The Road Ahead

What amount of money will be spent on road construction and maintenance programs in the next few years?

The answer is anyone’s guess, but it is an answer of interest to C&D recyclers, especially those who recycle concrete and asphalt and see a large part of their products go into roadwork.

A bellwether and leading factor in roadwork spending is what the federal government will authorize for transportation funding. Next year promises to be an important year for federal spending patterns because the Transportation Equity Act for the 21st Century, commonly called TEA-21, is up for reauthorization in 2003. This major piece of legislation, which will cover at least six years, should affect demand for recycled products going into the roadbuilding and road maintenance sectors.

But we are getting ahead of ourselves, as the funding appropriation for 2003 is not even decided yet. Currently, the federal government still has no official budget overall, but probably will by the time you read this. The appropriations bill for transportation may or may not be approved.

According to Matt Jeanneret of the American Road & Transportation Builders Association, Washington, the U.S. Senate has passed a 2003 transportation appropriations bill for $31.8 billion, the same level as in 2002. The House, however, has passed one for $27.7 billion, $4 billion less the 2002 spending level. "This is a discrepancy that has to be solved," he says. "It is unclear, but doubtful, that it will be done before the election. There are other things more pressing, such as Iraq and terrorism."

Peter Loughlin of the Associated General Contractors (AGC), Alexandria, Va., agrees with that assessment, adding that the impasse could easily go into 2003. When that happens, usually the funding stays at the previous year’s level, which in this case is $31.8 billion.

But the Office of Management and Budget has interpreted the rules to mean that it could use the lower number approved by the House, which is supporting tighter budget constraints than the Senate.

Loughlin doubts the House's lower figure will prevail, however, believing a way will be found to keep the higher number. That is important, says Jeanneret, "because what is at stake are 192,000 American jobs and highway safety, as deteriorating roads are unsafe." Most paramount, he adds, "Whatever number that is settled on will be the baseline number Congress uses in setting the reauthorization bill for TEA-21."

AGC’s Loughlin says the advantage of having the spending at $31.8 billion going into the reauthorization year is that it will be easier to get to the higher expenditures studies have shown are really needed to maintain highways.

For example, two highway needs reports—the American Association of State Highway Transportation Officials Bottom Line Report and the Federal Highway Administration Conditions and Performance Report—show a need for all levels of government to fund the highway program at between $79 billion to $92 billion annually. "The federal share of that is roughly 45 percent, which with inflation would require approximately a $50 billion program. And this would simply maintain the conditions and performance of our highways, to make improvements would be more," he says.

There are a host of issues to face before highway spending can be increased, including increasing states’ share of funding, spending down the fund instead of keeping reserves for deficit reduction, and fairness in the ethanol gas tax.

But the biggest hurdle to clear, and the one that will allow for more spending, is to raise the gas tax. Loughlin asks rhetorically, "Do you think you can get a gas tax increase through a Republican House, what will be a Republican Senate, and past a Republican White House? It is very doubtful."

It can happen, though, both knowledgeable inside-the-Beltway participants agree. For one thing, no one, neither tax-abhorrent Republicans nor program-oriented Democrats, doubts the needs for roads and infrastructure spending.