Transportation and Infrastructure

 ISSUE BRIEF: Transportation & Infrastructure Spending

Issue:

Our nation enjoys one of the world's most efficient transportation systems which provides for the movement of goods and services to market. However, that system is rapidly crumbling. Already our economy loses billions of dollars every year on wasted fuel, time, and accidents that are caused by poor road, highway and bridge conditions. A long term investment in our transportation infrastructure will pay dividends for decades to come, speeding travel, putting people to work, building our economy and saving lives. The most immediate issue facing reauthorization of a multiyear surface transportation bill is funding.

Background:

The United States has been under-investing in its infrastructure for too long. From 2002 to 2008, the economy grew at an average annual rate of 2.4 percent, while investment in highways, bridges, sewers and drinking water systems fell 1.6 percent per year. A multi-year reauthorization of funding for these programs would direct badly needed resources into rebuilding and upgrading our nation's aging infrastructure. It would also create the market certainty needed for state departments of transportation to plan and execute their infrastructure strategies and for companies to rehire laid-off workers, purchase and rent new equipment, while renewing the efficiency of our transportation infrasturcture. With equipment rental industry revenues down 25 percent since 2008 and construction sector unemployment near 20 percent, multiyear reauthorization of highway and infrastructure programs would be welcome news to this hard-hit sector of the U.S. economy.

Congress has failed to make highway reauthorization a priority. The most recent multiyear transportation law has expired and the highway program is operating under a temporary extension that expires on September 30, 2011. The uncertainty and delay only further shrink markets and cost jobs. A fully funded highway bill will put people back to work in good paying jobs, including our construction equipment rental member businesses. In fact, 6.4 cents of every dollar invested in highways is used to buy, rent and service equipment. Each dollar spent on equipment generates $3.19 in economic impact as equipment companies and their employees buy goods and services.

The nation’s rental businesses will benefit from additional transportation spending but they will also use the additional revenue they receive to purchase new equipment that will be needed to bring these projects to completion. Thus rental businesses are an integral link in the chain of economic activity that fuels growth and creates jobs.

Action Requested:

ARA supports swift passage of a fully funded, multi-year reauthorization of the federal surface transportation and infrastructure programs.