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OP-ED: Inaction will be costly for transportation infrastructure

OP-ED: Inaction will be costly for transportation infrastructure

SC2013_DJC_320x320This column originally appeared in The Daily Journal of Commerce in Buildings Bridges and Roads
By: Mike Salsgiver

Mike SalsgiverDuring the 2008–2014 recession, the construction industry in Oregon and southwest Washington lost over 40 percent of its workforce. Workers were laid off, moved to other jobs, relocated out of the area, or just left construction altogether. So it didn’t take much of a recovery to create a skilled workforce problem.

Highly skilled workers are needed and rewarded – when the work is there. As our industry begins bouncing back, we need all parts working at full capacity. Unfortunately, public investment in highways, bridges and roads has sunk to new lows. Both Congress and the Oregon Legislature have delayed action to put into place viable, long-term transportation funding packages, and the effects of their inaction are being felt.

Congress is the body that maintains the Highway Trust Fund (HTF). Despite passage of multiple policy-related bills, the U.S. has fallen behind other countries in infrastructure investments as Congress has struggled to find funding sources to supplement the federal gasoline tax, which has not increased since 1983. The federal gas tax no longer brings in enough revenue to fund the nation’s surface transportation needs. Over that same period of time, long-term funding issues have not been addressed; meanwhile, more than 30 short-term “fixes” have been passed, including the latest one due to expire on Nov. 20.

Part of the problem is that as auto technology has improved, gas tax revenues have declined. As the financial power of the federal gas tax has dwindled and as new transportation technologies evolve, discussions have taken place for over a decade to figure out how to raise Highway Trust Fund revenues from new sources. In the absence of a change in the manner in which the HTF is funded, the flow of money is not and will not be enough to maintain, operate and modernize the nation’s transportation system.

Congress is finally beginning to step up in the manner it should. Just a few weeks ago, it approved yet another short-term fix that expires this week. And a week ago, the House passed a new six-year program that will be conferenced with the Senate soon. The good news is that longer-term program predictability will finally happen; the bad news is that no clear consensus exists about how to pay for the programs.

The short-term fixes passed of late have failed to produce the predictability our contractors need to bid for work and actually build projects. Because of uncertainty about available federal money, state and local planning work was suspended, and the inaction of the 2015 Oregon Legislature has further compounded the problem.

Despite efforts by the AGC and the broader business community to advocate for a transportation funding package during the 2015 session, the Oregon Legislature failed to deliver. The Washington Legislature passed a $16 billion transportation package, but Oregon’s counterpart couldn’t find the votes to pass a package 45 times smaller. These in-state issues have halted the ability to get work into the pipeline, further added to the nearly $12 billion backlog in work, and even forced a number of contractors to close their doors or look outside Oregon for work.

Deferred maintenance on our nation’s transportation infrastructure is enormous. Oregon alone has 7,656 bridges and 74,493 miles of roadway. Per the American Society of Civil Engineers’ Infrastructure Report Card, these roads and bridges are rated a C-, which is slightly better than the nation’s overall infrastructure rating of a D+.

In our state alone, 23 percent of the bridges are either structurally deficient or functionally obsolete. With existing funding mechanisms, Oregon’s bridges will become structurally deficient at a rate of 25 per year by the year 2018. Of the state’s 59,262 public roads, 7,841 are major roads, and 6 percent are in poor condition. Without a comparable increase in funding, road conditions will continue to deteriorate even faster. Until a solution is found, Oregon motorists will incur costs of $654 million a year from driving on roads in need of repair, which is $236 per year per motorist.

Our nation’s roads, highways and bridges have billions of dollars in deferred maintenance needs as well as an increasing need to modernize. Through its recent actions, Congress knows it’s time to put together a fully funded, bipartisan plan to address those critical needs. Other methods of financing need to be explored – options like tolling and vehicle miles traveled (VMT) are being tested around the country and are proving effective. Ultimately, it’s up to Congress to move and set the national policy.

The need to invest in our nation’s transportation system is not a partisan issue. Investment in transportation infrastructure – in fact, any kind of public infrastructure – is a public duty. Finding resources to pay for transportation maintenance, modernization and operations is a fundamental obligation of government – arguably one of the most important obligations our government has. The longer we wait, the more our transportation system will deteriorate, the more expensive it will be to fix it, and the longer it will take the highway and heavy civil sectors of our industry to fully recover.

Highlighting the need for ongoing infrastructure investments will be a major focus of our efforts now through the start of the 2016 short session and beyond. Recent comments about pushing a transportation package to the 2017 session are extremely disappointing, particularly since every key elected official has said that transportation funding is a top priority. And yet, the Legislature will meet in February and no action will be taken. We can only hope that the industry and the state’s economy will be able to withstand the economic effects of this lack of statewide leadership.

At some point, there needs to be political will inside and outside government to face this problem and get major projects flowing again. The longer we wait, the more our transportation system will deteriorate and the more expensive it will be to fix – both federally and at the state level.

To view the column online, please click here (DJC subscription required).

Mike Salsgiver is the executive director of Associated General Contractors’ Oregon-Columbia chapter. Contact him at 503-685-8305 or mikes@agc-oregon.org.

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