Rebuilding our roads, schools and other infrastructure projects are at the heart of the $787 billion federal economic stimulus plan signed this week by President Barack Obama. Why? Because for every $1 billion the federal government commits to infrastructure helps to support some 35,000 jobs.
Now, let’s shift to California’s economic crisis. Here, too, infrastructure projects are at the core of the economic stimulus plan currently being debated as part of the state’s budget process because the Governor and Legislative leaders also recognize that infrastructure projects create jobs. In fact, California has literally built its way out of previous recessions, and it will provide that path to economic recovery this time, too.
But over the course of the past 18 months the construction industry has been one of the hardest hit by the collapse of the housing market, the economic decline and rising unemployment. At the same time, lawmakers and regulators have levied several costly regulations on our industry including the portable equipment rule, off-road construction equipment rule and on-road truck rule. Through each public rulemaking process we have consistently stated our support for these clean air regulations and have offered our input to make the regulations work better for our industry to achieve the highest level of compliance.
The economic environment is indisputably different now than it was when the off-road diesel equipment rule was initially drafted in 2006. Today, the facts paint a pretty grim picture: construction activity is down 40 percent from July 2006; Operating Engineers’ hours, the workers on the jobs, are down 38 percent; Construction diesel fuel consumption is down 41 percent; Construction revenues are down 28 percent; Construction employment is down 20 percent and dropping fast.
But, ironically, the economic bust has created something of an environmental boon in air quality. California has already achieved a 40 percent reduction in emissions from construction activity over the last two years. That’s almost half way to the goal set by the California Air Resources Board’s (CARB) off-road diesel emission regulation that called for an 85 percent reduction in emissions by 2020.
That’s where the provision in the budget comes in. By providing contractors some credit for these early reductions, the industry can better survive the recession and help get California’s economy moving. Without some relief, the industry will be required to spend $1 billion dollars this year alone – money it does not have and does not have the ability to borrow – to buy equipment to comply with the regulation over the next 13 months. All of that to achieve an air emission goal we have already met.
This isn’t special treatment. There are no rollbacks or weakening of any environmental regulations. All original deadlines and goals remain in place. All we want is a receipt for the massive down payment we have already made toward clean air.
Governor Schwarzenegger has consistently called for a balance between the environmental and economic needs of our state. By providing greater flexibility to contractors who have already reduced their fleet emissions but are struggling to stay in business to comply with the regulations, the Governor and our Legislative Leaders are striking that balance and helping the state’s economy by keeping our workers on the job and rebuilding California’s infrastructure.