Sheet Metal & Air Conditioning Contractors’ National Association

Issue Briefs

Infrastructure Investment

Construction Employers of America’s (CEA) Position: 
 
CEA advocates for increasing investment in the Nation’s infrastructure to levels necessary to ensure that our public buildings, water systems, airports, transit and surface transportation network meet the demands of the 21st Century.  We support President Trump’s and Congressional Democrats' call to significantly increase investments in rebuilding our infrastructure.   
 
Any infrastructure package should provide a combination of direct federal investment and opportunities to leverage additional public and private funds where appropriate.  We also support the enactment policies to allow state departments of transportation, local governments, public transportation providers, and airports to leverage public resources through enhanced innovative financing mechanisms to attract additional private investments for infrastructure projects.  Finally, we support efforts to improve the delivery of projects and permit streamlining for infrastructure projects. 
 
CEA Supports:  

  • Enactment of an infrastructure package increasing investment in all aspects of the nation’s infrastructure; 
  • Passage of FY 2020 appropriations investment levels consistant with the levels provided in FY 2019, which included both the authorized investment levels for infrastructure programs and additional amounts provided in the 2017 Budget Agreement;   
  • Passage of legislation to allow airports to increase Passenger Facilities Charges (PFCs);  
  • Identifying sustainable revenue necessary to support – at a minimum -- the current levels of investment authorized to be spent from the Highway Trust Fund; and  
  • Enact common sense improvements to the project approval and permitting process to provide greater efficiency in the delivery of critical infrastructure projects.   

The Issue: 
 
America’s transportation network is essential to the quality of life of communities and the productivity of the U.S. economy and its overall global economic competitiveness. Despite the importance of this network, it is well documented that the U.S. is significantly under investing in all aspects of its transportation infrastructure. Due to this lack of investment, the quality of the nation’s infrastructure has fallen from first place in the World Economic Forum’s 2005 economic competitiveness ranking to number 10 in its 2017 rankings. The American Society of Civil Engineer’s 2017 Report Card for America’s Infrastructure gave the condition and performance of the nation’s infrastructure an overall grade of D+, and an estimated $2.0 trillion 10-year investment gap to bring all aspects of the nation’s infrastructure up to acceptable condition. 
 
Transportation Research Board recently released a study examining the future of the Interstate Highway System that found a $149 billion investment backlog ($94 billion for rehabilitation of bridges and pavements and $55 billion for capacity expansions) on the current Interstate Highway System.  The report also found that addressing this backlog and maintaining current levels of congestion levels on the system would require an average annual investment level of $55 billion to $75 billion over the next twenty years.  Currently, approximately $20-25 billion in Federal and state resources are invested annually on Interstate facilities.   
 
While the need for increased investment is well documented, the source for federal capital investment in highways, highway bridges, and public transportation –– the Highway Trust Fund (HTF) –– and the revenues used to sustain the HTF -- the gas tax -- have failed to keep pace with the already insufficient investment levels. Since its creation in 1956, the HTF has been receiving userbased revenue from the federal tax and other excises taxes. Unfortunately, in recent years, the HTF has faced severe solvency issues, and over $132 billion in federal General Funds have been transferred into HTF to maintain the already inadequate funding levels. The constant threat of insolvency and the transfer of General Fund resources into the HTF have eroded the user-based revenue structure that has been a hallmark of these programs. 
 
While "Fixing America's Surface Transportations Act" (FAST Act) provides state and local government officials, as well as the private sector, a degree of certainty, the Congressional Budget Office projects that the HTF will once again run short of revenue to support the authorized investment levels prior to the expiration of the FAST Act.  Congress must identify a sustainable, long-term source of revenue to support investments in all forms of infrastructure.  
 
The nation is also underinvesting in the airport infrastructure necessary to maintain current airport facilities and modernize the nation’s aviation system. The Airports Council International-North America estimates that the nation’s airports need almost $100 billion for capital projects during the next five years. This is about one-half of the amount of capital funding currently available to airport owners through the Airport Improvement Program (AIP), Passenger Facility Charges (PFCs) revenue, and airport-generated revenues. The CEA urges Federal policy-makers to enact policy to increase airport infrastructure investments and allow local airport authorities to increase their PFCs.   
 
Major aspects of the U.S. energy system are at or beyond their 50-year design life, and much of the power grid in the U.S. operates at full capacity.  To provide greater energy efficiency and reliability, additional resources must be invested in aging equipment and capacity bottleneck.  While most of these facilities are privately owned, the Federal government should provide incentives to encourage greater investment in energy infrastructure, and to improve the permitting process for the construction of critical infrastructure projects.   
 
In addition to improving the nation’s overall economic competitiveness and quality of life, investment in infrastructure represents a significant job creation opportunity across the construction industry.  Every $1 billion invested in nonresidential construction would add $3.4 billion to gross domestic product (GDP), add $1.1 billion to personal earnings, and create or sustain 28,500 jobs.  
 
Despite the opportunity for job growth, there are concerns that the construction industry is facing potential labor shortages in coming years.  Given the critical importance of skilled labor to the success of the construction industry, the CEA contractors have invested heavily in workforce development and apprenticeship training.  CEA employers and our labor partners operate over 1,100 apprenticeship training centers nationally and make private investments of over $1.5 billion annually in workforce training and apprenticeship programs. One recent study noted that there were approximately 19 times more apprentices in union construction apprenticeship programs than in nonunion programs.  Federal infrastructure programs should recognize this commitment to workforce development by continuing and strengthening policies to incentivize private investment in the development of a skilled work force.  
 
Key Points: 
 
To address the nation’s transportation infrastructure investment gap, the CEA calls on Federal policymakers to: 

  • Increase direct Federal investment in surface transportation, water system, public building and aviation infrastructure to ensure the backlog of unmet capital investment needs are addressed and systems and facilities are upgraded to provide the U.S. with 21st Century infrastructure. 
  • Fully fund infrastructure investment previously authorized by Congress and signed into law.  
  • No longer use budget gimmicks or one-time infusions of non-user-based resources into the HTF and continue the user-financed system that has provided dedicated revenues to support investments in build and rebuilding the nation’s transportation network. 
  • Include policies to allow the primary owners of the nation’s infrastructure facilities to leverage limited public resources where appropriate through provisions that enhance  innovative financing mechanisms and attract additional private investment in all segments of the Nation’s infrastructure.  Any innovative financing tool must include labor protections.
  • The project permitting process should be streamlined to provide greater efficiency in the delivery of critical infrastructure projects. 

Status:  

  • Fiscal Year 2020 appropriations: The House and Senate are just beginning work on Fiscal Year 2020 appropriations legislation.  Infrastructure investment levels should – at a minimum – be set at the authorized levels and include in the baseline the additional $10 billion in annual infrastructure investments agreed to in the 2017 Bipartisan Budget Agreement.   
  • Infrastructure Package:  The Trump Administration FY 2020 budget proposal includes $200 billion in new federal money above currently authorized infrastructure programs over 10 years.  Unlike previous years, the proposal leaves most the details to Congress to work out.  The plan does not identify a source of revenue to pay for this new investment.  The proposal will also focus on streamlining reviews and Federal permit reform, ensuring that environmental reviews and the permitting process do not take more than 2 years for all projects.   
  • House Democrats: The House Democratic leadership has called on committees with jurisdiction over infrastructure programs to have legislation ready for floor consideration.  While much of the details remain to be worked out – including how the package will be paid for - there are reports that the total investment in the package will be $500 billion.   
  • Senate Environment and Public Works Committee: The Senate Environment and Public Works (EPW) Committee has been working to develop legislation to reauthorize the existing surface transportation law – the FAST Act.  While the legislation does not expire until later next year, Committee Chairman Barrasso (R-WY) has stated that he believes that the EPW Committee portion of any infrastructure package should reauthorize current highway programs and streamline project review and permitting.