The Herald, Sharon, Pa.

February 15, 2013

State spending seen as salvation

Industry backs Corbett plan to lift gas tax cap

By John Finnerty
CNHI Harrisburg Correspondent

---- — Pennsylvania is at a fork in the road on transportation funding.

One way leads to at least a $1.8 billion boost in spending that would create thousands of jobs.

The other path leads to a cliff, said Rick Kelly, a spokesman for the Associated Pennsylvania Constructors, a trade group representing the road and highway construction industry.

The anticipated 25 percent cut in transportation spending that the state would experience without raising the cap on the oil company franchise tax would cost 4,000 construction jobs and another 5,000 jobs connected to construction in one way or another, according to an analysis released this week by American Road and Transportation Builders Association Transportation Development Foundation.

For companies like New Enterprise Stone and Lime, one of the largest road building construction companies in Pennsylvania, the discussion comes after five increasingly lean years.

“In a solid year, we would have 45-50 projects,” employing 600-700 workers, said Steve Tomlinson, vice president of corporate safety at New Enterprise, based near Altoona.  “Last year, I think we were doing half of that, and I don’t think we’re unusual. I think the construction industry in general is running about 50 percent capacity.”

Stimulus money is now exhausted and without the boost of the spending plan, contractors would be hit by a full-scale crisis, Kelly said.

Business associated with the gas industry has mitigated some of the reduced spending on highway and bridge construction, but it has not been enough to make for the reduction in work as government spending has declined.

The construction industry has been one of the slowest growing segments of business. While the number of private sector jobs increased 2 percent since 2009, the construction industry only grew less than one-tenth of a percent, according to Labor Department estimates.

An earlier study by the transportation development foundation estimated that in 2010 there were:

• 441 jobs associated with highway construction in Mercer County

• 765 jobs associated with highway construction in Lawrence County

• 345 jobs associated with highway construction in Crawford County

That study estimated that if the state poured $2.5 billion a year into transportation it would create 50,000 jobs. Most of those jobs would be in construction, but the study’s authors also projected that the spending would create 5,000 manufacturing and almost 5,000 retail jobs.

Corbett’s transportation plan falls short of the $2.5 billion – phasing in a move to lift the cap on a wholesale gas tax that would eventually generate $1.8 billion a year. Lawmakers are working on legislation that would close the gap between the governor’s plan and the $2.5 billion recommended by the state’s transportation funding advisory commission.

In addition to calling for the state to uncap the oil company franchise tax, that funding commission had suggested the state increase the cost of fees for drivers’ licenses and vehicle registration.

“The more they put in the pot, the better it will be for everyone,” said Tomlinson.

The lack of money for highway construction is not just bad for employment numbers, it’s bad for everyone, he said.

“We’ve had some lean years,” Tomlinson said. But the state of the roads and bridges can be bad for all the vehicles that travel on them.

“Construction is supposed to be cyclical and we hope it’s time for things to start going back up. We’d like to get back out and help making the community better,” Tomlinson said.