Report: NJ highway project shutdown could add 10% to construction costs

Dive Brief:

The executive director of the Utility and Transportation Contractors Association said New Jersey Gov. Chris Christie's stop-work order for all state-financed road and bridge construction projects could increase the work's total price tag by 10%, according to NJ.com.
Approximately $247 million worth of construction and maintenance projects shut down last week, and the costs for remobilization could run as high as $24 million due to equipment and materials, according to the industry official. The New Jersey Department of Transportation, however, disputed that claim and said it wasn't "aware of any industry standard for demobilization costs," NJ.com reported.
Gov. Christie ordered all state highway projects closed after state Senate Democrats decided not to support his transportation-funding plan, which would have raised gas taxes in exchange for a lower sales tax rate.

Dive Insight:

Christie wanted to raise the state gas tax by 23 cents and lower the sales tax by 1%, which he said balanced the overall state budget. Democrats, however, said his plan would hurt the state budget.

Earlier this year, the state announced that its $1 billion transportation fund was nearly empty, which prompted state legislators and Christie to try to come up with an alternate funding measure. All parties seemed to agree on an increase to what is now the nation's second-lowest gas tax but reached a stalemate as to where the budget would be cut.

Illinois officials announced last month that all of its state construction projects would shut down as well because lawmakers could not reach a budget agreement. The shutdown was scheduled for July 1, but Gov. Bruce Rauner signed a six-month temporary bill so that all state services, including infrastructure projects, could continue until a final budget agreement could be reached.

Many states are struggling with ways to fund necessary infrastructure repairs and upgrades. In fact, in a May report, the American Society of Civil Engineers found that the U.S. will give up 2.5 million jobs and $4 trillion in gross domestic product over the next 10 years if it can’t figure out how to make up a $1.44 trillion infrastructure funding shortfall. According to the ASCE, the U.S. has only come up with $1.88 trillion of the $3.32 trillion needed. Without full funding, the organization predicted that the infrastructure shortfall will increase to $5.18 trillion by 2040.