Challenges and Opportunities in 2012

The past three years have been very challenging for the road building industry and 2012 will yield even more challenges. But with challenges come hope and opportunity.
Gov. Scott’s bold plan to advance over $1 billion in new work offers great promise. At the same time contractors must secure financing in order to bid and fund these jobs. These projects are all large but offer opportunities for many subcontractors and suppliers in addition to the prime contractors.
In the Orlando area agreement has been reached to begin the Wekiva Parkway. Concerns have been raised that other local projects may be deferred because of Wekiva. In reality, a combination of things have forced local leaders to make difficult choices. If the Legislature had not raided the State Transportation Trust Fund (STTF) two of the previous three years there would be fewer (if any) project deferrals. The Department has done a great job of filling the gaps created by the $265 million in sweeps in 2009 and 2011. Eventually the impact of the sweeps must be felt and we are seeing that in project deferrals not only in Orlando but all across the state. Of course, the fact that collections for gas taxes and tag and title fees are down has had a huge impact. The 5 year work program has been modified following each Revenue Estimating Conference. Gov. Scott has made it clear to legislative leaders that he will not stand for another sweep of the STTF. That gives us great hope moving forward.
There is opportunity for new funding in a couple of areas without raising taxes. Hopefully the Legislature will consider returning the 2009 increases to the tag and title user fees to the STTF. This could bring in an additional $500 million in recurring revenue for the STTF. The objection to this proposal is that General Revenue cannot stand to lose $500 million in a year when we are facing a projected deficit of $1.5 Billion - $2 Billion.
I understand the concept that if you increase government revenue they will spend the money. I follow the logic that the only way to cut waste in government spending is to not allow for revenue increases. You must first cut spending in all areas that are unnecessary. I agree with that thought process to a point. First, I don’t believe we will ever eliminate all wasteful spending. Second, I don’t think government should rob dedicated trust funds to help meet the needs of General Revenue. If all possible cuts have been made than maybe it’s time to consider ideas that increase revenue.