No gas tax deal, roadwork shut down … and thousands of jobs in danger
Thousands of jobs could be temporarily lost, and New Jersey taxpayers may face more than $60 million in added costs, due to a pending shutdown of transportation projects caused by the inability of state officials to agree on a new funding plan.
State-funded road, bridge and rail construction is slated to be shuttered as of 11:59 p.m. Friday for at least seven days. The work stoppage could affect around 1,400 contracts, including more than 900 state, county and local road projects and a long list of work and equipment purchases by New Jersey Transit.
That’s expected to lead to layoffs of transportation laborers, engineers and suppliers for construction projects. Shutting down projects and then restarting them can amount to 10 percent of a project’s cost – and with $646 million in road work on the chopping block, that could yield a hefty tab.
“I understand why they’re trying to remain efficient with the spending of what little funds they have left, but there is going to be a significant cost impact to executing the shutdown,” said Anthony Attanasio, executive director for the Utility & Transportation Contractors Association of New Jersey.
Attanasio said contractors will want to secure their equipment and materials.
“There’s actually a cost obviously associated with picking up cranes and other pieces of equipment and transporting them to other sites, whether that’s other job sites, whether that’s back to your main yard,” Attanasio said. “If you’re securing a yard at a site, for a minimum of seven and potentially more days, you may need to have physical presence there to secure that site. You’re not going to leave valuable material and equipment unattended indefinitely.”
Transportation contracts include a provision allowing for projects to be shut down, but the same language in the contract allows contractors to recoup costs if the stoppage had nothing to do with their performance.
“Unfortunately the taxpayer is going to have to bear the burden of the cost,” Attanasio said. “On an industry average, whether it’s a bridge project or regardless of what the project is, there’s an industry average of it costs 10 percent of the contract value to demobilize and remobilize for an active project. So there’s a significant impact to the taxpayer here for doing this.”
Attanasio called that an “unnecessary added cost” that could have been put off because the Transportation Trust Fund won’t actually run out of cash until early August and elected officials are still working on a solution.
“The long-term ramifications for having done so are pretty drastic,” he said.
People in the industry face imminent layoffs or reduced hours, some of which have begun, said Greg Lalevee, business manager for International Union of Operating Engineers Local 825.
“The potential impact is easily hundreds if not into the thousands of jobs that could be lost here until a TTF solution is found,” Lalevee said.
“We think this is going to have a ripple effect outside of just the bulldozer that one sees on the job site. We think it’s going to go further than that,” he said.
Lalevee said ordinary residents will see an impact, even if they don’t directly work in the affected industries. Road resurfacing projects may be stalled midway through, with raised manholes and drain grates left in place while workers are idled, depending on how an ‘orderly shutdown’ is implemented.
“Those are the things I think about when I don’t know the exact context that this is being put out and how it’s going to be interpreted by those people in the field as to what orderly means,” Lalevee said.
“We’ve all been in that situation where we’ve driven through town and swerved out of the way of a raised manhole or hit one – our teeth rattle -- and know we did something to our car, even if it’s not immediately known,” he said. “So sure, I think this could impact the guy on Main Street in more ways than they might know.”
On top of the financial and employment implications is one that’s time-sensitive, Attanasio said: The summer is the best time for doing road work.
“This is prime construction season and weather. You will get no better construction efficiency than beautiful blue sky, sunny day weather that cannot be made up in the fall or especially in the winter. So we’re literally burning days out of the best construction season weather you can ask for,” Attanasio said. “There is no way to make that up. You can’t get days back, obviously, and you can’t get weather back.”
More from New Jersey 101.5: