(as seen in Talk of the Rockies on www.colorado.construction.com)
The nation’s highway industry won a small victory last week when the U.S. House of Representatives approved by a vote of 387-37 a measure that could infuse $8 billion into the Highway Trust Fund.
The measure would transfer money into the HTF from the general treasury and delay an anticipated revenue shortfall in the fund that could reduce federal highway aid for state infrastructure projects by approximately 34%, endangering construction jobs nationwide.
“This is a critical piece of legislation for every state in the nation,” says Tony Milo, executive director of the Colorado Contractors Association, which represents the interests of the state’s heavy/highway contractors. “It will, at the very least, help Colorado, because our transportation system is currently on life support.”
In response to a decline in traditional transportation funding sources, the Colorado Department of Transportation cut its general budget by $300 million for FY09; and if tax revenues continue to decline, the transportation department plans to cut an additional $200 million in 2011.
If the U.S. Senate approves the measure, monies transferred into the Highway Trust Fund could bring approximately $80 million to CDOT’s FY09 budget.
“The ‘fix’ will help us tremendously,” said CDOT CFO Heather Copp. “CDOT made significant cuts across the board, mostly in programs that consisted of design and construction projects—Colorado’s construction industry needs this.”
So far the measure is stalled in the Senate.
The transportation department’s cuts included a 50% decrease in its budget for the surface treatment program, planned at $80 million for FY09 and down from $163 million in 2008. Although it’s not known how the state’s Transportation Commission will distribute possible funds from the HTF fix, the approximately $80 million coming to Colorado will most likely go toward patching and repairing the state’s targeted deteriorating highways.
“Colorado is being impacted by two issues that are converging as part of a growing crisis: skyrocketing fuel prices resulting in higher transportation construction costs and declining funding for roadway improvements, resulting in deteriorating roadways and bridges,” said Tom Peterson, executive director of the Colorado Asphalt Paving Association.
The national HTF, created in 1956, relies on revenues from the federal gasoline tax of 18.4 cents per gal. (24.3 cents for diesel) – which has not increased since 1993, despite inflation and rapidly rising construction costs.
Much of the CDOT’s revenue comes from state and federal gas taxes, which have remained flat. Rising prices at the pump are encouraging people to drive less, leaving the state with declining gas tax revenues.
It is currently estimated that the HTF will run a shortfall of more than $3 billion next year unless it gets help from Congress. And, because highway money is paid out over a number of years, a shortfall in the $3 billion to $4 billion range would result in only about $27 billion available to state and local governments for new infrastructure projects in 2009.
The current highway act calls for federal aid of $41 billion for fiscal year 2009.
Mary Peters, secretary of transportation, said vehicle miles traveled on the nation’s roads fell by 3.7% in May from May 2007, making it the seventh consecutive month of year-to-year declines and further cutting proceeds from federal fuel taxes.
During the 2008 legislative session, many industry officials said that Colorado’s legislature failed to address the state’s crumbling road and bridge network—a network with 122 bridges declared structurally deficient, 40% of roads listed in poor condition and 20% of roads reaching the end of their surface life.
“Currently, CDOT is having trouble maintaining current conditions of Colorado’s roads,” said Copp. “[It’s] a problem that has further been exasperated by budget cuts. If the fix isn’t passed, it is very possible that the current condition of highways and bridges will worsen.”
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