AED analysis: Federal highway program puts $2.4 billion in equipment market activity at risk

AED analysis: Federal highway program puts $2.4 billion in equipment market activity at risk

A new analysis by Associated Equipment Distributors’s (AED) Government Affairs Office based on recent data from the Federal Highway Administration shows the potentially devastating economic impact of the impending collapse of the federal highway program.

The Congressional Budget Office reported in July 2013 that, due to inadequate resources in the federal Highway Trust Fund (HTF), Congress “would need to reduce the authority to obligate funds in 2015 to zero in both the highway and transit accounts.” This “Year Zero” scenario will put an entire year’s worth of federal highway and transit investment at risk, create enormous uncertainty for transportation planners and send economic shockwaves through the construction industry, according to the AED.

AED’s state-by-state projection based on Federal Highway Administration apportionment data released late last year estimates the HTF Year Zero would jeopardize at least $2.4 billion in equipment market activity (i.e., dealer sales, rental, and product support revenue) and close to four thousand equipment dealership jobs.

“Congress’s inattention to the imminent collapse of the federal highway program is reckless, irresponsible, and wholly unacceptable,” AED President and Chief Executive Officer Brian McGuire said. “By waiting to act, lawmakers are playing a high-risk game of chicken with state transportation programs and construction industry jobs.”

Restoring the near- and long-term solvency of the HTF is AED’s top legislative priority for 2014. The association strongly supports new user fees – including an immediate gas tax increase – to put the HTF back on solid fiscal footing.

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