FASTER road to employment: Fees lead to jobs

Source: http://www.bizjournals.com/denver/print-edition/2011/09/23/faster-road-to-employment-fees-lead.html

Cathy Proctor

Reporter - Denver Business Journal

Thousands of jobs have been created — or saved — by the roughly $200 million a year Coloradans are paying in higher vehicle registration fees, according to the head of the Colorado Contractors Association.

Contractors and business owners say the money not only has saved jobs, but also is critical to improving roads and repairing old, decaying bridges around the state.

For every $1 billion spent on infrastructure, 26,000 jobs are created, said Tony Milo, executive director of the Colorado Contractors Association, which represents road and bridge construction companies. FASTER’s nearly $200 million a year in extra money for transportation projects means 5,200 jobs, he said.

“There’s no question that the FASTER money is doing some good,” Milo said. “It’s creating jobs and helping us fix structurally deficient bridges and roadways.”

FASTER is an acronym for Funding Advancement for Surface Transportation and Economic Recovery, and its fees were phased in starting in June 1, 2009. As of July 2011, the new fees raised annual registration costs by an average of $40 per vehicle. Former Gov. Bill Ritter supported FASTER’s creation.

The money — $199.5 million in fiscal 2010, ending on June 30, and $193.1 million for fiscal 2011 — is earmarked for road, bridge and transit improvements around the state. The Colorado Department of Transportation (CDOT) gets 60 percent, counties 22 percent and cities 18 percent.

In December 2010, CDOT issued $300 million in Build America Bonds to accelerate bridge repairs across the state. The bonds will be repaid with FASTER money earmarked for bridge work.

Opponents call it ‘back-door tax’

Republicans in Colorado’s House of Representatives still oppose FASTER as “a back-door tax that wasn’t voted on by the people of Colorado,” said spokesman Owen Loftus.

But Loftus said he doubts FASTER will be attacked in the 2011 legislative session due to the party’s other priorities.

FASTER money has been helpful as the 2008 stimulus money of about $400 million for Colorado road and highway projects has tailed off, Milo said.

“We can show that jobs are being created and the projects are being done,” Milo said. “Eliminating [FASTER] would be harmful to the state’s economy. But we’d be open to eliminating FASTER if we can generate other revenue from somewhere else that’s equal to or greater than FASTER.”

A blue-ribbon commission studied Colorado’s transportation needs in 2008, and said the state needs at least $500 million a year in new money — and up to $1.5 billion a year on the high end — to maintain and expand Colorado’s roads.

FASTER’s new fees are expected to bring in about $265 million a year, starting fiscal 2012.

“As a business person I had to step back and say, ‘Gee, more taxes,’” said James Sewczak (pronounced ‘Sue-zak’), president and owner of Zak Dirt Inc. in Longmont.

“However, my larger goal here in our company is to provide a good, fair wage and benefits to our people. There are times when we have to do what we have to do.”

‘Poor’ bridge getting repaired

In February, Zak Dirt started work on an $8 million project to rebuild the 84th Avenue bridge over Interstate 25. The bridge, built in 1959, was considered in “poor” condition, according to CDOT.

The project will widen the bridge to accommodate sidewalks and a new left turn lane from eastbound 84th to northbound I-25. The bridge should be finished by the end of October 2012.

Sewczak said an average of 25 people, including employees of Zak Dirt and subcontractors, have been working on the project, which he credits to the existence of FASTER money.

“This FASTER money has hit the streets,” he said. “These are good-paying jobs. These are guys making $30-some an hour with full medical and dental benefits.”

Rick Lawrence, president of Lawrence Construction Co. in Douglas County, said FASTER projects — the company has landed three of them — has saved as many as 50 jobs at his company.

“FASTER happened at a critical time for Colorado,” said Lawrence, who is president of the Colorado Contractors Association, which represents road and bridge contractors.

“We were in layoffs and we didn’t have to lay off so many jobs, so many people. The construction industry has been between 10 percent and 20 percent unemployment; without FASTER, I think it would have been at 30 percent. FASTER put a lot of engineers and contractors to work.”

Lawrence said his company averaged 250 employees during the summer of 2008 and currently has 210 on the payroll.

“That’s 42 employees,” he said. “We had to downsize, but without FASTER we would have been at 160 or 170. It really saved our people.”

Colorado has 119 bridges listed in poor condition, considered the “worst of the worst,” CDOT spokeswoman Stacey Stegman said. Of those, 53 bridges are in design for reconstruction or rehabilitation, 18 are under construction and seven are complete, she said.

“We expect that by the end of 2013, we’ll have repaired or replaced 40 to 50 of our worst bridges across the state,” Stegman said.

• Click here for an interactive map of Colorado bridges in need of repair.

 

Cathy Proctor covers energy, the environment, transportation and construction for the Denver Business Journal and writes for the "Earth & Energy" blog. Email: cproctor@bizjournals.com. Phone: 303-803-9233.