News to Note: President’s Message to the UTCA - April 2005

Alexander Hamilton espoused that the federal government should have authority over states. This contradicted the thinking of Thomas Jefferson who wanted individual state rule. Hamilton reasoned that legislation on a state level would be self-serving, and not applicable to all in these United States. As New Jersey recently experienced, Hamilton’s way of thinking was right.

As discussed in previous issues, Executive Order 134 issued by former Governor McGreevey effectively put a stop on the bidding and awarding of NJ Department of Transportation (NJDOT) projects that have any federal funding. Governor Cody, after being rejected in his suit against the federal government concerning the viability of Executive Order 134, issued Executive Order 18. Executive Order 18 states that the provisions of Executive Order 134 shall not apply to NJDOT projects. Thank you, Governor Cody.

Executive Order 18 allows $300 million of necessary NJDOT projects previously paralyzed to move forward. Additionally, at press time, the state Senate is approving legislation that will enable federal funds to be applied to all state highway transit projects.

The dollars just discussed are drawn from New Jersey’s transportation trust fund. Currently, it’s at perilous levels, barely able to sustain the transportation needs of the 8 million plus inhabitants of our state. In two years, the transportation trust fund balance will only be able to cover the debt service of previous borrowings, without any dollars available for maintenance or new construction.

There is a way to help replenish the fund, through an increase in the motor fuels tax. At 12.5 cents per gallon, New Jersey has the third lowest fuel tax in the country. New Jersey needs its elected officials to step up to the plate and push for an increase.

The UTCA staff is constantly working with the leadership of both parties to get a realistic increase implemented. This continuing effort is of major importance to everyone. Keep in touch with your local and state officials to reinforce the message.

On the Federal level, President Bush recently introduced his budget proposal for fiscal year 2006, which begins in October 2005. He included a modest increase in transportation funding in his proposal, $284 billion in guaranteed investments, up from the $256 billion proposed by the administration last year.

In the House of Representatives the House Transportation and Infrastructure committee unanimously approved legislation -- The Transportation Equity Act: A Legacy for Users (TEA-LU) to authorize the federal highway, transit and safety program through fiscal year 2009. This takes the place of Transportation Equity Act of the 21st Century (TEA-21). There are still a number of issues that must be resolved on the path through the House and Senate, but it is a good start.

Also on the federal end, the American Road and Transportation Builders Association (ARTBA) continues to push for an increase in funds by the federal government to meet the needs identified by the US Department of Transportation. With federal funds available, states are entitled to matching funds from the federal government. But you have to have funds in your transportation trust fund for this to take effect. Since the dollars in New Jersey’s fund are quickly and consistently depleted, minimal matching funds are available. With a raised fuel tax, New Jersey residents would receive more dollars from the federal government for needed transportation work. Again, New Jersey needs its elected officials to step up to the plate and push for an increase.

I recently returned from an ARBTA directors meeting in Las Vegas. It was interesting to note that contractors across the country have similar problems as ours concerning state funding and depleting transportations trust funds. Although it appears federal matching funds have increased over the years, states are cutting back or flat lining their transportation investment budgets. Fortunately, we have two associations who help keep our interests and the interests of New Jersey citizens at the forefront. ARTBA representative us collectively in Washington, DC as does the UTCA in New Jersey. Please support both associations.

Congratulations to West Bay Construction, beginning its second decade in the construction industry. Frank Cordetti and his staff have performed well, and we wish them continued success. We also want to recognize True Associates beginning its third decade. As an associate member, Tom True and his group have provided the insurance needs of our members and others through their affiliations with reliable underwriters. We wish you continued growth and success.

Remember, contact your elected state representatives and tell them your views on why we need a realistic increase in our state motor fuels tax. If you have any questions, don’t hesitate to contact UTCA staff.

~ James E. Johnston, Jr.