“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.
