Shutdown: Industry ‘simply can’t afford this fight’

Posted: 3:58 pm Fri, June 24, 2011
By  MARGARET DONAHOE

Margaret Donahoe

Association: Minnesota Transportation Alliance

The thousands of people employed by private sector companies in the transportation construction industry are bracing for a summer of potentially devastating work stoppage that could occur if state government shuts down on July 1.

How many jobs could be affected? We could see more than 28,000 jobs related to highway and bridge construction lost if projects are halted.

In the case of the state budget fight, commuters will be putting up with longer road closures and driving challenges, and they will have to pay some serious dollars for the privilege. For construction projects, the need to demobilize, maintain and protect active projects, have thousands of workers file for unemployment compensation, remobilize and then deal with delays in completing projects, will cost millions of dollars – all at taxpayer expense. Anyone who thinks that a state government shutdown will save taxpayer dollars should think again.

The entire 2011 state highway construction season is at risk – 258 new and ongoing projects worth $900 million. And that is just the work on the state system.

Cities and counties are also looking carefully at road and bridge projects and may be forced to cancel or delay projects because state personnel will not be available to inspect the work and forward federal funds designated for road projects. Local projects with federal funds involved may well be shut down, adding another $150 million to the $900 million worth of projects on the state system.

According to the U.S. Department of Transportation, every $1 billion in investment in highway and bridge construction generates 28,500 jobs. So our state is looking at the potential loss of more than 28,000 jobs as contractors lay off skilled trades people, engineering firms let talented professionals go, cities and counties defer projects, and suppliers of materials such as asphalt, cement, steel and pipes to the transportation industry will be forced to lay off workers and will have to sit on inventory.

The state has a long way to go to recover from the economic downturn, and Minnesota’s construction industry has been hard hit. The construction sector is still more than 60,000 jobs short of its peak in 2006. More than 6,000 construction companies have gone out of business since 2006. While larger companies may be able to continue operating without state payments, smaller companies could go bankrupt under a state government shut down. How is this budget impasse making Minnesota a good place to do business?

With a short construction season in Minnesota, the worst time of the year to disrupt highway construction is between July 1 and Thanksgiving. Some of the potential project delays and disruptions simply can’t be made up this year before the snow flies.

Lawmakers came to St. Paul in January promising to create and expand private sector jobs and get the state economy back on track. After five months of hearings and meetings, the Legislature and governor failed to get a two-year budget for the state enacted and they failed to get a bonding bill passed that would invest dollars in public projects all across the state.

The private construction industry could make a huge difference in improving the state’s economic health or it could become a drain on our economic recovery. It’s time for both sides to end the rhetorical battles and get their work done. Minnesota’s construction industry and Minnesota’s economy simply can’t afford this fight.

Margaret Donahoe is executive director of the Minnesota Transportation Alliance, which includes more than 250 member organizations representing local governments, the transportation industry, labor and advocates for all transportation modes.