Highway Bill by the End of the Year; How to Fund the Bill Still in Question

Just got back from the big North American construction tradeshow, CONEXPO-CON/AGG, which is held in Las Vegas every three years. While the swelling of my feet has diminished, the excitement the show generated has not. The mood was overwhelmingly positive during the five days of the show last week. Despite continued uncertainty in U.S. construction markets and the overall economy, industry professionals expressed hopeful optimism for a sustained U.S. upturn in the coming months, while global sales continue to be strong, said the Association of Equipment Manufacturers (AEM), the primary organizer of the show. Predictions for highway reauthorization by the end of the year were also positive. During the show, I had the opportunity to sit in on press conferences with industry players such as Terex, Caterpillar and Volvo to name just a few. Like others in the industry, several senior-level executives predicted highway bill reauthorization by the end of 2011. "Our country is falling behind when it comes to infrastructure," says Stu Levenick, group president with Caterpillar. "But at least both sides of the aisle understand the need for improving our infrastructure. That's a big positive. We're keeping our fingers crossed to see reauthorization by the end of the year." The big question remains – where will the funding for the bill come from? "We'll have the same level of revenue as the last bill," says Ron DeFeo, Chairman and CEO of Terex. "Unfortunately, no one [in Washington] wants to support a gas tax increase, so we'll have to find additional sources of revenue." Other ideas for revenue sources include public/private partnerships and an infrastructure bank. "The U.S. is very creative when trying to find funds," says DeFeo. "The Obama administration and Congress may seek alternate taxes, in areas such as oil, drilling and Wall Street, but with the Republicans in charge, those ideas won't get any traction. The bottom line for the highway bill - we'll get the same level of revenue, and the burden will be on the states to prioritize projects."

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