Up
North. Proposed bridge would link Ketchikan to
sparsely populated Gravina Island in southeast Alaska.
image courtesy of Gravina-Access Project
At last. After nearly
two years of delays and weeks of grueling Capitol Hill negotiations,
a new, long-term transportation billthe largest public
works measure in U.S. historyis about to become law.
On Aug. 10, President Bush is expected to travel to House
Speaker Dennis Hasterts Illinois district to sign the
Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users, which guarantees $244 billion over
five years. Big as SAFETEA- LU is, its passage was greeted
more by sighs of relief than shouts of joy. Thats partly
battle fatigue after the long struggle to finish the bill.
But lawmakers and industry officials also say the funding
infusion, though huge, falls well short of national needs.
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SAFETEA-LUs name combines
the Senates SAFETEA and the Houses TEA-LU, which
takes the name of the wife of House Transportation and Infrastructure
Committee Chairman Don Young (R-Alaska). The bill spans fiscal
2005 through 2009. When 2004s funding is added, six-year
authorizations total $295 billion. Of that, $286.5 billion
is guaranteed obligations, including $228.7 billion for federal-aid
highways, $52.6
billion for transit and about $5 billion for highway safety.
Young
The $286.5 billion is a 38% jump
over the preceding six-year statute, the 1998 Transportation
Equity Act for the 21st Century. But its well below
the $375 billion Young proposed early in 2003, which he says
was based on U.S. Dept. of Transportation estimates of highway
and transit needs. Young says SAFETEA-LUs total "is
a good number. Its not good enough, but its a
good number."
He also notes that its an
increase over the $256 billion endorsed in early 2004 by the
White House, which pressed all along the way to hold down
the bills price tag. "I think the increase was
fine," says Ann Warner, Bechtel Infrastructure Corp.
vice president and manager of government programs. "I
dont really think we could have done much better in
this budget climate."
Transit officials are pleased with
their funding, a 13% increase over TEA-21. "This kind
of bill is right for the times," says Art Guzetti, American
Public Transportation Association director of policy and advocacy.
"Our goals were to grow the program, continue guaranteed
funding and expedite program delivery."
Some observers say theres
less true growth in SAFETEA-LU than meets the eye. Adjusted
for inflation, the bills average annual funding gains
are only 1.8%, says David Bauer, American Road & Transportation
Builders Association senior vice president for government
relations. He says TEA-21s annual real increases were
6.1%. Mike Pack, president of Frehner Construction Co., North
Las Vegas, says, "The bill is barely enough to keep pace
with inflation. Im sure its a bit different from
state to state, but our state needs more."
Still, the bill will mean more
construction work will start to move. That will be a welcome
change for state transportation departments, design firms
and contractors. Since TEA-21 expired Sept. 30, 2003, Congress
had to pass 12 stopgap measures to keep federal transportation
money moving to state and local agencies. The most recent,
approved July 29, runs through Aug. 14. These short extensions,
of varied lengths, amounted to funding on the installment
plan.
"Weve seen a lot of
things slowed down," with agencies splitting big potential
engineering contracts into task orders or multiple phases
during the stopgap period, says Tom Barron, executive vice
president in Parsons Washington, D.C., office. "Now,
we can look to a little bit of an acceleration."
Says Jim Riley, transportation
market sector leader for HNTB: "Some DOTs really were
stalled in their programs.... Now that [the bill is] passed,
bigger projects will begin moving forward."
Whens the new work coming?
After the bill is enacted, the pace of contracts will hinge
on budget conditions in each state. Robert Alger, president
and CEO of Lane Construction Corp., Meriden, Conn., says some
agencies had many projects on the shelf awaiting long-term
funding assurances. "The jobs are ready," Alger
says. "I think the next six to eight months is going
to be fairly busy."
State DOTs will push to obligate
all of their 2005 federal highway aid allotments by Oct.1,
when fiscal 2006 starts. If they dont use the 2005 money
by then, they lose it. But contractors shouldnt expect
a burst of new work right away.
For one thing, during the 22 months
of stopgap bills, many states tapped their own funds to keep
programs going, expecting to be reimbursed when a new bill
becomes law. Those repayments wont fund new construction.
Nevertheless, in the next couple
of months, "I think that theyll get quite a few
contracts let," one Washington source says. It will take
time to evaluate bids and make awards. But by next spring,
industry "could start to see the real uptick in the work,"
the source says.
For example, Riley says SAFETEA-LUs
funding stream can enable Ohio to finish preliminary engineering
and decide on the scope of its $600-million to $800-million
Cleveland Inner Beltway plan. Riley says officials faced a
dilemma with this sort of project: Should they spend $300
million to patch up a deteriorating, 50-year-old highway?
"But now [with the new bill] you can say, How much
will be spent to actually improve the facility."
Once the money gets to contractors,
it will give a boost to construction and its suppliers. Lobbyists
and pro-infrastructure lawmakers kept repeating that each
$1 billion in spending means 47,000 jobs. Over five years,
it also will translate into $17 billion in sales of off-road
construction equipment, estimates the Associated Equipment
Distributors, Oak Brook, Ill.
Transportation bills have been
late before, but why did this one take so long to complete?
"Forget about everything else. This is all about dollars
and cents," says Rep. Sherwood Boehlert (R-N.Y.).
White House lobbying to limit the
bills size made it rough for legislators to satisfy
the desires of donor states such as Texas and California,
whose fuel tax payments into the Highway Trust Fund exceed
the federal highway aid they receive. Initially, donors wanted
to boost their minimum return to 95%, from 90.5% under TEA-21.
When administration officials threatened
a veto above $284 billion, donors, led in conference by House
Majority Leader Tom DeLay (R-Texas), sought 92% in the bills
initial years. But that was impossible without inflaming donee
states, such as New York and Pennsylvania, which get more
than a 100% return on fuel-tax...
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