Washington, Minnesota and Kansas pass major construction-focused jobs bills.
Washington state lawmakers have approved an $8.5 billion state transportation budget to fund thousands of construction jobs, including a large injection of federal-stimulus funds for building high-speed train service.
Gov. Chris Gregoire has signed into law an updated $8.5 billion state transportation budget that lawmakers say will bankroll thousands of construction jobs.
The supplemental budget plan signed by Gregoire on Tuesday is about $1 billion more than last year's biennial budget.
The increase comes mostly from federal money that the state will use to pay for large projects, including $590 million to increase the speed of trains on the rail corridor between Oregon and British Columbia.
The transportation budget also has $30 million more for fuel costs, primarily for ferries, and $3 million for storm water treatment.
Cuts in the transportation budget include fewer Department of Transportation management positions, and the continued closure of up to 25 licensing offices.
Minnesota jobs bill a ‘tool in the toolbox’
A “step in the right direction” – or some variation on that theme — is a popular way to describe the newly passed construction jobs bill.
While passage of the bill is likely to energize historic renovations and other building projects in Minnesota, at least some observers say the final version of the measure doesn’t go far enough.
The bill — which passed 112-20 in the House and 58-3 in the Senate on Monday, and is expected to be signed by the governor this week — includes historic renovation tax credits, small-business investment tax credits, greater flexibility in tax increment financing, and other measures designed to jump-start projects.
The bill’s proponents say it could create up to 12,000 new jobs. Specific projects that could benefit from the bill’s passage range from the proposed Mall of America expansion in Bloomington to a reuse for the historic St. Louis County Jail in Duluth.
The Mall of America project could benefit from a provision in the bill that would provide greater tax increment financing flexibility. Also under the bill, qualifying historic rehab projects are eligible for up to 20 percent state tax credit to match a federal credit.
In general, the local construction industry is hailing the passage of the bill as a good start toward helping an industry that has seen unemployment soar to 50 percent in some trades.
“It’s great news,” said Dave Semerad, CEO of the Associated General Contractors of Minnesota. “… This is going to mean a lot to our industry. … It’s another tool in the toolbox for the industry and it will add value.”
Enthusiasm, however, was tempered somewhat by what did not make it into the bill: creation of a state-backed loan guarantee program that would provide gap financing for qualified projects that are struggling to obtain loans.
The Building Jobs Coalition — a collection of contractors, architects, historic preservationists, and business, government and union leaders — called for loan guarantees as a way to “help strong construction projects close the gap in financing.”
Kansas panel endorses $8.2B transportation plan
A proposal for an $8.2 billion transportation program in Kansas cleared a Senate committee Tuesday, signaling that some legislators still hope to underwrite new highway projects despite the state's budget problems.
The bill would increase the state's sales tax and vehicle registration fees and authorize $1.7 billion in bonds to pay for road, rail, airport and public transit projects over the next 10 years.
The Transportation Committee endorsed the measure on a voice vote, forwarding it to the Senate for debate. The timing of that discussion is uncertain, but Senate President Steve Morris, a Hugoton Republican, promised, "We'll run it."
Some legislators question whether they should consider such a bill when the state must close a projected $467 million budget shortfall for the fiscal year beginning July 1. But supporters of a new transportation program contend it will stimulate the economy by creating high-paying construction jobs.
"It gets it on the table for debate," said Transportation Committee Chairman Dwayne Umbarger, a Thayer Republican.
The bill would increase the state's sales tax from 5.3 percent to 5.6 percent, starting Jan. 1, 2013.
Annual vehicle registration fees for motorcycles, cars, vans, and light trucks and farm trucks -- which now range from $11 to $40 -- would increase by $20 by 2014.
Fees for some trucks would increase by $100 by 2014; for the heaviest trucks, the increase would be $135.
The new program would follow a 10-year, $13 billion program that ended last summer. Reader's Digest recently ranked Kansas' 10,000-mile highway system the nation's best, but Gov. Mark Parkinson has said it could deteriorate quickly without a new program.
But even backers of a new program have some misgivings about the Transportation Committee's bill.
Sen. Les Donovan, a Wichita Republican who helped shepherd the 1999 program through the Legislature, said he'd prefer to increase motor fuels taxes instead of the sales tax.
Donovan and other committee members noted that in the past, when the state faced budget problems, it siphoned off sales tax revenues meant for highway projects to education and other general government programs.
Sen. Pat Apple, a Louisburg Republican, said passing tax increases to finance highway projects might send Kansas residents the wrong message, that "everything's normal."
Leaders of the House's Republican majority also are cold to any proposal to raise taxes. They're pushing a proposal to erase the shortfall without higher taxes.
House Appropriations Committee Chairman Kevin Yoder agreed it's in the state's long-term interest to start a new program.
"Probably, this is the wrong time and atmosphere to consider it," said Yoder, an Overland Park Republican.
Still, Senate Majority Leader Derek Schmidt, an Independence Republican, said legislators probably will have to consider a new transportation program as part of any "end game" to resolve larger budget issues.
Sources: The Seattle Times; www.finance-commerce.com; Bloomberg News