Modest Growth Seen in Transportation Spending

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DALLAS — Transportation infrastructure construction will grow slightly faster than the rest of the economy next year, up 3.1% to almost $192 billion in 2015 from $186 billion in 2014, according to a new study from the American Road & Transportation Builders Association.

The growth rate in transportation spending is expected to exceed overall economic increases but only barely, said Alison Premo Black, the chief economist at ARTBA. The Federal Reserve has predicted growth in the U.S. gross domestic product of 2.6% to 3% in 2015, she said.

Spending on highway, street, and related construction will be tempered by uncertainty over the level of federal funding in a new, multi-year spending bill, as well as the slow recovery of state and local tax revenues and capital budgets to pre-recession levels, Black said.

Growth in spending for highway and street work will be anemic and spotty, Black said. Road and street spending will be up 1.2% next year, to $52.4 billion from $51.8 billion in 2014, but will still be well below the $67.3 billion posted in 2009.

Highway investment will be up in 24 states and down in 19 states and the District of Columbia, the study said. Seven states will see spending increases or decreases of 5% or less.

Spending on local road projects will be buoyed by the more than $17 billion of transportation investments approved by state legislatures and voters in 2014. Black said state lawmakers approved 14 measures that will provide more funding for road and bridge projects, with voters adopting 79% of transportation-related revenue proposals on state and local ballots.

In addition to the new construction work, state and local governments are expected to spend $38.5 billion on highway maintenance projects, $13.2 billion on transportation planning and design, and $7 billion to acquire rights-of-way for road and bridge projects.

The growing public-private partnerships market will also generate more infrastructure spending in 2015, after four states - Colorado, North Carolina, Ohio, and Pennsylvania - signed their first transportation P3 agreements in 2014, Black said.

Bridge construction will continue to increase in 2015 as it has over the past decade, Black said. Bridge and tunnel work accounted for 19% of highway spending in 2000 but will top 37% in 2015 and the sector's growth should continue over the next five years, she said.

Almost 60% of the total spending on bridges and tunnels in 2015 will take place in 10 states, including New York, California, Texas, New Jersey, and Ohio.

Airport spending will increase in 2015 as the growing economy prompts more air travel and cargo shipments, and those factors should support increased investment in aviation infrastructure for the next five years, Black said. Total value of airport runway and terminal construction is expected to reach $13.1 billion next year, up from $12.5 billion in 2014.

States with significant airport projects in 2015 include California, Colorado, Florida, New York, and Virginia, Black said.

The ARTBA study said subway construction and light rail work will increase next year to $8.3 billion from $7.1 billion.

The federal Highway Trust Fund provides 52% of state transportation capital outlays, ARTBA said.

Removing the concern that state officials have over the Highway Trust Fund's ability to support federal transportation grants to road and transit projects will be a priority of the new Republican-controlled Congress when it convenes in January, Rep. Cathy McMorris Rodgers, R-Wash., chairwoman of the House Republican Conference, said in a TV interview.

"As you think about building a healthy economy, we have a long list of important infrastructure needs in this country, and [a long-term transportation bill) is a priority," Rodgers said Dec. 4 on MSNBC's "Morning Joe" program.

"This is something that we can come together on, which I'm excited about," she said. "I think we all recognize that this is one where we should."

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