projects get underway,” said Carolyn Kramer, ARTBA-TIAC director. 
 
Voters in Maine overwhelmingly approved, by a 76 percent to 24 percent margin, a $105 million bond measure to support transportation infrastructure projects. The vote was Maine’s seventh successful transportation bond in eight years.
 
While transportation investment fared well nationwide, Washington state voters endorsed by a 56 percent to 44 percent margin a measure that reduces or repeals certain motor vehicle taxes and fees and removes the authority to impose certain new fees without their approval. This decision will cost the state nearly $4.3 billion in state and local transportation revenue over the next six years. 
 
Voters in Colorado rejected by a 55 percent to 45 percent vote a measure that would have permitted the state to retain excess tax collections in order to fund education and transportation.
 
The 305 measures tracked by ARTBA-TIAC is the largest number ever for an odd-numbered, off-year election. Although historically most transportation measures are put on the ballot in even-numbered years when congressional or presidential elections drive higher turnout, an increasing number of measures are being considered by voters during odd-numbered years and primary elections.
 
There were 57 measures in 12 states that would raise over $20 million each, compared to 21 measures in 2017.  Of that total, 89 percent were approved.  Of 25 measures that would raise over $100 million, voters approved 92 percent.  This included a bond measure in Harris County, Texas to support transit expansions in Houston under the “Moving Forward Plan.”    
 
Of the local ballot measures, most (302 of 305) were property tax increases, primarily in Ohio (154) and Michigan (15), where many municipalities consistently ask voters to renew such assessments to pay for local roads and infrastructure repairs.
 
Additionally, local bond measures in Texas appeared on 25 ballots and received 96 percent approval, which will generate nearly $6 billion. Most of these measures established municipal utility districts.
 
The approved measures will support $7.7 billion in new transportation investment revenue and $1.9 billion in continued funding through tax extensions, renewals or protections. The timing of the market impact of these actions is difficult to project as revenue approved will last up to 25 years.
 
The Transportation Investment Advocacy Center ™ (TIAC) is a first-of-its kind, dynamic education program and Internet-based information resource designed to help private citizens, legislators, organizations and businesses successfully grow transportation investment at the state and local levels through the legislative and ballot initiative processes.

ARTBA Chairman Bob Alger Calls for Permanent Highway Trust Fund Revenue Solution at House Hearing

ARTBA Chairman Bob Alger Calls for Permanent Highway Trust Fund Revenue Solution at House Hearing

Association Also Voices Support for Transit Capital Investment Program

American Road & Transportation Builders Association (ARTBA) Chairman Bob Alger today called on Congress to increase investment in the transit Capital Investment Program (CIG) but said it is best achieved in the broader context of legislation that provides a permanent revenue solution for the federal Highway Trust Fund (HTF).

Alger, chairman of Connecticut-based Lane Construction Corporation, represented the association at a House Highways & Transit Subcommittee Hearing on “Oversight of the Federal Transit Administration’s Implementation of the Capital Investment Grant Program.”

While voicing support for the CIG program, Alger said, “Congress’s chronic failure to fix the Highway Trust Fund program threatens all federal surface transportation programs, including transit projects.”

The next Highway Trust Fund crisis looms shortly after the 2015 FAST Act surface transportation law expires in October 2020, Alger said. He noted Congress and previous administrations had initiated more than $140 billion dollars in General Fund transfers and budget gimmicks to prop up current federal highway and public transit investment levels.

While the CIG program is traditionally supported with general revenue dollars through the annual appropri­ations process, continued uncertainty or disruption to HTF program funding will adversely impact all federal surface transportation programs, including CIG. As an example, during the lead up to the FAST Act, such uncer­tainty about future federal investment and HTF solvency caused seven states in 2015 to delay roughly $1.6 billion in planned transportation projects, ARTBA said.

Alger highlighted three key options that Congress should consider to permanently fix the HTF: 1) raise the federal gasoline and diesel user fee rates; 2) apply a freight-based user fee to heavy trucks; and 3) institute a fee to ensure electric vehicle users also help pay for the system from which they benefit.

In a recent comprehensive 32-page report with legislative recommendations for reauthorization of the FAST Act, ARTBA called on Congress to boost investment in the CIG program beyond the current $2.3 billion annual levels.

Alger’s testimony also addressed the need for the Federal Transit Administration (FTA) to improve its regulatory and project delivery process so that projects can be completed on time and within budget. According to FTA’s Capital Cost Database, which compiles as-built costs for 54 federally funded transit projects, average costs for delivering these projects increases an average of five percent annually. As a result, a project that costs $100 million in 2019 would cost $163 million to build in 2029, or more than twice the rate of general inflation.

Another key factor that can keep transportation construction projects on schedule is the use of dispute resolution boards. Such entities should include members recommended by the project owner, contractor or industry and should set up quick and efficient timelines so that members can carefully follow its progress, Alger said.

Read Alger’s full written testimony.

Established in 1902, ARTBA is the “consensus voice” of the U.S. transportation design and construction industry in the Nation’s Capital. For more information visit artba.org

Watters Campaigns for Sustainable Water Infrastructure Investment Act

Tim Watters, 2014 Chairman of the Associated Equipment Distributors (AED) and President of Hoffman Equipment, is working hard to educate people about the importance of infrastructure investment. Watters is doing everything he can to encourage elected officials to take action and address long term needs for infrastructure funding across the country.
One of these measures is the proposed Sustainable Water Infrastructure Investment Act.

The act would eliminate the volume cap on private activity bonds for water and sewage projects, which would be expected to increase private investments in the construction segment. It is anticipated that the passage of this act could generate as much as $6 billion in demand and could produce up to 1,000 jobs over the next 10 years.

“We are excited about this bi-partisan effort to address aging water infrastructure,” says Watters. “This bill will bring economic growth to the nation, create jobs in the construction industry and improve services around the country.”
The Sustainable Water Infrastructure Investment Act would bring small changes to the tax code in order to bring water infrastructure regulations in line with other infrastructure spending. An AED commissioned study shows that every dollar invested in water infrastructure generates $2.03 in tax savings over 20 years.

Another infrastructure crisis facing the country is the projected budget shortage of the Highway Trust Fund (HTF). The Congressional Budget Office originally projected the HTF would have ran out of money this summer, causing significant delays and work stoppages during the busy construction season. Congress recently passed a short-term package that would fund the HTF through next May, but a long-term solution is still needed.

At a recent press conference, organized by Senate Environment and Public Works Committee Chairman Barbara Boxer (D-California), Watters said the looming crisis threatens 4,000 jobs at construction equipment dealerships across the country and 700,000 jobs in the broader construction industry.

“Every morning hundreds of thousands of hard-working men and women in the construction industry get up, go to work and build America’s transportation infrastructure. If they didn’t do their jobs, this country would come to a grinding halt,” Watters said.

Watters says that Boxer is someone who is working to address the problem, but he encourages people across the country to get in touch with their representatives to demand action. Watters demanded of legislators, “Do what we sent you here to do. Legislate. Govern. Give us a highway bill. And give us the infrastructure the U.S. economy needs to function.”

Public Works Committee Chairman Barbara Boxer (D-California) and Tim Watters (to the right of Boxer) at a recent conference in Washington D.C.

Public Works Committee Chairman Barbara Boxer (D-California) and Tim Watters (to the right of Boxer) at a recent conference in Washington D.C.

Tim Watters, 2014 Chairman of AED and President of Hoffman Equipment, speaking at a press conference in Cliffside Park, New Jersey.

Tim Watters, 2014 Chairman of AED and
President of Hoffman Equipment, speaking at a press conference in Cliffside Park, New Jersey.