INDUSTRY NEWS

Paul Diederich, president of Industrial Builders Inc. of Fargo, N.D., and chairman of the Highway Division of the Associated General Contractors of America (AGC), has urged the House Transportation & Infrastructure Subcommittee on Highways and Bridges to address "a huge and growing infrastructure investment gap" facing the U.S.

Specifically, Diederich asked the federal government to at least retain (and ideally increase) highway spending levels and also to ensure that funds collected for highway improvement are actually spent in that manner.

The recommendations were given as Congress considers the reauthorization of the TEA-21 transportation bill when it expires in 2003. The spending levels are of interest to recyclers supplying products to the roadbuilding industry.

"TEA-21 has been a huge success," Diederich noted. "Despite the accomplishments of TEA-21, the nation still faces a huge and growing infrastructure investment gap. Much more needs to be done [and there is a] need for a much higher level of investment in federal-aid roads and bridges. Based on current estimates, an annual federal investment of at least $50 billion is needed just to maintain current road conditions and performance."

Current spending levels are $31 billion annually, while one proposal calls for a reduction to $27 billion in TEA-21 annual spending.

Additionally, Diederich urged the Committee to index several federal highway funding mechanisms to the Consumer Price Index, so that taxes collected on gasoline and tires will rise along with the general inflation rate.

"Fuel tax . . . rates should be adjusted to reflect the loss of buying power that has occurred since the last time Congress changed the amount going to the Highway Trust Fund—Oct. 1, 1997," said Diederich. "Between then and Oct. 1, 2003, the consumer price index will have increased by approximately 15 percent. A one-time adjustment should be made in fuel tax rates—from 18.3 cents per gallon for gasoline to 21 cents, and from 24.3 cents for diesel fuel to 28 cents. This change would raise approximately $5 billion per year for the Trust Fund."

He also recommended that the tire and heavy vehicle use taxes be similarly indexed.

President Bush has signed an executive order that could quicken the pace of some highway improvement projects.

The executive order on "Environmental Stewardship and Transportation Infrastructure Project Reviews" will change the permitting process, putting the U.S. and state transportation departments in charge of the process, rather than environmental protection agencies.

"This is a solid step towards meaningful statutory improvement that will address the long process of planning, designing, environmental review permitting and right-of-way acquisition to be completed before the first shovel of dirt is turned," says Stephen E. Sandherr, CEO of the Associated General Contractors of America (AGC), Alexandria, Va.

Transportation agencies now have the authority to establish deadlines, purpose and need for permits, possibly putting highway projects on a faster track.