From Deseret News archives:
Some road jobs delayed
State blames competition for workers and high materials cost
Construction costs for Utah roads have risen 17 percent during the past year, according to the Utah Department of Transportation. Combined with increases from last year, the state has absorbed a 37-percent increase in road-construction costs in the past two years.
The long-term growth rate for construction costs is typically around 3 percent annually, according to the Association of General Contractors.
"The last two years have not been that kind," said Jim McMinimee, director of project development for UDOT. "Ultimately, we can't build as many jobs this year. We'll build them, but we'll just have to defer. We will have to wait."
McMinimee presented cost statistics Thursday to lawmakers on the state Legislature's transportation-appropriations subcommittee. Committee members gave no response to his presentation, but UDOT spokesman Nile Easton said that UDOT has "confidence they will find a way to fund needed projects around the state."
The escalating costs have two main causes, according to McMinimee. First, Utah's job market is "very hot," he said. "We're all competing for people in the construction industry."
Second, high oil prices and tighter regulations for sulfur emissions in diesel fuel are forcing refiners to change their business practices. The refiners are skimming about 20 percent more gasoline out of a barrel of crude and leaving less to be used for road asphalt.
The cost of a ton of asphalt has risen this year from about $50 to $70, said McMinimee.
Lane Beattie, president of the Salt Lake Chamber of Commerce, said the rising costs are a reason to fund new roads now instead of in the next several years. By delaying, the state will lose millions because of construction costs, he said.
Beattie gave a presentation Thursday to committee members about a plan that the chamber unveiled last month to help fund new roads and transit in the state. As part of the plan, the chamber wants to increase the sales tax dedicated to transportation by a 1/2 percent in Utah, Davis and Weber counties and 3/4 of a percent in Utah County.
Lawmakers will have to find a way to give $6.7 billion in needed funding to roads this next legislative session — or the state will suffer, he said.
"If you don't solve it this year, you will stifle the economy of Utah, and it will take years to recover," said Beattie, a former Senate president. "You have a bigger challenge ahead of you than I did."
E-mail: nwarburton@desnews.com
