It's about as far from a done deal as November's election, but President Obama's $3.8-trillion budget for fiscal 2013 sheds light on where his priorities lie as U.S. construction continues to contend with a slowly growing economy and Obama accelerates his bid for re-election.
It's all about infrastructure. And jobs. The budget would double spending on highway, bridge and mass transit projects by allocating $476 billion toward a six-year surface transportation program while implementing cuts to many other construction programs. In addition to gasoline tax revenue, funding would derive from a $38.5 billion-per-year transfer from funds allocated to support U.S. wars. However, critics contend that because wars in Afghanistan and Iraq were largely funded by borrowing, bringing either to a conclusion wouldn't – or shouldn't – translate into $231 billion in ready cash.
By comparison, a two-year, $109-billion surface-transportation measure is under consideration in the Senate and a six-year, $260-million measure is under consideration in the House. Unlike the Obama budget, neither measure calls for high-speed rail.
So the chasm is considerable.
Infrastructure improvement has become a familiar refrain with the Obama administration, but in Ohio, as in other regions of the Midwest, builders have yet to see words translate into significant action. In January, Ohio officials declared that state transportation was in a state of crisis. As such, proposals to privatize the Ohio Turnpike or implement more bridge and highway tolls also have become familiar refrains.
Missouri encountered similar problems last year and, as a result, streamlined the Missouri Department of Transportation (MoDOT) by closing 131 facilities, eliminating 1,200 jobs and selling more than 740 pieces of equipment, the intent being to save $512 million by 2015 in order to fund vital road and bridge projects. Highway construction, which averaged $1.2 billion annually since 2006, declined to $600 million. Today, MoDOT indicated it was seeking suggestions from its industry partners to make its operations faster, safer and less expensive.
“We are looking for innovative ideas that make us a better organization, particularly within our maintenance operations,”says Mike Shea, MoDOT Maintenance Liaison Engineer. "We're interested in innovations related to pavement maintenance, bridge maintenance, highway work zones and injury reduction."
Thus far, Illinois has managed to keep its infrastructure programs intact, despite – or perhaps because of – its status of one of the nation's most economically challenged states. In August, state lawmakers passed legislation that, on average, raised state tolls by 88 percent in order to finance a $12-billion toll road expansion and renovation plan and, not incidentally, create 120,000 jobs. Unions strongly supported the measure, which took effect in January. At one public hearing last summer, Tony Martoccia, a member of Local 150 of the heavy equipment operators union, indicated he hadn't worked in two years and was using his son's college fund in order to avoid foreclosure.
Illinois continues to dig its way out of debt with employment programs that rely heavily on construction. In addition to the toll initiative, it has undertaken a $31-billion, multi-year infrastructure improvement program.
Yet, even Illinois projects are in jeopardy. By eliminating the use of motor fuel tax money for mass transit, the House transportation bill would cost Chicago $450 million per year in bus and train projects, potentially derailing plans to rehabilitate rail stations on Chicago's Red Line, part of a $1-billion, three-year initiative to modernize one of the busiest rail routes in the country.
Earlier this week, Obama threatened to veto the House bill in its current form, and today House Speaker John Boehner delayed a vote on the measure, indicating to members of the Republican caucus that it was “more important that we do it right than do it fast.” By the same token, it's unlikely the Obama budget will survive in its current form, if for no other reason than it relies upon raising taxes on the very rich.
So yes, a chasm.