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Federal Highway, Transit Funding Likely to Drop By More Than $15B

Fri December 04, 2009 - National Edition
Construction Equipment Guide

Federal investments in highways and transit systems are expected to decline by more than $15 billion in 2010 compared to this year according to analysis of transportation spending trends conducted by the Associated General Contractors of America. The estimated 19.3 percent drop in federal formula and stimulus funding for transportation projects next year is likely to force more than 430,000 layoffs throughout the economy, the association predicted.

“Boosting transportation investments will keep thousands of construction workers employed at a time when our economy can scarcely afford more layoffs,” said Stephen E. Sandherr, the association’s chief executive officer, noting that the construction unemployment rate is already at 18.7 percent. “The success of the stimulus in saving countless construction jobs will have been in vain if its sequel is underinvestment in our roads, bridges and transit systems.”

According to the association’s analysis, the federal government invested $78.6 billion in road and transit construction projects in 2009. That funding included $51 billion in regular federal transportation funding and $27.6 billion in stimulus funding. The stimulus funds represent 74 percent of the total amount of transportation funds included in the Recovery Act earlier this year.

Next year, however, federal funding for highway and transit construction will only total $63.4 billion, $9.8 billion of which will come from the remaining stimulus transportation funds, and the rest from regular transportation funding.

Non-stimulus federal transportation funds are stuck at near current levels because Congress has failed to pass a six-year surface transportation bill to replace legislation that expired at the end of September. That leaves transportation funding at levels well below what multiple, independent, bipartisan commissions estimate are needed to keep pace with the nation’s transportation infrastructure needs.

A study conducted for the association by George Mason University Professor Stephen Fuller found that every billion dollars invested in infrastructure projects creates or sustains an estimated 28,500 jobs throughout the economy. Based on that study, the $15.2 billion decline in highway and transit investments next year will result in more than 430,000 layoffs throughout the economy.

“Increasing transportation funding will save countless jobs and provide our economy with a foundation for long-term growth,” Sandherr said. He added that Doug Pitcock, the chairman and CEO of Houston, Texas-based Williams Construction and a past president of the association was sharing the same message about the need for increased infrastructure funding with the President during the jobs summit as AGC’s representative.

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