A Tough Road

As concrete producers, you deal with aggregates in one form or another. But did you realize what a behemoth the aggregates industry is and how it influences our entire economy?

The National Stone, Sand and Gravel Association (NSSGA) reports aggregate production exceeded more than 3 billion tons in 2006. NSSGA values the tonnage at $21 billion, contributing almost $40 billion to the nation’s gross domestic product. Every $1 million in aggregate sales creates 19½ jobs; every dollar of industry output returns $1.58 to the economy.

A significant portion of these coarse and fine aggregates finds its way into America’s highways. Thus, the decisions made involving the nation’s highway system have a huge impact on concrete producers and aggregate companies.

“Pork barrel projects are politicizing our highway system.”

Since 1956, the Highway Trust Fund has disbursed $634 billion for road and bridge projects. Aggregates make up 80% of concrete and 94% of asphalt; 38,000 tons of aggregates are necessary to build one lane/mile of interstate. The government estimates that $78.8 billion is needed annually until 2022 just to maintain the status quo. This increases to $131.7 billion annually if improvements beyond mere maintenance are made to the highway system.

Pomeroy Corp.,a precast concrete producerin Perris, Calif.,
manufacturesmany concrete elements usedin highway construction.

President Bush will issue his 2009 budget proposal for highway spending later this year. This will likely be a skeletal framework, leaving the details and funding to the new administration and the debate to the new Congress.

This debate will be the most important highway policy since Congress established the Interstate Highway System in 1956. The outcome will leave a legacy for future generations.

The federal-state highway effort began in 1916 with the Federal Aid Road Act. A key feature of the legislation required that the states must have a highway department capable of designing, constructing, and maintaining designated roads in order to share in the federal appropriations.

This was followed by the Federal Highway Act of 1921 and the Post Office Appropriations Act of 1922. These mechanisms stayed in place until 1956.

46,871 miles of interstate

Under President Eisenhower, Congress enacted the Federal-Aid Highway Act, which ultimately built 46,871 miles of interstate highways between 1956 and the 1990s. Eisenhower’s dream was fulfilled when the Boston Central Artery/ Tunnel Project was finished, marking completion of the entire system.

Unfortunately, Congress transformed the highway bill into a catchall for special projects. It began with the Intermodal Surface Transportation Efficiency Act (ISTEA) in 1991, which expanded traditional road building to include the development of a national intermodal transportation system. In 1998, Congress passed TEA-21, which retained ISTEA’s essential features, but for the first time directed all fuel taxes to the Highway Trust Fund. SAFETEALU in 2005 added the safety dimension to highway planning and design.

But by 2005 as the road bill became more of a political issue, with many politicians adopting the distasteful habit of tacking “earmarks,” to the funding. These earmarks are a polite way of characterizing local pork barrel spending.

Congress added an unprecedented 6300 earmarks to SAFETEA-LU. The poster child for these unnecessary earmarks was the Bridge to Nowhere, a $223 million earmark for a project in sparsely populated Ketchikan, Alaska.

It’s in your interest to listen to what the candidates say about this issue. A strong roadbuilding and highway maintenance bill will yield great benefits not only to your bottom line, but to the nation’s economic health.

Pierre Villere is President and Managing Partner of Allen-Villere Partners. Contact Pierre Villere at pvillere@allenvillere.com or telephone 985-727-4310.

© 2008 Hanley Wood, LLC. All Rights Reserved. Republication or dissemination of “Digging out” (The Concrete Producer, May 2008) is expressly prohibited without the written permission of Hanley Wood, LLC. Unauthorized use is prohibited. Allen-Villere is publishing “Digging out” under license from Hanley Wood, LLC.

By | 2017-10-02T14:22:43+00:00 May 23rd, 2008|