We’re losing it

Feb. 18, 2002

“Chaff-chinff”

That’s the sound of a muffled “cha-ching.” The Wall Street bear has locked his claw on the mouth of this industry’s earning power for months now, and I really don’t see anything or anyone scaring him back into the woods.

“Chaff-chinff”

That’s the sound of a muffled “cha-ching.” The Wall Street bear has locked his claw on the mouth of this industry’s earning power for months now, and I really don’t see anything or anyone scaring him back into the woods.

It’s hard to watch the highway and bridge building world limp through the day. Particularly the equipment manufacturers, who have been pushing the “help” call button the longest. Since the early part of last year, machine sales have made top executives wince as they read through quarterly reports. And it appears as though the pain is spreading.

In a report released last November, the National Council of State Legislatures found 44 states where revenues were less than predicted and 28 that have cut spending or are considering such a move. Fourteen unions have frozen hiring, set limits on employee travel expenses or canceled capital projects.

I talked to Mike Covington, director of government affairs for the South Carolina DOT, and he said the gas tax has stalled growth in the state. His solution was elementary: “The only way to gain more fuel tax money is to put more cars out on the road.”

The Transportation Equity Act for the 21st Century also is putting South Carolina in an awkward position. When the funding formula was improved for donor states, SCDOT received the biggest percentage increase of federal funding in the nation. But with that bonus came a 100% increase in the requirement for state matching dollars.

So where does that leave local funding? In the basement. South Carolina has set aside zero dollars for the resurfacing of secondary roads.

Now, I am certainly not an opponent of TEA-21. Funding at the federal level has done a great deal of good in this country. Interstate systems and bridges continue to improve their look, which not only saves a few minutes of  commute time but, more importantly, saves a lot of lives.

But what about routes on a smaller scale? I’m talking about the two-laners where a bad pothole could scatter steel everywhere. We need money for the big projects, but I can come up with a few more cash demands.

There’s also a rumor making rounds in Washington, D.C., regarding President George W. Bush’s FY 2003 budget proposal, which was released on Feb. 4. At press time, this proposal was supposed to show that gas tax and other revenues into the Highway Trust Fund will fall well short of what was projected in the administration’s FY 2002 budget. In fact, Congress was calling for a 30% cut—from a record $31.8 billion to $22.7 billion—in federal highway program spending. California alone will lose more than $741 million.

For the past three years federal funding levels set in TEA-21 have been increased by the infusion of funding from a provision known as Revenue Aligned Budget Authority (RABA), which has generated $8.9 billion.

A hint that Highway Trust Fund revenues were declining was included in the Office of Management and Budget’s FY 2001 Mid-Session Review, released in August. At that time, it was indicated there was a sharp downturn in receipts collected through June, and it was assumed there would be a drop of as much as $6 billion in obligations in FY 2003 when compared to FY 2002.

I realize this drop is a reflection of a miserable 2001 in terms of the economy, but if the forecasters are right, the slump could linger well into this year, which could result in another cut in the FY 2004 budget.

We are not heading into reauthorization with our arms triumphantly raised. Yes, funding levels have reached the clouds for almost a decade, but has it made up for all the years the industry was rained on?

The puddles are still there. In fact, our bridge system is still knee-high in maintenance repairs. What we need from Congress is an umbrella, something that will keep this industry from being neglected for so long.

So, I ask you, what are alternative sources of funding? If the gas tax is hurting we need a quick solution so we can eat this bear claw like a pastry.