federal infrastructure

Missouri’s Passage of Gas Tax Increase Allows Fed Infrastructure Match


Passage of the $1.2 trillion Infrastructure Investment and Jobs Act bill, signed into law Nov. 15 by President Joe Biden, is a win for Missouri, says a regional transportation engineer, thanks to the state’s swiftness in passing a gas tax increase to raise enough dollars for the required federal match demanded by the federal spending bill.

Frank Weatherford, principal at TranSystems, credits Missouri lawmakers for passing a gradual gas tax increase – the first in 29 years – to allow the state to generate more than $500 million annually. Without passage of an increase, Missouri Dept. of Transportation officials predicted that the state would face an estimated $745 million annual funding shortfall for roads and bridges.

“We were very fortunate in Missouri that the legislature passed the gas tax increase (from 17 cents per gallon to 29.5 cents per gallon over five years) in order that we could match these new federal funds,” said Weatherford, “otherwise Missouri would have lost out on a four-to-one match. In a matter of weeks, Missouri pulled this off and made it happen. For states like ours where federal dollars are more than 50 percent of the state spend, it’s critical.”

Two subprograms contained in the new federal infrastructure bill, according to Weatherford, did not exist in previous federal transportation bills. They are: 1) A $6.4 billion carbon reduction program to allow for bicycle and pedestrian trails, transit and more, and 2) The PROTECT (Promoting Resilient Operations for Transformative, Efficient and Cost Saving Transportation) program, which channels $7.3 billion formula funding plus $1.4 billion in competitive grand funding to shore up and improve resilience of the transportation network – including highways, public transport, rail, ports and natural barrier infrastructure.

Stephen Sandherr, CEO of the Associated General Contractors of America, said passage of the federal infrastructure bill also provides needed investments to make infrastructure more resilient to extreme weather events.

“Because of the bill’s passage, state and local officials will be able to invest in a more efficient supply chain network and improve roads and bridges to make them safer and more reliable,” Sandherr said.

Missouri AFL-CIO President Jake Hummel agreed, saying the investment will boost the construction, steelmaking and concrete/asphalt production industries.

“This is a shot in the arm to not just the construction industry but also to the manufacturing base in the state of Missouri,” said Hummel.

Moody’s Predicts 3.4 Percent Increase in 2022 Construction Spending


Moody’s Investors Services is projecting a modest increase in overall construction spending for 2022, based in part on anticipated Congressional passage of the proposed federal infrastructure spending bill.

Stable residential construction activity and a recovery in nonresidential construction spending are the factors contributing to Moody’s projected 3.4 percent increase in construction spending during 2022.

Aggregates companies will benefit substantially from passage of a multi-year federal infrastructure spending bill, says Moody’s analysts, with one-half of U.S. aggregates demand coming from public infrastructure projects and the remainder equally split between residential and nonresidential construction. If a scalable federal infrastructure investment bill passes, analysts project aggregates price and volume increasing an additional 2 percent.

Cement and concrete ready-mix producers also stand to benefit from passage of such a bill, according to Moody’s. In 2021, U.S. cement producers are operating at more than 83 percent capacity utilization, limiting their ability to increase supply, with imported product totaling 15 percent.

Lumber will be affected least by passage of an infrastructure spending bill, Moody’s says, as its largest demand drive is residential construction. Steel and copper will fare slightly better since the Biden Administration’s proposed plan includes green initiatives that are highly reliant on metals.