Direct Federal Spending High on Industry’s Infrastructure List

Industry officials, lawmakers also agree on need for Highway Trust Fund fix.

October 14, 2017
Tom Ichniowski

As the construction and transportation industries continue to wait for more specifics from the White House about President Trump’s still-unreleased infrastructure investment plan, some top officials are making clear that they want direct federal funds to be a keystone of the proposal, though acknowledging that public-private partnerships can be helpful in some cases.

Lawmakers and witnesses at a House highways and transit subcommittee hearing on Oct. 11 also said they want the plan to include a remedy for the Highway Trust Fund, which will face another shortfall in 2020 unless it gets a revenue infusion.

Rep. Bill Shuster (R-Pa.), chairman of the full Transportation and Infrastructure Committee, said the panel has been working closely with administration officials on “principles” for the infrastructure plan “And we hope to see that soon coming out of the White House,” Shuster added..

The wait for the plan has been long. There has been little action in the House, too, said Rep. Peter DeFazio (Ore.), the transportation committee’s top Democrat.

He noted that it has been more than nine months since the committee held its first 2017 infrastructure hearing, on Feb. 1 and House lawmakers have only rolled out a few legislative proposals.

DeFazio said that “all we’re doing around here is just talking, while the country crumbles.” He added, “I mean, seriously, let’s get to work.”

DeFazio also called for a strong federal role. He observed that more than 20 states in recent years “have stepped up” by raising revenue, mainly through increases in their own gasoline taxes. But DeFazio said those additional dollars are not enough. “They need a federal partner,” he said.

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GUEST COMMENTARY: Saving Midwest infrastructure from climate change

Mary Craighead
Oct 13, 2017

The increasing frequency and intensity of natural disasters that have recently come to Texas, Florida, the Gulf Coast, California, Puerto Rico and the U.S. Virgin Islands are a harsh reminder our climate is changing.

But these changes are not limited to far-off coastal communities and tropical islands.

In the Midwest, average temperatures are 4.5 degrees higher than they were in the 1980s. Annual “heavy precipitation days” are up 27 percent since the 1950s.

Great Lakes ice coverage is down, and electricity outages and demand for cooling systems are up. Projections expect temperatures to rise and heavy precipitation seasons to get even more severe for the balance of this century.

Each of these changes carries a very real risk – both in terms of direct infrastructure costs and impact on our $2.6 trillion regional economy.

Higher temperatures reduce the lifespan of roads and bridges, can cause railways to buckle and affect aircraft performance. As we’ve seen just in the past few weeks, flooding and more extreme storms can have damaging impacts far beyond the destruction of individual homes and businesses – disrupting freight and commuter routes and threatening above-ground energy transmission capabilities. This latter point is a special risk for the economy of the Midwest, which features mostly above ground transmission lines.

During this especially intense storm season, lawmakers in Washington and state capitals across our region have been discussing ways to maintain, expand or modernize the infrastructure systems at the heart of our economy. Ultimately, their proposals will entail a significant expenditure of public dollars.

But just as taxpayers wouldn’t want us using outdated technology for today’s infrastructure, we shouldn’t be creating facilities according to outdated heat and rainfall trends. To ensure taxpayers get the best bang for the buck, we need policy makers and project planners to incorporate today’s climate realities.

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Blackstone’s Infrastructure Business Adopts Responsible Contractor Policy to Promote Fair Wages and Benefits for Workers on Infrastructure Projects

Press Releases
SEP 05, 2017

New York, September 5, 2017 – Blackstone (NYSE:BX) today announced that its dedicated infrastructure business has adopted a Responsible Contractor Policy that includes an agreement to cooperate with the North America’s Building Trades Unions (“NABTU”) to include “responsible contractors” in the bidding and selection process for its investments. Through this policy, Blackstone will promote fair benefits, wages, working conditions, and training opportunities for construction workers on projects for Blackstone’s dedicated infrastructure business.

In May, Blackstone announced the launch of its dedicated infrastructure investment vehicle with an anchor $20 billion commitment by the Public Investment Fund of Saudi Arabia. Blackstone anticipates that, over time, the program will have $40 billion in total equity commitments in a permanent capital vehicle, including $20 billion to be raised from other investors. Overall, through the equity in this vehicle and additional debt financing, Blackstone expects to invest in more than $100 billion of infrastructure projects, principally in the United States.

Sean Klimczak, Senior Managing Director and Global Head of Blackstone’s Infrastructure business, said: “Rebuilding our country’s aging infrastructure will create badly needed jobs with good wages and benefits for construction workers throughout the United States. At Blackstone, we have a strong track record of responsible engagement with workers, their labor union representatives, and the communities in which we invest. We are proud to partner with the NABTU in this effort because we believe a fairly compensated and well-trained workforce is critical to producing high-quality infrastructure projects that help drive local economic growth.”

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Education and Infrastructure Grow the Economy. Other Proposals Being Debated in Illinois Don’t. (IL)

With the State of Illinois finally having a new budget for the first time in two years, the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign and the Illinois Economic Policy Institute evaluated the economic research on policy measures currently under consideration by state lawmakers.


JULY 19, 2017

Economic and social science research generally finds that investing in K-12 education and postsecondary education- “human capital development”- and investing in infrastructure- “physical capital development”- are the most effective public policies at improving economic growth. Fiscal sustainability through balanced budgets also allows governments to fund these investments and boosts business confidence.

Investing in public education improves the economy.

  • A well-educated workforce raises median wages in a state.
  • An extra year of education increases a worker’s earnings by 7-10%.
  • A 10% increase in spending on public education leads children to complete more schooling and reduces their chances of living in poverty once they hit adulthood by 3.7% on average.
  • In a survey of economics professors and public policy academics from accredited universities in Illinois, 66% say that expanding enrollment in early childhood education programs would improve the state’s employment rate and grow the economy and a majority say the same about raising the share of the workforce with a bachelor’s degree.

Investing in public infrastructure boosts economic growth.

  • For every dollar increase in infrastructure spending, the economy improves by $1.57 on average.
  • 67% of academic studies find that highway spending has positive impacts on the economy.
    Improving an expanding highways, bridges, and public transportation statistically increases the working-age employment rate by increasing connectivity and improving productivity.
  • In a survey of economics professors and public policy academics from accredited universities in Illinois, 79% think Illinois should increase transportation infrastructure investment.

Other policy changes that have been proposed in Illinois have no, mixed, or limited economic impacts.

1. Peer-reviewed studies demonstrate that “right-to-work” laws have no statistical effect on overall employment in a state economy, but research does find that “right-to-work” tends to reduce wages, limit unionization, and redistribute income from workers to owners.

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Trump Cuts Leave Bridge and Rail Projects Hanging

APRIL 5, 2017

When President Trump pledged during the campaign to spend $1 trillion to restore America’s crumbling bridges and roads, supporters across the country cheered.

A leaked list of the Trump administration’s priority projects seemed to speak to the scope of the president’s ambitions: a high-speed rail line linking Houston and Dallas; a desalination plant in Orange County, Calif.; and improvements to the Lake Pontchartrain Causeway in Louisiana, the longest continuous bridge over water in the world.

Then came Mr. Trump’s budget proposal, which would slash the Department of Transportation’s spending by 13 percent, end subsidies for Amtrak’s long-distance trains and eliminate the Obama administration’s “Tiger” grant program, which has helped fund mass transit systems across the country.

Among the potential victims of the president’s proposed cutbacks: Maryland’s long-awaited Purple Line, a planned 16-mile light rail system through the capital’s suburbs.

Maryland had been just four days away from clinching some $900 million in federal aid in August when a federal judge ruled to temporarily invalidate environmental approvals for the project. But under President Trump’s plan, projects that don’t yet have complete federal funding agreements would be financed “by the localities that use and benefit from these localized projects.”

Supporters of the project are devastated.

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Haverhill contractor settles allegations of overbilling MBTA, prevailing wage violations (MA)

Staff Reports
Feb 25, 2017

BOSTON – A New Hampshire-based general contractor with ties to Haverhill and one of its subcontractors have agreed to pay more than $420,000 for submitting false and inflated payment requests in connection with their construction of the Assembly Square Station on the Massachusetts Bay Transportation Authority’s (MBTA) Orange Line in Somerville, Attorney General Maura Healey announced Friday.

S&R Construction Enterprises, its president Stephen Early of Haverhill, subcontractor A&S Electrical and its manager Gregory Lane agreed to resolve allegations they violated the Massachusetts False Claims Act by knowingly submitting false and inflated pay estimates to improperly front load payments under their contracts. In addition, S&R Construction, based in Newton, New Hampshire, and A&S Electrical are barred from bidding on and accepting new public contracts in Massachusetts for five years and one year, respectively.

“Building new public transportation infrastructure is how we will move Massachusetts forward, and taxpayers deserve confidence in how we spend every dollar,” Healey said. “Overbilling and front-loading creates unacceptable risks of delays and degrades the integrity of our public contracting. Taking on this fraud is a top priority.”

“We are very pleased with this result, and thank the AG’s office for its excellent work in pursuing these claims,” said MassDOT/MBTA General Counsel John Englander.

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Michigan Road Funding: Democrats Eye Prevailing Wage Guarantee, Seek Education Compromise

Republican Gov. Rick Snyder, who is pushing for $1.2 billion a year in new funding for Michigan’s crumbling roads, will need Democratic support if he hopes to win legislative approval for his budget proposal or others.

“The plans that have been out there will require some bipartisanship,” Sen. Roger Kahn, R-Saginaw Township, said Wednesday. “There are not enough Republican votes or Democratic votes where any party can do it alone. That’s just the way it is.