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Michigan gas tax hike stalled; governor says fixing roads still No. 1 issue

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Gov. Gretchen Whitmer says Michigan roads are the worst in the country and are "downright dangerous." (The Trucker file photo)

LANSING, Mich. — With her proposed 45-cents-a-gallon fuel tax hike stalled, Gov. Gretchen Whitmer said Tuesday that fixing the roads is still the “No. 1 issue” despite the Republican-led Legislature prioritizing an overhaul of Michigan’s car insurance law.

“People want our roads fixed. That is the No. 1 issue, and there is crickets at the Capitol right now on that front,” she said after speaking at an infrastructure summit in Lansing. “I put out a real plan to solve it, and that’s what I want to spend my energy focusing on.”

The House and Senate last week approved different bills that would cut the highest auto premiums in the country by letting people opt out of mandatory unlimited medical coverage for crash injuries. Whitmer, who vowed to veto the legislation due to “a lot of shortcomings,” said “there might be a path forward, but it’s too early to tell.”

She made clear, however, that her priority is raising $2.5 billion in tax revenue for roads, as part of a budget plan to also free up money for education by stopping financial “shell games” that have been used to patch potholes.

“Our roads are the worst in the country. They’re downright dangerous. They’re hurting our ability to maintain our edge in the mobility sector and lure investment in the state of Michigan,” said Whitmer, who has been traveling the state to sell her first budget plan.

Her desire to address deteriorating road conditions and GOP legislative leaders’ prioritization of car insurance changes has sparked speculation that they could strike a broader deal — raising gasoline taxes and reducing auto premiums.

Whitmer stopped short of linking the issues, though, saying the budget should be done before lawmakers break for the summer so K-12 districts can set their spending for the next school year.

“These guys have got to get off the dime and get moving on actually fixing the damn roads in the state of Michigan,” she said.

While Republicans are not ruling out a more modest tax increase to boost road construction, they have not outlined a major alternative in the two months since Whitmer proposed the unpopular 45-cent gas tax hike. A plan up for a vote in the Senate on Wednesday would increase road spending by $132 million — well short of what business groups and others say is needed — by accelerating the shift of income tax revenue under 2015 transportation-funding laws.

House Speaker Lee Chatfield, a Levering Republican, does not seem interested in linking road funding with car insurance.

“I’m not sure why I would negotiate one for the other,” he said last week. “I can certainly have two conversations at one time, but I will not trade good policy for bad.”

The House GOP is having ongoing conversations about road funding and how to “deliver the right plan, not the most simple plan,” Chatfield spokesman Gideon D’Assandro said Tuesday.

Amber McCann, spokeswoman for Republican Senate Majority Leader Mike Shirkey of Clarklake, pointed to the Senate’s plans to more quickly transfer general funds to roads and then outline a larger proposal in the summer.

“We’re also focused on delivering cheaper car insurance options and look forward to working with the governor,” she said.

With Whitmer promising to not sign a spending plan unless the road-funding issue is resolved, budget talks appear likely to stretch over the summer months and potentially into the fall. The fiscal year starts October 1.

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The Nation

ATA’s Costello: The biggest problem with 2019 is it had to follow 2018

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Speaking at the annual Arkansas Trucking Association Business Conference, American Trucking Association Chief Economist and Senior Vice President Bob Costello says that fears of an impending recession are premature. The industry is still growing, just not at the breakneck pace of late 2017 and 2018. (The Trucker: KLINT LOWRY)

We’ve all experienced it. You’ve been driving 70 mph for a while. Suddenly, you’re forced to slow down to 45 mph. It feels like you are crawling, even though a part of you knows if you were going this fast on a residential street, you’d feel like you were blazing.

Bob Costello, chief economist and senior vice president of international trade policy and cross-border operations for the American Trucking Associations, has noticed that a lot of people in trucking are having a similar sensation when they look at the economic health of the industry.

Costello was in Little Rock, Arkansas, May 15 for the annual Arkansas Trucking Association Business Conference and Vendor Showcase to give his perspective on the current state of the economy and the industry.

Everywhere he goes these days, Costello told the crowd, everyone keeps asking, “Are we headed to a recession?” After all, things definitely slowing down.

“I don’t believe that, folks,” Costello said flatly. “However, we have to reset our expectations. What I say is, we’re slowing, but we’re still growing. We have some reduced momentum. We are headed back to trend.”

The biggest problem about 2019 is it came after 2018, and 2018 was a hard act to follow.

“The big mistake is to look at year-over-year comps,” Costello said. “Those are not going to be good because 2018 was so good.

“Instead, take a more long-term look at where we were compared to several years ago and what direction we are heading. We may not be skyrocketing like we did for about a year and a half, but we are still moving upward, albeit at a more normal pace.

“Really, we’re in a decent spot. It’s not going to be 2018. But it’s certainly not going to be terrible, either.”

Costello said he wouldn’t expect a recession until 2021, at the earliest. Part of that is because the Federal Reserve has said they were going to put interest rate hikes on pause.

“Economic expansions do not die of old age,” Costello said. “They’re usually murdered.” And the Fed is often the culprit, but this time their restraint has come in time to hold off a recession.

That’s not to say there’s nothing to worry about, he added.  Gross domestic product took an upswing in the first quarter of 2019, Costello said, up 3.2%. That sounds good, until you consider that it was inflated by retailers stockpiling inventories at the time because of the threat of tariffs against China.

“I talk to retailers all the time,” Costello said. “They were bringing in as much stuff as they could.”

The term gets thrown around a lot, but Costello fears the U.S. is getting dangerously close to a genuine trade war with China. With tariffs going up, everything is going to get more expensive, and you don’t have to be an economic whiz to know what that will do to consumer spending.

Costello expects we’ll see consistent growth in the 2% range for the foreseeable future. Not spectacular, “but it’s still growth.”

Consumer sales is one of the key factors to look at that affects trucking. And one of the key factors in assessing the health of the consumer is to look at the job market. Here, the numbers are so good as to be almost inexplicable, Costello said.

For the past year, the American Job market has added an average of 212,000 a month.

“I don’t know where these people are coming from,” Costello said. You can expect an increase of about 60,000 simply from population growth, he said, “anything above that and you’re finding folks from somewhere.”

Some say it’s people returning to the job market from the recession, Costello said, but that was 10 years ago. Could immigration account for some of it? Maybe a little. But wherever they’re coming from, he doesn’t expect it can continue at this pace. The thing to remember, once again, is once it does, it only means it’s getting closer to normal.

The same could be said for the unemployment rate. It’s now at the lowest it’s been since December 1969. “Do you know we now have more job openings than we have unemployed people?” he said. “It’s been that way for almost two years now.”

Of course, when the job market’s good, salaries go up. And when incomes go up, spending goes up.

Another key indicator for trucking is the housing market. With 1.23 million new homes expected to be built, this is one of the less spectacular aspects of the economic picture, Costello said, but sometimes you have to adjust how you look at the numbers. For starters, millennials are not as concerned about home ownership as previous generations. Also, in a lot of desirable areas, there just isn’t any space left to build.

Another area where the industry needs to look at the numbers differently is inventories. Costello said. With the rise in eCommerce and quicker delivery guarantees, more merchandise has to be out there in the supply chain for local delivery, no matter where “local” happens to be.

“This is the change in the supply chain right here, and it has all sorts of ramifications,” Costello said.

Average length of haul for truckload has gone from nearly 800 miles to 507 miles last year, he said. “And what does that mean for driver pay and how we pay them?” The raises companies have given aren’t making up for those lost miles. How will that affect driver retention and the driver shortage?

“Let’s be honest, the driver shortage is an over-the-road for-hire truckload problem, it’s not the entire industry,” Costello said.

So, there are challenges the industry needs to address, but the overall state of the industry and the economy are still strong.

“If I have to summarize, 2018 was the best year ever, post-deregulation,” Costello said.  “I think if you took out last year and historically compared it, we’d be in a lot better mood.”

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The Nation

TCA honors three professional truck drivers as Highway Angels

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From left, Michael Morgan, Peter Lester and Sam Dyess have been named Highway Angels by the Truckload Carriers Association. (Courtesy: TCA)

ALEXANDRIA, Va. —  Peter Lester, Sam Dyess  and Michael Morgan have been named Highway Angels by the Truckload Carriers Association in recognition for heroic action while on duty.

Lester, who lives in Vero Beach, Florida, and is a a professional truck driver for Carroll Fulmer Logistics Corp. of Groveland, Florida, is being recognized for saving a fellow truck driver’s life and thwarting fire at facility.

Dyess, who lives in Killeen, Texas, and is a professional truck driver for Melton Truck Lines of Tulsa, Oklahoma, is being recognized for assisting a couple whose vehicle was pushed into his truck by another truck on a mountain overpass during a blizzard.

Morgan, who lives at San Angelo, Texas, and is a professional truck driver for Melton Truck Lines of Tulsa, Oklahoma, is being recognized for his willingness to assist motorists after they lost control of their SUV on slick roads and veered off the highway

On December 8, 2018, Lester was making an early morning delivery at the Coca Cola facility in Jacksonville, Florida.  There were a few parking spots available out on the road on a residential street, so Lester pulled in there to do some paperwork as he had arrived early to the delivery.  There were two trucks parked there already, and there was just enough room for Lester to back in behind the second truck.  Once he got settled, he noticed a light coming from the front of the first truck and that seemed out of place.  Quickly, he noticed it was not a light, yet a flame, and he then saw smoke coming out from under the front wheels of the truck.

He pulled around and got on the horn to him to try and alert the truck, not knowing if someone was in the cab or not.

“I pulled the airhorn to notify anyone in there and the truck in front of him as well,” he said. “The flames then all broke out and more smoke came rushing out.  I hit the horn again with one hand and called 911 with the other.”.

Lester pulled his truck up to the Coca Cola entrance to alert the guard and facility that there was a fire near the premises, which backs up to a wooded area. By that point luckily the fire department was on their way so Peter knew first responders would be able to take it from there.  Although Lester never saw anyone get out of the trucks, he later found out there were people in both trucks, and saw the second truck pull out to safety.

“I’ve been driving since 1984 and I’ve never seen anything blow up the way this did so quickly,” Lester said. It started out looking like headlights, and then mushroomed in o flames.  I don’t believe the security guard would have noticed, so I am glad I pulled in when I did.”

On Thursday, November 24, 2018, Dyess was just west of Cheyenne, Wyoming, going over the mountains on Interstate 80 with a load on his flatbed headed to Washington state. The day was overcast when he’d left Cheyenne and now it started snowing hard. The temperature was in the low 20s.

“It was really coming down and I couldn’t see the lines in the road,” Dyess said.

He slowed to 30-40 mph. Three to four inches had already accumulated by the time he reached the overpass.

There was another truck up ahead of him and a Jeep Wrangler was traveling between the two trucks. Suddenly, for no apparent reason, the truck in front of the Wrangler stopped in the middle of the interstate and the Wrangler stopped behind him. Dyess had plenty of follow distance and stopped 20-25 feet behind the Wrangler. There was another truck behind him. Dyess checked his mirrors and a moment later saw the first truck rolling backward. “We were on an incline. I don’t know if he missed a gear or was sliding,” he said.

The Wrangler shifted into reverse but could only go so far before being struck by the first truck and pushed into Dyess’s truck. Dyess couldn’t roll back because of the truck behind him. The Wrangler’s spare tire was pushed into Dyess’s front bumper and the force blew out the back window of the Wrangler. “I was laying on the horn to get the other trucker’s attention,” Dyess said. “Then it moved forward and took off, never stopping to check on the Wrangler.” The Wrangler resumed driving as did Dyess. He called the safety manager at Melton to report the incident relaying the information he was able to get off the first truck. He followed the Wrangler to the first exit where they both pulled to the side of the road. Dyess jumped out and went to check on the driver and passenger. “They said they were okay and had called the state troopers but were told it would be at least an hour before a trooper could arrive.” Dyess invited the driver and his wife to sit in his warm truck for nearly two hours while they waited. “We had a great conversation,” Dyess said.

Dyess’s good deed that day didn’t go unnoticed. The couple he helped contacted Melton Chairman and CEO Bob Peterson with a letter describing the incident first-hand. The driver and his wife were traveling home after a holiday weekend spent with family and were grateful for Dyess’s help. “He offered us water and waited patiently with us. We thanked him for his help and then he said something I won’t soon forget: ‘We are the knights of the highway and it’s our duty to make sure everyone is safe.’ He possesses an attitude and professionalism that should make you proud.”

Dyess is humble about his role that day. “I was just doing the right thing; trying to take care of business and maintain integrity,” he said. “Being a professional driver, it’s about more than just getting from Point A to Point B. You also need to take care of everyone around you; that’s my job.”

It was 8 a.m. February 12, and Morgan was on Highway 295 en route to Camden, New Jersey. He was trying to get ahead of a bad storm. It was snowing and sleeting and the roads were starting to get bad. Because of the poor conditions, Morgan was going about 45 mph in the right lane. Suddenly, a Lexus SUV came around on his left and got just far enough in front of Morgan for him to see the vehicle’s license plate before the driver lost control on the slick road and spun out. Morgan had just enough time to apply the brakes, slow the truck, and miss hitting the SUV by inches before it veered off the road and slammed into a tree.

Another truck driver traveling behind Morgan saw what happened and radioed him asking if he was okay and told Morgan he would call emergency services. Morgan pulled his truck to the shoulder and went to check on the SUV. There was extensive damage to the vehicle. The driver’s side had hit the tree. All the windows were broken and the roof was smashed in preventing the doors from being opened. There were two men inside. Although they were badly shaken, they didn’t appear to be injured.

Morgan saw a wedding band on the driver’s hand and started asking him questions about his family to distract him as they waited for state troopers to arrive. “He told me he had an eight-month-old son at home named Michael,” Morgan says with some emotion in his voice. “I have four kids of my own. I would hope that if something like that happened to me someone would stop to help. I was raised in a small community where everyone takes care of everyone,” he says. “You have to have compassion for others. It’s the right thing to do, otherwise we’re not doing what we’re supposed to in life.”

For their willingness to assist others in need, TCA has presented the three drivers with a certificate, patch, lapel pin and truck decals. Their employers have also received a certificate acknowledging their driver as a Highway Angel. Since the program’s inception in August 1997, hundreds of drivers have been recognized as Highway Angels for the exemplary kindness, courtesy, and courage they have displayed while on the job. EpicVue sponsors TCA’s Highway Angel program.

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The Nation

Panel discussion focuses on major infrastructure issues facing the U.S.

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From left, Paul Skoutelas, Linda Bauer Darr, Jim Tymon and Dave Bauer sit for a panel discussion on major infrastructure issues. (Courtesy: AASHTO Journal)

WASHINGTON — A panel discussion last month during a legislative summit sponsored by the American Road & Transportation Builders Association focused on the major infrastructure issues facing the United States, especially in terms of generating more funding for transportation projects.

“The message we’re trying to get out there is that [transportation] not just about building roads like it was 30 years ago. It’s about maintaining what we have, operating it as efficiently as possible, and using all modes as part of a larger mobility network,” said Jim Tymon, executive director of the American Association of State Highway and Transportation Officials (AASHTO).

His remarks and those of others on the panel were printed in the Journal, the official publication of AASHTO.

“Transportation really has an impact on quality of life and it is one of the few areas where we can come together in a bipartisan fashion,” he said.

Tymon also remained “cautiously optimistic” that some sort of infrastructure package will be agreed upon and passed by Congress and President Donald Trump. “Will it be $2 trillion? $1 trillion? We will take what we can get,” he noted. “But any kind of [infrastructure] package will have to address the highway trust fund shortfall and the time window is getting tight to do it. Because, come January 1 next year, everything will be locked down for the 2020 presidential election.”

Like AASHTO’s Tymon, Linda Bauer Darr, president and CEO of the American Council of Engineering Companies, said she remains “optimistic that something is going to happen – the only question is how big that something will be.”

The key sticking point is how to pay for it, she noted.

“[Members of Congress] will not stick their necks out until the president explains how to pay for it. You can’t not have the money. There are lots of infrastructure plans out there – take your pick – but it is where will the money come from that will decide everything.”

Dave Bauer, ARTBA’s president and CEO, agreed with that assessment but with a key twist: “We must embrace the commitment to improve the entire transportation infrastructure network [and] more money is certainly important. But we must clearly articulate what we will achieve with those resources.”

He added that it is “on us to make them understand the benefits” of increased infrastructure investment.

Paul Skoutelas, president and CEO of the American Public Transportation Association, described that view this way: “If you go to the dance, you have to dance.”

He added that “it is an amazing time in the sense that everyone is talking infrastructure, where there is this appetite for action.” To that end, Skoutelas said “we must make sure we are ready to act” when an infrastructure package is unveiled.

“We know things can turn on a dime so we need to be ready, be engaged. Our position is: tell the story about infrastructure. We think the justification speaks for itself but, but we need to remind people about the benefits of it. And our recent survey suggests the American people are ready for greater infrastructure investment, with improved mobility a big reason for it.”

AASHTO’s Tymon said that not only is “data out there showing public support” for more infrastructure funding, there is data showing that legislators won’t suffer repercussions if they support increased funding.

“We need to let them [Congressional members] know there is safety in transportation from a vote standpoint. Many states increased revenue for transportation – over 30 in the last five years – and regardless of whether it was a ‘red’ state [majority Republican] or ‘blue’ state [majority Democrat], no one lost their seat. We need to let them know transportation is a bipartisan issue and that your constituents will support you for raising funding for it.”

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