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Issue 2015.1 Associated General Contractors of Arkansas #advocacy SPEAK UP Small Chapter of the Year 2 TABLE OF CONTENTS Issue 2015.1 Small Chapter of the Year #advocacy 5 Keeping Arkansas Ahead of the Curve by Craig Douglass, Move Arkansas Forward 11 Construction Management: A Great Fit for the Arkansas Taxpayer Executive Vice President by Robert W. Beeler, University of Arkansas Richard Hedgecock Editor Sign up, Speak up and Keep up: Beth Tyler 17 The 114th Congress and Change AGC ARKANSAS by Jeff Shoaf, AGC of America 523 E. Capitol Avenue P.O. Box 846 Little Rock, AR 72203 501.375.4436 Phone 501.375.0110 Fax www.agcar.net 14 By the Numbers [email protected] The AGC Blueprint is a quarterly 22 Word from the Top: Mark Lamberth publication of AGC Arkansas, and is produced exclusively for AGC Arkansas members. Statements of fact and opin- DEPARTMENTS 26 Comings & Goings ion are the responsibility of the authors alone and do not imply an opinion on the part of the offi cers or members of 28 New Members the AGC. ©Copyright 2014 by AGC Arkansas. All rights are reserved. Mate- rials may not be reproduced or trans- 28 Index of Advertisers @AGCARKANSAS lated without written permission. For reprint permission, contact the Editor at [email protected]. Subscription rates are included in the association mem- bership dues. Additional copies are $15. AGC Arkansas AGC Blueprint • 2015.1 AGC Blueprint • 2015.1 4 Keeping Arkansas 5 Ahead of the Curve by Craig Douglass Surface transportation infrastructure. I sup- Move Arkansas Forward pose that’s a high-falutin’ way of identifying highways, roads, streets and bridges. It’s also a way of recognizing one of the most critical investments federal and state governments should make in order to create and sustain private-sector jobs, advance the economy, and improve the results of economic development efforts. Highways, you see, are an integral part of can make, the cost of ever-increasing any state’s economic development strat- construction and maintenance impacts egy. The construction and maintenance overall budgeting strategies. of an adequate highway system, better Let’s look at the recent election and connecting the state with a primary net- the new leadership it produced at the work of multi-lane state and interstate state and federal level. highways, supplemented by improved Mid-term voting on November 4, secondary roads, is key to business and 2014, resulted in ten new governors be- industry recruitment, retention and ex- ing elected, half of them from diff erent pansion. Not to mention enhancing our parties than their predecessors. Such, state’s important tourism industry. of course, was the case in Arkansas, as Governor Asa Hutchinson pledged to, The Politics “hit the ground running.” The Gover- Funding for highways, however, is nor’s recent transition, and his steward- sometimes subject to political maneu- ship of the current legislative session verings at the state and federal level. suggest that’s exactly what he is doing. Although investment in highways cre- In addition to state leadership ates what many believe to be the great- changes and the national domination est return on investment a government by Republicans in Congress, a number continued on page 6 AGC Blueprint • 2015.1 of states addressed Arkansas Highway Commission, are to The Gas-Tax Fallacy Ahead in the General Elec- eff ectively accomplish important long- The Blue Ribbon Committee on of the Curve tion surface trans- range planning and fund the multi-billion Highway Finance cited in their 2010 fi nal from page 5 portation needs, as dollar construction and maintenance report that 70% of our highway funding we all realize more needs of our current highway system, comes from motor fuel taxes – a con- and more states then predictability in revenue sources – sumption-based tax. The month-over- will have to pick up the slack from the adequate revenue sources – will have to month fact is state and national motor federal government on adequate high- be achieved both at the state and federal fuel consumption is declining due to 6 way spending. In fact, Congress has not levels. greater fuel effi ciency in cars and trucks, addressed a long-term surface transpor- hybrids, electrics, and volatile fuel prices, tation bill since 2009 (the current con- The Short-Term Fix which reduce overall consumption. (The tinuing resolution provides funding until We in Arkansas may be a bit ahead current reduction in gasoline prices at May 2015). It should be noted, howev- of the curve. As a result of forward think- the pump will not spur additional con- er, that political talking heads and even ing embodied in the Blue Ribbon Com- sumption, as motorists are pocketing some in Congressional leadership have mittee on Highway Finance, voters were the savings, thus increasing their month- recently stated that infrastructure spend- given the opportunity to decide for them- ly discretionary income. Plus, avail- ing is one of a limited number of issues selves whether to invest in our state by able research indicates motorists want on which there can be meaningful com- authorizing additional funding for road American car and truck manufacturers promise between Democrats and Re- and highway construction projects. They to continue improving miles-per-gallon publicans, leading to progress for a long- agreed with the Move Arkansas For- effi ciency.) So, with less consumption term funding plan. Senator John Thune, ward Committee campaigns promoting comes less funding. It’s that simple. Add R-South Dakota, the new chairman of the the fact that available resources simply continuing construction-cost infl ation to Senate Commerce Committee is talking could not sustain what was needed to the mix and, as the Blue Ribbon report pointed out, the problem compounds even further. Although there has been an electoral change in Congress, we simply cannot count on the federal government Why not simply for sustained increases in highway fund- ing. We will have to fund a majority of our increase motor fuel taxes? highway maintenance and construction ourselves. Why not simply increase motor fuel Because increasing the tax taxes? Because increasing the tax on a on a declining revenue source declining revenue source could only ac- celerate the decline, while making the could only accelerate the decline, false choice of further relying on a source of funding that has no prospect of ever while making the false choice again increasing. And the cost of main- taining the roads we have and building of further relying on a source the roads we need is increasing, whether of funding that has no prospect we choose to realize it, or not. The Highway Commission of ever again increasing. The Blue Ribbon Committee pro- posed a number of solutions to Arkan- sas’s systemic fl aw in highway funding. about the need for highway funding, as is improve Arkansas roadways, accelerate Those included identifying and realizing Rep. Tom Cole, R-Oklahoma, a member our economy, and create and support the benefi ts of existing road-user rev- of the powerful House Appropriations private-sector jobs. Although these cam- enues not now being used for highway and Budget Committees. Thune believes paigns, which were co-chaired by Mad- maintenance and construction. These an increase in gas taxes is the answer. ison Murphy of El Dorado, and Former road-cost dollars instead could be used Cole fi rmly states that gas taxes are not AGC Arkansas President Mark Lamberth to directly create jobs, directly improve the answer, and there needs to be new of Batesville, were successful, the vot- the economy, or directly enhancing our sources of revenue, sources that are not er-approved Interstate Rehabilitation opportunities to attract more business, declining, as is gasoline consumption Program, passed in 2011, and the vot- industry and tourism, without increasing and the revenue it produces. Either way, er-approved Connect Arkansas Program, taxes. Other options address applying both are talking about the need. And passed in 2012, were but short-term, the sales tax to the cost rather than the that’s progress. temporary fi xes, doing nothing to solve consumption of motor fuel, and index- If departments of transportation, the long-term road-funding dilemma fac- ing the current motor fuel tax to high- including our own Arkansas Highway ing our state. way construction-cost infl ation, both of and Transportation Department and the continued on page 8 AGC Blueprint • 2015.1 which would be tax The Multiplier Eff ect long-term funding of highways in Arkan- Ahead increases. But it’s not just about funding high- sas. Let’s look at the cost to motorists for of the Curve In a Minute way maintenance and construction. A re- not investing in our highways. from page 6 Order approved cent analysis by the Congressional Bud- Recently, a national, non-profi t or- by members of the get Offi ce found additional investment ganization that researches, evaluates Arkansas Highway in transportation infrastructure among and distributes economic and technical Commission at their September 2014 the most eff ective public policy options data on surface transportation issues meeting, it was clearly stated that, “at for raising across-the-board economic publicized a study on Arkansas. The 8 least $300 million per year in new state output and increasing employment. Call study revealed that, “Roads and bridg- revenue is needed to maintain the status it a multiplier eff ect. In fact, the Federal es that are defi cient, congested or lack quo for highway maintenance, adminis- Highway Administration projects for ev- desirable safety features cost Arkansas tration, operations, pavement and bridge ery $100 million spent in capital highway motorists a total of $2 billion statewide condition, and traffi c levels of service, construction, 2,800 jobs are created or annually due to higher vehicle operating to continue matching Federal-aid high- supported.