Two months ago we ran a piece about the ever-shrinking Highway Trust Fund (HTF) and how it could affect you if it dries up. With the construction industry on the rise for the first time since 2008 (thanks in large part to programs like the HTF) such a loss in capital could send the industry back to the doldrums it has sat in for much of the past six years. But, thanks to your commitment (if you participated in www.HardhatsforHighways.org) and the effort of the Associated General Contractors of America the voices of contractors across the U.S. have been heard. According to the AGC of America the new Senate highway funding proposal provides the long-term funding solutions needed to maintain and improve the country’s outdated bridges and roadways.
While this does not guarantee that the new budget will pass, it should be of some comfort to contractors. Ron Wyden, the Senate Finance Committee Chairman, has been working tirelessly to build support for a six-month; $10 billion plan to re-invigorate the HTF, which he hopes will spark a long-term transportation bill. The bill represents a last ditch effort by politicians to keep the construction industry above water and one the Obama administration supports wholeheartedly. Without it, the industry could stand to lose approximately 700,000 jobs, which will inevitably mean minimal improvements to an infrastructure that is well past its’ prime.
Mr. Wyden has received widespread support for the plan but there are still some elements that need clarification, the greatest of which being the issue of funding the project. How will the United States government pay for it? Senators Bob Corker of Tennessee and Chris Murphy of Connecticut may have found a way to fund the multibillion-dollar list of improvements though it may be very unpopular. The two men have suggested that the government should raise the federal gas tax, which will inevitably lead to a greater revenue stream but it could also alienate voters. Such a move could help contractors but it could also create more problems than the government may have realized its worth. An increase in taxes would wreak havoc on families that require a vehicle to commute to work while it could also increase the price to operate large machinery that is dependent on gasoline thereby inhibiting the ability of the industry to grow.
The new HTF deal is still a few months away from being completely resolved, but the new bill could signify the starting grounds for a bi-partisan agreement over the Highway Trust Fund. With the story likely to continue we’ll be sure to keep you updated and in the know on everything from the HTF to the proposed gas tax. Happy building!