The aggregates industry has provided the main ingredient in both asphalt and concrete to satisfy the public demand for smooth, durable pavements on our nation’s highways.
The role of the aggregates industry in the construction and maintenance of the federal-aid highway system is not insignificant. It is helpful to understand just how large the federal-aid highway system is and the impact it has had on the aggregates market. Aggregates make up 94 percent of asphalt and 80 percent of concrete. An estimated 38,000 tons of aggregates are necessary to construct one mile of lane of interstate highway. FHWA estimates that $91 billion is needed annually just to maintain the status quo. That number rises to $170 billion needed on an annual basis to significantly improve conditions and performance. Between 1982 and 2003, less than half of the roadway that was needed to maintain a constant congestion level – only 41 percent – was actually added.
Today, federal-aid highways total 980,968 miles and include the original 46,781 miles of the Interstate Highway System.
The Intermodal Surface Transportation and Efficiency Act (ISTEA) of 1991 established the National Highway System (NHS). The NHS includes 115,502 miles of principal arterials, highways, international border crossings, and ports. All routes on the Interstate System are a part of the National Highway System.
In 2012, total highway capital spending by all levels of government totaled $70 billion. The federal government’s investment is 44 percent of the total highway construction market. State and local governments, and toll revenues, make up the remainder. Most federal highway dollars are invested on improvements to the federal-aid highway system and help to drive state and local spending.
Considering the highway construction market is approximately 40 percent of the aggregates market in the United States, the aggregates industry has a significant stake in the outcome of the next surface transportation bill.
Future federal investment in highway construction is in doubt beyond 2014. The HTF, by all estimates, will not have enough revenue to support the federal program in the absence of congressional action. The federal fuel tax has not been adjusted since 1993 and the cost of construction has skyrocketed.
Moreover, the “Bridge to Nowhere” debacle, a $223 million earmark for a project in Ketchikan, Alaska, inserted by then-House Committee on Transportation and Infrastructure Chairman Don Young (R-Alaska), became the poster child for excessive federal spending and harmed public support for the Federal-aid Highway Program. Given high gas prices and the reluctance by lawmakers to support a fuel tax increase, many are pushing for greater private sector funding even though revenues from tolls and public-private partnerships will not come close to replacing the current federal commitment to the highway program.
Many funding options have been considered. The two federal commissions authorized by SAFETEA-LU arrived at the same conclusions: In the short-term, increase the motor fuel user fees; in the long-term, transition to a vehicle-miles traveled user fee. It is clear, however, that no one option is a panacea.
Why the Aggregates Industry Needs to Care
Why should 107,800 employees in the aggregates industry invest time and money into the outcome of next surface transportation bill? The answer is that the decisions Congress makes on this issue are critical to the future of the aggregates industry.
Employees of stone, sand and gravel companies can affect the decision-making process, yet the level of involvement from the aggregates industry in the legislative process, while good, can be better – much better. With the enactment of ISTEA in 1991, most assumed – incorrectly – that increased vehicle miles traveled would drive up motor fuel user fee revenues, and thus more highway spending on a year-to-year basis.
While highway spending has increased, MAP-21 only continues level funding of the program through FY 2014. Congress must take this opportunity to ensure the solvency and sustainability of the Highway Trust Fund now and into the future, while the historic program reforms contained in MAP-21 are implemented.
What is at stake for the Aggregates Industry
The aggregates industry’s opportunity to influence the highway construction market at the national level typically occurs every year, but intensifies the year before and year of Congress reauthorizing the Federal-aid Highway Program. The next surface transportation bill will not be a typical reauthorization. With the funding crisis looming, it is incumbent on transportation stakeholders to increase the coalition of transportation supporters and build consensus around a surface transportation funding solution.
In short, Congress again will debate the future of transportation system in the United States, a debate not seen since the enactment of the Federal-Aid Policy Act of 1956. The issues will revolve around money, money, and more money. Will Congress be able to raise the user fee? If it raises the user fee, will it be spent on highways? Will Congress turn to another funding mechanism? Who will control the funding? Will the federal commitment to highway construction and modernization shrink? How will congressional action, or lack thereof, affect the aggregates market?
The risks are great, the challenges daunting, and the opportunities potentially endless. NSSGA recommends that each and every aggregates company and their employees get involved in the political process. Each and every employee must make some effort, no matter how small, towards making a difference and leaving a legacy for the future of the aggregates industry.