Short-term extension could be troublesome for states

News AASHTO September 15, 2003
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State transportation officials estimate that a short-term extension of federal highway and transit programs, rather than enactm

State transportation officials estimate that a short-term extension of federal highway and transit programs, rather than enactment of a six-year bill, would mean $2.1 billion in project delays and the loss of more than 90,000 jobs.


The American Association of State Highway & Transportation Officials (AASHTO) surveyed 50 states, the District of Columbia and Puerto Rico in August to determine what impacts would result from a short-term extension, rather than a full-term six-year reauthorization.


States reported that a short-term extension would:


* Compound state budget problems and result in $2.1 billion in delayed projects, added project costs and 90,000 lost jobs;


* Reduce work for consulting engineers as the project pipeline contracts. Design, planning and environmental consulting firms will face cutbacks;


* Eliminate jobs for construction contractors and workers. As the project pipeline shrinks, contractors will be forced to scale back their operations, including the number of construction workers hired;


* Create a fall off in construction equipment sales and leases. Facing the uncertainty of a short-term extension, contractors will be less willing to purchase new equipment or enter into equipment leasing agreements;


* Shelve long-term, multi-year projects. The interruption in guaranteed long-term cash flow in federal assistance could adversely affect the many states that utilize innovative financing techniques; and


* Delay transit projects and force service cuts.


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