[NEWS TRACKER VIDEO] Senate Passes $74.3B Federal Transportation Program

Despite a minibus bill with infrastructure grants, White House says private funding should be sourced for infrastructure projects; plus more construction industry news on the November 7, 2019, edition of Construction News Tracker.

Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.

Senate passes Federal transportation program

The U.S. Senate has voted 84 to 9 to pass a $74.3 billion federal transportation program through fiscal year 2020. It specifically calls for $1 billion in federal infrastructure grants while the Federal Motor Carrier Administration is to receive $679 million. It's part of a minibus bill that also included funds for commerce, agriculture and interior departments. All face reconciliation with House legislation of similar money by November 21.

Meanwhile, the White House is advising national interests seeking infrastructure funding not to come looking to it for federal money. White House Economic Advisor Larry Kudlow told the North American Leadership Forum that the government is focused on reducing red tape to kick start projects, but when it comes to money all would be better off with private funding.

The U.S. DOT has not commented on the statement, and infrastructure interests say that promoting private investment could have major changes in funding formulas. Forty prominent infrastructure stakeholders have written to powerful politicians enlisting support for a new highway bill to be considered this year. ARTBA, APTA and the U.S. Chamber of Commerce all support raising the federal gas tax to pay for improvements.

Apparently any further thoughts of a $2 trillion national infrastructure bill are no longer applicable.

Illinois gas tax is successful

Since 2013, 31 states have increased their gas taxes to keep abreast of the ever expanding cost to keep infrastructure intact using 54 different funding mechanisms to pay for them. Construction costs have increased 125% since 2003 and all without federal government assistance.

Illinois doubled its gas tax to 38 cents per gallon in July as part of a $45 billion infrastructure plan, and the result is that motorists paid nearly $100 million more than they did in July 2018. Other taxes were also raised as part of the six-year infrastructure rebuild effort for roads, bridges and buildings. Now the Illinois governor says the state intends to spend $23 billion on 4,200 miles of roadway and 9 million square feet of bridge deck all before 2023.

The Rebuild Illinois plan is designed to reserve 75% of its funds for reconstruction and road preservation.

Read next: States Find Gas Tax Increases Still Not Paying for Infrastructure Funding

Transportation construction put in place at record high

The government reports that transportation construction work put in place rose 12% this year to a record high of $45.6 billion. The Commerce Department also reports that construction spending rose 5/10ths of a percent in September for the third consecutive month. Private residential construction spending rose 6/10ths of a percent  all higher than analysts predicted.

The housing market remains solid as home and apartment construction advances. This also points to the improved employment levels of 3.2% unemployment in September. ABC Chief Economist Anirban Basu terms perfect the lowest September construction unemployment rate on record. Basu says that current economic expansion will persist for the foreseeable future.

Construction backlog hits 9 months

That statement is buoyed by the fact the ABC Construction Backlog Indicator is now up to 9 months. Weakening nonresidential construction spending hasn’t slowed demand rising since July. Contractors still are experiencing demand for their services despite being challenged by a continued lack of skilled workers to complete projects. The August numbers show infrastructure construction up by 10.4%, commerical and institutional up by 9%, while heavy industrial fell 11.6%.

Mega projects becoming more common

Construct Connect reports that the composition of construction starts is changing, and dramatically. Statistics show that 2/3rds of the way through 2019 the grand total of all constructions starts is off 3.3% from the same period in 2018 but much more heavily weighted to so-called mega projects of $1 billion or more. The market for medium projects has declined 15% while residential and nonresidential projects show a leveling off in volume. Much of this is attributed to a slower economic pace compared with earlier years.

North Carolina gets road construction funding

The North Carolina DOT has begun sending money back to local communities to fund roadway improvements $147.5 million is being returned under a state funding program that is used for the most part in resurfacing streets, but in this case is also being applied to bridges, walkways and drainage projects in 508 North Carolina communities. Funding is based on a state approved formula with 75% based on population and 25% on road miles.

Guitar-shaped Hard Rock Hotel complete

It's like no other hotel in the world and is drawing rave reviews. We're talking about the recently completed and now open Hard Rock Hotel at Hollywood, FL. Shaped like a guitar, the 600-room complex stands 450 feet high at its apex. At night it has beams of light that mimic guitar strings. The $1.5 billion complex has a venue for concerts, giant pool, retail shops and restaurants.

In closing, some people succeed because they are destined to but most men because they are determined to.

This is Construction News Tracker looking over the industry that makes the world a better place, presented by Caterpillar and produced by ForConstructionPros.com.

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