Funding for federal surface transportation programs may run dry in 2015, according to data released this week by the Congress Budget Office that shows the Highway Trust Fund will be unable to support any highway or transit spending, jeopardizing more than $50 billion in annual investment.
The potential loss of almost $36 billion in core annual highway investment alone would take an enormous toll on the equipment industry, Associated Equipment Distributors vice chairman Tim Watters said. Each dollar in highway spending generates 6.4 cents in equipment market activity (sales, rental, and product support) and dealerships average $606,000 in sales per employee. AED estimates the HTF "year zero" scenario will cost the equipment industry $2.3 billion in lost market activity and threaten more than 3,700 dealership jobs.
"For me, those numbers aren't abstract, they're terrifying," Watters, the president and CEO of Hoffman Equipment in Piscataway, N.J., said. "Those are my employees, my coworkers, my colleagues, and my friends, and they could very well find themselves out of work if Congress doesn't get its act together and solve this problem."
Watters was speaking at a press conference organized by Senate Environment & Public Works Committee chairman Barbara Boxer (D-Calif.) to draw attention to the highway funding crisis. Watters said AED would stand with Boxer as she works with her House and Senate colleagues to put the HTF back on solid fiscal footing.
"This isn't a Democratic or Republican issue,” Watters said. “This is a jobs issue. This is a battle for the health of the construction equipment industry and, more broadly, the future of the U.S. economy."
AED's projection of the state-by-state equipment market and jobs impact of looming highway funding cuts is available at http://www.aednet.org/government/pdf-2013/HighwayProgram-20130724.pdf.
AED is a Washington, D.C.-based international trade association representing companies involved in the distribution, rental and support of equipment used in construction, mining, energy, forestry, power generation, agriculture and industrial applications.