202-289-4434 ktaylor@artba.org

Lane Construction Corporation Chief Bob Alger Elected ARTBA Chairman

By Mark Holan

Robert “Bob” E. Alger began his transportation construction career with a trio of tips and a trifecta of tenders.

He took all three pieces of advice from his father: “Be honest; be trustworthy; and work hard. You’ll have a job for life.”

Of course, the younger Alger could only accept one of the three job offers he received after earning a civil engineering degree from Penn State University. He picked The Lane Construction Corporation 40 years ago and never looked back.

Dad was right.

ARTBA’s 2018-2019 chairman started at Lane as a job engineer on the Cowanesque Dam in Pennsylvania. He ascended through the ranks as a project manager, district manager, and executive. He was named Lane’s president and CEO in 2001.

Under his leadership, the company has grown from a regional Northeast contractor to become a national transportation and heavy civil construction powerhouse. Revenues have grown from $350 million in 2001 to $1.7 billion in sales volume. Massive Lane-built highway, bridge, tunneling, rail, transit, airport, dam and lock projects are helping connect and improve communities in multiple states across America.

“You always knew who the up-and-coming leaders of the organization were, whether you worked with them or not,” said Lane Chief Operating Officer Mark Shiller, a 30-year company veteran.

“Bob definitely stood out as one of the individuals who was going to rise to the top,” Shiller said. “There was no question in my mind, or the minds of others. His leadership qualities were well known.”

Alger’s roster of ARTBA volunteer leadership positions includes: senior vice chairman, first vice chairman, Contractors Division president, Contractors Division first vice president, ARTBA Foundation trustee, and Trans2020: “MAP-21 Policy Promotion, Implementation & Funding Enhancement Task Force” co-chair.

His leadership roles also extend to other industry groups. He’s a founding member of the Construction Industry Ethics and Compliance Initiative (CIECI) and Construction Industry Safety Initiative (CISI) group, which promotes Safety Week annually across the country. He’s a past president of The Moles, The Beavers, and American Society of Civil Engineers (ASCE) Construction Institute. He’s also a past chairman of the Construction Industry Roundtable (CIRT).

Bob and his wife, Joan, have two adult children, Bob, Jr., and Lauren.

“Bob lives his personal life by the same values he leads his business life,” said David Benton, executive vice president at Lane. “He is very much a family man. I am proud of the fact that I have Bob as a boss, but I am equally proud of the fact that I have Bob as a very close friend.”

Chairman’s Agenda

Alger outlined his chairman’s agenda during an October presentation at ARTBA’s national convention in New York City.

He said ARTBA would remain laser-focused on its core mission of transportation market development by working to achieve three main goals: a permanent revenue solution for the Highway Trust Fund; passage of a new infrastructure investment package that includes significant investments in the National Highway Freight Network; and laying the groundwork for the scheduled 2020 reauthorization of the FAST Act highway and transit investment law.

The association will also “continue to collaborate with federal agencies to build a regulatory environment conducive to more efficient and safe project delivery,” he added.

Special focus will be given to expanding the number of firms and organizations supporting ARTBA’s Transportation Makes America Work lobbying and advocacy communications program to help ensure the industry has the necessary financial resources to achieve its legislative and regulatory goals, Alger said.

In the safety arena, the continued growth of the American National Standards Institute (ANSI)-accredited Safety Certification for Transportation Project Professionals™ (SCTPP) program, is another priority. The SCTPP was launched by industry executives and safety leaders in fall 2016.

“Safety training and education have always been core ARTBA competencies,” Alger said. “We will continue to build greater awareness and participation in safety certification programs by contractors and public agencies.”

Finally, Alger highlighted his plans to engage ARTBA officers and directors, the Industry Leader Development Council, and Women Leaders Council to increase “peer-to-peer” membership development outreach.

“There’s a lot of work of ahead of us,” Alger said. “We’ve got to understand that, then roll up our sleeves, put on our hard hats, and let’s go do it.”

Mark Holan is ARTBA’s editorial director.

Alger’s Honors

• ASCE’s Outstanding Project & Leadership Award, 2013
• The Moles Award for Outstanding Achievement in Construction, 2011
• Outstanding Engineering Alumni Award from Penn State’s College of Engineering, 2006

Lane’s First ARTBA Chairman
Bob Alger is the second leader of The Lane Construction Corporation to become ARTBA chairman. Lane President William R. Smith took the wheel of the association at its 28th annual meeting in 1931.

Attendees at that St. Louis convention discussed a $12 billion road construction program, split equally between the federal government and then 48 states, to relieve the massive unemployment of the Great Depression.

John S. Lane started the Connecticut-based company in 1890 as a stone-crushing operation for railroads and streets. The firm quickly expanded its operations throughout New England and New York State.

By the Great Depression, Lane had paved more than 1,400 miles of roadway, becoming one of the largest highway contractors on the East Coast.

In 2016, Lane was acquired by Salini Impregilo Group, a global construction contractor specializing in hydro and dams, railways, metro systems, roads, and motorways.

Transportation Construction Market Projected to Near $280 Billion in 2019

By Dr. Alison Premo Black

The U.S. transportation infrastructure market is expecting 4.2 percent real growth in 2019, after adjusting for project costs and inflation, according to ARTBA’s annual forecast. Increased transportation investment from all levels of government—federal, state and local—will help drive this growth across all modes.

Market activity is expected to reach $278.1 billion in 2019, up from 2018’s $266.9 billion.

The transportation construction market also grew by 4.2 percent in 2018, driven largely by gains in airport terminal and runway construction, which increased by $5.8 billion, or 33 percent.

Spending on public highway and street construction rose by $2.7 billion—5 percent—in 2018, recovering some of the market decline in this sector from 2017.

Port and waterway construction and private highway and bridge construction associated with residential and commercial developments also grew in 2018. Infrastructure construction by Class I railroads and public bridge and tunnel construction were down 4 percent and 2 percent in 2018, respectively.

Federal transportation investment received a boost from the FY 2018 appropriations bill—Congress provided an additional $5 billion that will be available over the next four years. The $2.5 billion for highway programs is in addition to an increase of $930 million approved as part of the core highway program under the 2015 FAST Act law.

Market Risks

One wild card in the forecast is the outlook for the reauthorization of the FAST Act and the ability of Congress to find additional revenues to support the Highway Trust Fund. If states start delaying projects in response to uncertainty over the future of the federal-aid highway program, then it would temper 2019 market growth.

Overall, highway construction market activity is expected to increase in about half of the states and Washington, D.C. in 2019. Some of the largest markets include California, Colorado, Florida, Illinois, Maryland, Michigan, New York, Ohio, Pennsylvania, Texas and Virginia.

Other market risks include uncertainty over material prices, increased labor costs and potential labor shortages in some regional markets.

ARTBA estimates project costs, which remained below general inflation between 2013 and 2016, rose 2.7 percent in 2017 and 3.8 percent in 2018, largely due to increased costs for diesel fuel and materials.

Price data shows that average annual prices in 2018 for steel products were up between 6 and 14 percent, depending on the type of product, compared to 2017.

It is difficult to isolate the impact of tariffs on the price of steel-related products from other market forces, such as the cost of energy, transportation or input materials. But the uncertainty created by the steel and aluminum tariffs enacted in March 2018 will continue to have an impact on the highway construction market as contractors include that dynamic in their bids and cost structure. Industry wages for employees on job sites were up 3 percent in 2018. The forecast assumes that project costs in 2019 and beyond will increase at the historical rate of 2.7 percent as energy prices stabilize.

Among the forecast highlights:

Public & Private Highway, Street & Related Construction

ARTBA estimates that work on private highways, bridges, parking lots and driveways will increase from $65.9 billion in 2018 to $69.1 billion in 2019, and will continue to grow over the next five years as market activity increases in those sectors. This data is captured by the U.S. Census Bureau as part of residential and commercial construction investment.

The real value of public highway, street and related work by state DOTs and local governments—the largest market sector—is expected to increase by 5 percent to $66.5 billion after growing 4.5 percent in 2018.

Strong growth in large states are expected to drive national gains. California, Florida, Illinois, Pennsylvania, Texas and Virginia have shown significant increases in contract awards over the last year, a leading indicator of highway construction activity in those states.

The impacts of the $2.5 billion increase in federal transportation investment through the FY 2018 appropriations process will vary, depending on the timing of state obligations and the awarding of projects through several U.S. Department of Transportation (DOT) discretionary programs. But overall, this boost will contribute to growth in 2019. The increase in state and local revenues through user fee increases, bond programs, ballot initiatives and other funding mechanisms also will support additional activity next year.

Bridges & Tunnels

The pace of bridge & tunnel work slowed in 2018 but is expected to resume growth of 1.5 percent in 2019. Bridge and tunnel activity fell slightly from $31.9 billion in 2017 to $31.2 billion in 2018, after adjusting for project costs and inflation. It is expected to grow to $31.7 billion in 2019, with the pace increasing to over 2 percent annually in 2020 and beyond. Light Rail, Subways, & Railroads Public transit and rail construction is expected to grow from $19 billion in 2018 to $20 billion in 2019, a 5.7 percent increase.

Airport Runways & Terminals

The value of airport construction, including terminals, runways and related work, is expected to increase 4.4 percent from $23.2 billion to $24.3 billion. After growing 38 percent in 2018, airport terminal and related work, including structures like parking garages, hangars, air freight terminals and traffic towers, is expected to increase from $18.4 billion in 2018 to $19.2 billion, an increase of 4.5 percent. Runway work, which was up 18 percent in 2018, is forecasted to increase from $4.9 billion in 2018 to $5.1 billion in 2019.

There are currently 11 major airport expansion projects over $1 billion that are underway or about to begin in California, Colorado, Florida, Georgia, Illinois, New York, Tennessee, Texas, Utah, and Virginia.

Ports & Waterways

The value of port and waterway investment is expected to grow 3 percent to $2.6 billion in 2019. Construction activity in 2018 was $2.5 billion, up from $2.2 billion in 2017.

The ARTBA forecast is based on a series of proprietary econometric models for each mode and analysis of federal, state and local data and market intelligence.

Dr. Alison Premo Black is ARTBA’s chief economist.

Purchase ARTBA’s 2019 Market Forecast

ARTBA Chief Economist Dr. Alison Premo Black’s comprehensive multi-modal transportation construction market forecast is available for sale.

Member Price: $225 Non-Member: $300

Purchase: www.artbastore.org.

Voters Re-Elect State Lawmakers Who Supported Gas Tax Increases, New Analysis Finds

Click here to view the full report.

Voters in 12 states re-elected 93 percent of 530 state lawmakers who supported a gas tax increase between 2015 and 2018 and ran for re-election in 2018. Winning state lawmakers in Nov. 6 races included 92 percent of Republicans, and 94 percent of Democrats, according to a new analysis from the American Road & Transportation Builders Association’s Transportation Investment Advocacy Center™ (ARTBA-TIAC).

The results are consistent with those from the last five years that show support for a gas tax increase does not hurt political careers. Including 2018, voters have re-elected 92 percent of nearly 1,900 state lawmakers who voted in favor of a gas tax increase since 2013. This support for lawmakers who approve a gas tax increase persists across party lines as well— over 90 percent of Democrats and 94 percent of Republicans were re-elected.

Ninety percent of 211 state legislators who voted against a gas tax increase and ran for re-election in 2018 won their races, including 88 percent of Republicans and 96 percent of Democrats.

Of the 923 elected officials who voted against a gas tax increase between 2013 and 2018 and ran for re-election, 92 percent were also given another term.

A comprehensive report and an interactive map showing the state-by-state results can be found at www.transportationinvestment.org.

TIAC operations are supported by ARTBA’s “Transportation Makes America Work” program.

Established in 1902, ARTBA represents the U.S. transportation construction industry before Congress, the White House, federal agencies, the courts, news media and general public.

Special Report: The 2018 Election Results & Federal Transportation Investment/Policy

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The Democratic Party’s successful election night takeover of the U.S. House of Representatives will return Washington to an era of divided government in 2019. This marks the fourth mid-term election in a row that at least one chamber has flipped partisan control and brings to an end an eight-year leadership run for Republicans in the House.

As expected, a favorable map – where Republicans defended eight seats and Democrats had to protect 25 – in the Senate allowed for Republicans to pick up seats in the upper chamber. The majority is 52-49, but could an additional three seats after final races are called in Florida, Arizona and Mississippi.

While there will be no shortage of spin from both sides about what the 2018 elections mean for each party and its prospects in the 2020 elections, ARTBA is focused on what the makeup of the next Congress means for efforts to advance an infrastructure package that leaders in both parties have advocated since the 2016 election and a permanent Highway Trust Fund revenue solution.

House Democrats will theoretically be able to pass legislation without GOP votes due to the chamber’s institutional rules that greatly advantage the majority party. However, the Senate is more complicated. Even with the GOP gains, it will not have the 60-vote super majority needed to bypass the chamber’s rules that empower the minority to stop any legislation with 41 votes—a threshold Democrats will exceed by at least five votes. As such, bipartisan legislation and compromise between House and Senate leaders and President Trump will be necessary to get the simplest of bills enacted, let alone major pieces of legislation.

The end of one election cycle immediately transitions to the next. Not only will the presidential election be on the minds of leaders in Washington, but a similarly difficult Senate map to the one that confronted Democrats in 2018 essentially flips for the GOP in 2020, with 23 Republican seats up for grabs compared to 11 for the Democrats. A House of Representatives with only a likely 5-10 seat majority for Democrats will add increased volatility to a 2020 election where just about any scenario is possible.

While it would be naïve to suggest the 2020 election will not loom over nearly all legislative strategy decisions made by leaders of both parties for the next two years, it does not necessarily portend gridlock across the board. There will be efforts by both parties to showcase not only their ideas and direction for the country, but also their ability to lead and work across the aisle. Of all the major issues before Congress, few can rival the broad bipartisan support that transportation investment and policy reforms have routinely enjoyed as evidenced by the fact that the FAST Act and MAP-21 surface transportation bills were enacted under divided government.

Another key advantage for the federal transportation programs is the looming Highway Trust Fund revenue shortfall and expiration of the federal highway and transit programs in 2020 that will require congressional action of some form in the next two years. Despite the predictions of legislative partisan gridlock and bruised egos following Tuesday’s elections, we are looking at another busy couple of years on the transportation front.

Voters Across the Nation Demonstrate Support for Transportation Investment

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Voters in 31 states Nov. 6 once again showed their support for transportation infrastructure investments, approving 79 percent of 346 state and local ballot measures. In the most closely watched initiative (Proposition 6), California voters turned back an effort (55 percent to 45 percent) to repeal an increase in the state gasoline and diesel motor fuels tax that had been previously approved by the legislature as part of a 2017 transportation funding law. That decision by voters will help preserve more than $50 billion for urgently-needed highway, bridge, transit improvements in California over a 10-year period.

In total, the 272 approved initiatives are expected to generate over $30 billion in one-time and recurring revenue, according to the analysis conducted by the American Road & Transportation Builders Association’s Transportation Investment Advocacy Center™ (ARTBA-TIAC).

The 2018 preliminary results reaffirmed the trend of recent years demonstrating strong voter support for investments to maintain and improve their state/local transportation networks. Including 2018, voters have approved 78 percent of nearly 1,700 transportation investment ballot measures tracked by ARTBA-TIAC since 2009.

Voters in California preserved the $5.2 billion annual transportation investment supported by the gas and diesel fuel tax increase. The repeal attempt was part of a larger effort by Congressional leaders to increase Republican voter turnout in several key California Congressional districts.

A proposed state gas tax increase in Missouri met unexpected resistance at the polls, with voters rejecting the measure 54 percent to 46 percent. Opponents of the measure questioned why $288 million of the estimated $412 million in new annual revenue would be directed to state highway police, which may have been a contributing factor in the defeat.

In Colorado, voters rejected two measures to provide new transportation investments. Proposition 109, a measure to provide one-time funding with a $3.5 billion bond, was rejected 39 percent to 61 percent. Proposition 110, which would have increased the state sales tax by 0.62 percent for 20 years and provided an initial jumpstart with a $6 billion bond, also failed, 40 percent to 60 percent. Both measures were placed on the ballot through voter referendum. The Colorado Department of Transportation estimates it is facing a $25 billion transportation funding gap over the next 25 years. Despite the loss, voters are not done with transportation funding; 2018 legislation authorized a $2.3 billion bond ballot measure for roadways and transit improvement for the November 2019 ballot, which would only appear if both 2018 ballot measures failed.

Some additional highlights include:

• Statewide measures to protect transportation funds from being diverted to non-transportation purposes passed in Connecticut and Louisiana.

• Florida approved nearly $25 billion in new transportation investment revenue, the most through local ballot measures.

• Of the 337 local ballot measures, most (229) asked voters to approve property tax increases, primarily in Ohio (165) and Michigan (49) where many municipalities consistently ask voters to renew ongoing taxes to pay for local roads and infrastructure repairs.

• Sales/income taxes generated the most approved revenue ($27.53 billion).

Earlier in the year, voters approved 192 measures for an additional $6.4 billion in transportation revenue. The market impact of these ballot measures is difficult to project as revenue approved ranges from immediate one-time investment to a contribution made annually for as long as 30 years.

The complete report and an interactive map showing the state-by-state results can be found at www.transportationinvestment.org.