#37 The Maryland Construction Network

by Rob

in Podcast Episodes

MCN Podcast 130x130 BrownEpisode #37 of the Maryland Construction Network

In today’s episode MCN’s host Rob Bertazon talks about the impact the Gas Tax Hike and $1.1 Billion in new school construction and school renovation projects will have upon Maryland’s construction industry.

Based upon Baltimore Sun article written by Michael Dresser  on 4/1/13

Article written touting the benefit of the Gas Tax hike and spending bills from 2013 General Assembly

  1. What is the real effect of these actions on the construction industry?
  2. Gas tax is supposed to benefit transportation construction only
    • While all construction has declined in recession, many subcategories have faired worse than those in road building
    • This means only a very select few companies in the construction industry will benefit from this spending
    • While money is supposed to be for transportation only, lawmakers have left loopholes
  3. Reviews about benefit to economy are mixed
    • Some legislators misinterpret this as a benefit to all aspects of construction and a burden on citizens
    • Administration projects 100,000 jobs created because of gas tax
      • What is that number really?
      • Many will not be new jobs, only the continuation of current employment
    • Economist Anirban Basu claims that gas tax could cost 1,000 jobs and the loss of $124 million in economic activity
      • Potential benefits difficult to predict since money has been diverted in the past
      • School construction should be a direct boost to construction
    • Other economist note that this may drive companies to leave the state
  4. $1 Billion for 15 new schools and many more schools to be renovated
    • This does have more far reaching implications for the construction industry
    • Greater diversity of companies will benefit from this spending
    • Still, no help for residential, small commercial contractors
  5. Al this comes at the expense of the taxpayer
  6. Infrastructure spending is definitely needed but to what extent does increasing taxes and borrowing to spend deter from recovery of general economy.
  7. This does not replace private sector spending
  8. This does not address other badly needed infrastructure improvements such as water, power, etc.

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