Hold On…It’s going to be a bumpy ride!

For the past year I have been waiting to see how the Federal government will respond to the COVID crisis in regards to infrastructure spending. Actually everyone at all of the Department of Transportation’s, all Metropolitan Planning Organizations, and small cities across the country that receive Surface Transportation funding have been waiting for a new highway bill since the last one expired in October.

Well, it looks like our long wait is over as Congress wrangles the new infrastructure spending bill into being. By all accounts that I see it looks like the potential for a lot of new projects could be on our way.

Maybe…

This won’t be my first rodeo with big Federal stimulus spending. I was at TDOT in 2008 and 2009 when the last stimulus spending came down. It was really an “all hands on deck” affair to shovel as much funding out the doors on projects as we could figure out.

Here are some of my concerns that I seen about how things might play out this time around:

1. Federal gas tax revenue is down. Every month I get the emails from the TN County Highway Officials and gas tax revenues are down. Any new funding would have to replace funds that they have already lost. And, as we all know anything from the Federal government costs more to do, since there are always more strings involved.
   
2. Engineering firms that I see, including my own are already operating at full capacity. We could put several new people to work this afternoon. And so could our competitors. The problem is that there is a chronic shortage of experienced civil engineers to do the work. This has been an issue for a while and is nothing new.
   So the question is, who will be doing all of this new work, when we can’t even keep up with the jobs already on our plates?
   
3. Inflation. Everyone, including casual homeowners dropping by Home Depot to buy a single piece of plywood have been shocked to see the price increase on lumber and other building supplies. There are a lot of factors that play into this, but I can’t help but to think that having some of the construction production operations shut down for 6 months or more didn’t help matters.
   Lets think about this for a second: If roadway construction is already expensive, then you are going to have a ton more projects trying to get the same amount of labor and materials, what will happen? Inflation. I think we should prepare for some sticker shock in our future project bids.
   
4. Weird regulation as part of the new stimulus funds. Lets be brutally honest, the lawmakers in Congress don’t really know how things work on road and bridge projects. That is why it takes 2-3 times as much money to get a project completed with Federal funds as it would be if the Highway Supt. had a duffle bag of cash on his desk to spend on the same project.
   Last time is was looking for “shovel ready” projects, which took a little bit of time to actually define. God only knows what kind of restrictions and hoops that States, Cities and Counties will have to jump through this time.
   

Please don’t think that I am cynical about the Stimulus funding that will be dropping on our heads here soon. I am watching it very closely and look forward to helping our clients figure out what projects they can get completed with this funding. Working with Federal funding is my niche so my attitude is “it is, what it is, lets get something good built with it”.

I want to thank anyone who finds this information helpful. Exciting things are on the way!