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Tolling Points

Counting Down to Year Zero: Distributors Join the Highway Debate

By: 
Bill Cramer

A new front is opening up in the transportation reauthorization debate, with road users weighing in on the hardship they’ll face if the Highway Trust Fund runs out of money.

Look no farther than Associated Equipment Distributors (AED), an association of 500 companies that account for $15 billion in annual sales of construction equipment, supplies, and services.

The front page of AED’s website now features a countdown clock that shows the days, hours, minutes, and seconds remaining before the reauthorization deadline.

“At midnight on September 30, 2014, the federal highway program will collapse,” AED states. “The Highway Trust Fund (HTF) won't be able to support any new road, bridge, or transit investment, putting at least $2.4 billion in equipment market opportunity and close to four thousand equipment dealership jobs at risk.”

The stakes are high. And as the reauthorization process picks up momentum, AED is asking its members to tell Congress all about it. A similar measure to IBTTA’s Moving America Forward campaign.

By the Numbers
IBTTA is working hard to make the case for the economic benefits of addressing the highway infrastructure deficit. We’re also shedding light on the safety, employment, and productivity costs that will continue to mount until the U.S. highway system is properly funded.

At IBTTA we know the argument is even more compelling when it comes from the stakeholders whose businesses and jobs depend on an effective, reliable highway system. And AED has the basic impact data to make the case: “Our average distributor member achieves more than $40 million per year in revenues, and employs 80 people.”

AED’s Year Zero Scenario is based on the Congressional Budget Office’s July, 2013 conclusion that Congress “would need to reduce the authority to obligate funds in 2015 to zero in both the highway and transit accounts” without a change in funding. The scenario calculates state-by-state losses to the equipment market, then adds up the job and market impact across the U.S.

Multiply that impact across the full range of manufacturing, wholesale, and retail activities in the U.S. economy, and you begin to see the power of AED’s argument.

Unusual Suspects
The equipment distributors’ pro-active response points to a big opportunity for the tolling industry, and for anyone else who favors a wider toolbox of funding options for highway infrastructure. Reauthorization will capture the attention of stakeholders who may be entering the debate for the first time, or returning after a long absence. Our conversations with these “unusual suspects” could be the beginning of a wider set of partnerships that last for years.

They may show up at the regional, state, or federal level.

They might have a specific concern, like the 1,000 state and local bridges in Pennsylvania that were given lower weight restrictions in 2013 due to poor maintenance and repair. (AED foresees $101 million in lost sales and 167 lost jobs in Pennsylvania if the HTF goes bankrupt.)

They might be ready to argue the benefits of tolling, like the companies that locate next to interstates and toll roads to capture the benefit of predictable, just-in-time delivery and convenient access.

These conversations and others like them will be coming soon to a legislative committee, a boardroom, or some other public setting near you. As venture capitalist Paul Romer said in 2004, a crisis is a terrible thing to waste, and the countdown to Year Zero might be just what we need to focus and win the debate.

 

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