Author Archives: Chris Colabella

NJ Gas Tax – Take 2

Another NJ Gas Tax Increase Starts Today.   How Much Revenue Will Be Generated and Where Will That Money Go?

It has been almost two years since then governor Chris Christie increased New Jersey’s gas tax by nearly 23 cents per gallon in an effort to refill the Transportation Trust Fund (TTF) which finances road, bridge and mass transit projects throughout the state. The controversial deal allowed the governor to end his freeze on construction projects. Today the state’s gas tax was automatically increased another 4.3 cents, because the revenue from that 2016 tax increase did not meet projections, therefore construction projects could not go on as needed.

The tax just didn’t have the economic impact proponents said that it would. Even if the $2 billion projected revenue was unrealistic, as many suggest, there was a decline in fuel consumption that would have kept it from meeting even more modest goals. According to an analysis by AAA, after the 2016 tax increase, drivers bought less fuel in NJ. The group also found that gas consumption rose in Pennsylvania and Delaware during the same period. Gas stations near the Delaware border, where the price of gas is now less than NJ, watched as cars passed by, no longer making that once automatic stop to fill the tank  before crossing into another state.

Throw in more fuel efficient cars and the increase in purchase of electric models, and the pump has panned out to be the place to fill the TTF piggy bank after all.

The lower than expected sales contributed to the tax revenue missing the $2 billion projection by nearly $43 million in the 2016 fiscal year and more than $125 million in 2017. In 2018, it will miss projected revenues again. Because of the way that 2016 legislation was written, the automatic 4.3 cent increase per gallon kicked in today to help pay for the state’s $2 billion in transportation projects, some of which are urgently needed.

Taking a look at just one part of the crumbling infrastructure—the state’s bridges—shows the dire need to get projects underway. The American Road and Transportation Builders Association’s (ARTBA) 2017 bridge report shows 8.8 percent of the state’s bridges are “structurally deficient.” That’s 596 bridges (down from 609 a year earlier). The money generated from this gas tax increase will try to address some of those issues.

In June, an agreement was reached on the state’s part of the financing for one of the biggest of those bridge projects—the new Portal Bridge in Kearny will receive $600 million in bonds from the TTF to be repaid over a 30-year term. The Portal Bridge is part of the Gateway Project that includes two new Hudson River tunnels.

The gas tax helped increase funding for smaller, local bridge projects. The Local Bridges, Future Needs program just awarded $47.3 million in grants for county bridges. It was the largest amount of money given toward bridge grants ever, according to the NJ Department of Transportation. The gas tax increase allowed the grants to nearly double, from the $25 million in prior years. Each of New Jersey’s 21 counties will receive at least $1 million through the grants. Money will be used for railing recoating, realignment, and replacement. The biggest award went to Monmouth County, getting $6 million to go toward four bridge reconstruction projects. Union County was granted $2.2 million to replace four bridges, as well.

While revenue from the tax is being used on expansion and new projects, there is debate about the fairness of how the funds are distributed. In South Jersey, for example, complaints site fewer projects in the area. Others have been disappointed that the types of projects receiving the funds do not benefit state contractors, but instead lend themselves to bids from very large, sometimes foreign-owned, companies.

Questions still remain.  Will this new increase further reduce consumption, negatively impacting projects?  Will it be enough to keep the TTF fully funded?

By Chris Colabella and Kara Yorio


NY’s MWBE Program Is Problematic, But What Is the Solution?

The current Minority and Women-Owned Business Enterprise (MWBE) program in New York State isn’t working as it was intended. It has created obstacles and difficulties for both general contractors and MWBEs. Proponents and critics can often agree on that. There is debate, however, about which part of the program is most problematic and to whom.

Are the 30 percent MWBE goals a burden on general contractors who say they can’t find qualified MWBEs to meet the quota and end up forced to hire a company that ends up too small or inexperienced to properly do the work or must file a waiver and delay the process?

Or is it more onerous on women and minority owned businesses who can’t get certification to qualify, saying the process is too difficult and the state needs to provide assistance to businesses trying to apply?

In 2014, Governor Andrew Cuomo increased the goal for using MWBE businesses on state contracts from 20 to 30 percent. That is the highest percentage in the nation. Under that current state law, MWBE goals only apply to state-funded contracts issued by state agencies and authorities. Cuomo pushed for expansion for 2019 that would have expanded the program to local contracts or any funded by the state. It also would have provided annual goals for specific minority groups. But those changes were not in the approved budget. As a matter of fact, the MWBE Article 15 program, scheduled to expire at the end of this year, was only extended for one year, instead of the previously expected five. That has some proponents of the program fearing it might be gone altogether soon.

The N.Y. State Senate is holding hearings “to examine the Minority and Women-Owned Business Enterprises program, and consider potential legislative solutions to create a more effective and efficient program to enhance New York’s business climate.”

People from both side of the issues have attended the hearings and testified to the difficulties with the program and proposed their ideas for a solution. Some suggest adjusting the goals by region, pointing out that demographic disparities from one area to another make a statewide mandate impractical.  Or as one person said at the hearing in Watertown, “Brooklyn and Watertown are not the same.”

Another issue creating problems, according to Crain’s New York Business, is that “unlike the largely white-owned incumbent construction firms, MWBEs are rarely unionized though they must pay prevailing wages on state-subsidized work.”

One area contractor says he doesn’t think MWBEs can find or know where to look for the jobs in many cases. He proposes general contractors find a way to help them know about projects out to bid, even if it costs them a little money to do it. Regular events designed to have GCs meet MWBEs rarely result in working relationships, he says.

The New York State Contract System ( website has a directory of certified businesses. It also has information to help businesses apply for certification, and on trainings and grant opportunities.

As the debate continues and 30 percent statewide goal remains—at least through the 2019 budget—the state senate will continue to listen to the industry’s issues with the program. The remaining hearings are:

September 26 at 2 p.m. Stage 14, Finger Lakes Community College, 3325 Marvin Sands Drive, Canandaigua. For more information, contact Kristin Frank at (518) 455-2366

October 16 at 11 a.m. Senate Hearing Room, 250 Broadway, 19th Floor, New York. For more information, contact Graham Wise at (518) 455-1765 or Anthony Capozzi (607) 773-8771.

Oral testimony is given by invitation only.

By Chris Colabella and Kara Yorio

P3’s Bring Opportunity and Uncertainty

When Governor Phil Murphy signed a bill expanding the opportunities for Private-Public Partnerships (PPP or P3) projects, many expressed great hope that this opportunity—with the private companies assuming the financial risk and long-term maintenance of the project—can be the answer to the state’s infrastructure crisis, as well as a boon for construction jobs.

“We’ve seen many municipalities in New Jersey struggle to repair roads and bridges, build new borough facilities and redevelop their communities,” said Jack Kocsis, CEO of Associated Construction Contractors of New Jersey. “This new law now gives them the means to cost-effectively finance much-needed construction projects.”

With the new legislation, a state or local government agency, as well as school districts, can contract with a private company for a project.

“It could be a local library, highway construction, transit-related, the whole raft of infrastructure,” Murphy said when he signed the bill at The College of New Jersey’s Campus Town development, a project built collaboratively with private-sector partners.

Previously New Jersey only allowed P3s with public colleges and universities.

“Democrats and Republicans alike recognize the tremendous benefits that can arise when public officials and private sector partners work together,” Murphy said. “By doing so, we give state, county, and local officials the much-needed flexibility they need to improve their communities while creating good-paying new jobs – in most cases good, union jobs – while leveraging private capital to invest in public infrastructure.”

At its best, a P3 is a win for all, saving municipalities money, getting vitally needed infrastructure upgrades or important community projects done sooner and creating jobs in the construction industry. But it doesn’t always go so smoothly. Not all projects are eligible for P3s and the contracts are complicated. The results have not always been as hoped either.

At least 30 other states had legislation for use of P3s in widespread projects, but many have run into trouble. In Texas, the private company that operated a toll road went bankrupt forcing the state to step in and assist in financing. In Chicago, a deal required taxpayers to reimburse the private company when parking meters didn’t produce expected revenues.

There have also been concerns about a lack of oversight with everything from potential environmental issues to transparency to ensure fair competition in bidding–would large companies, perhaps from out-of-state come in and do all the work, or could the high risk taken on by the private companies keep some from bidding at all?  Another big concern was labor protections. Most of these issues, however, were addressed during the legislative process and are reflected in the law.

“During the legislative hearings, UTCA (Utility and Transportation Contractors Association of New Jersey) was successful in obtaining important amendments to protect the interests of our industry. The Association has been working with our partners for several years on P3 legislation and thanks to that successful effort, New Jersey has an important new tool for financing infrastructure,” UTCA said in a statement following the bill signing in August.

Kocsis agreed that the key protections are in place.

“In addition, the new law contains strong, time-tested contractor and labor protections ACCNJ has promoted for decades,” he said. “Equally important, this P3 legislation will not replace traditional project delivery, but rather supplement existing procurement and project financing methods.”

It will take time, various projects-and likely some failures-to know how to use P3s most effectively and to the benefit of the public and all parties involved and to decide if the optimism was warranted and this type of partnership is, in fact, the best long-term answer.

By Chris Colabella & Kara Yorio

Solving the Shortage of Workers in Construction

As of July 2018, the construction industry’s unemployment rate in the United States is 3.4 percent, the lowest it has been in at least two decades. Jobs have been multiplying almost too quickly to be filled by qualified workers. These shortages can lead to roadblocks in projects by adding to the expense and length of construction.

Congress and the White House have been making efforts to bring more skilled laborers to the workforce with actions such as reauthorizing the Perkins Act. Also, programs are being brought to high school students and young adults to teach them the necessary skills to begin a career in construction.

To stomp out the labor shortage fire before it catches wind, companies in the industry are taking the initiative by seeking out groups of people to train who otherwise aren’t being utilized to the fullest as a resource in the industry. This means reaching out to groups such as young adults, at-risk-youths, veterans, and women, to bring them the training necessary for a career in construction. Read Brian Gallagher’s article in to learn more.

Proposed Changes Could Knock Down Environmental Roadblocks

The United States Interior Department, on Thursday July 19th, 2018, has proposed changes which will lessen the environmental roadblocks for construction projects to obtain approval. Environmentalists are taking up arms against this motion as the potential changes would leave threatened species with less protection. The Interior Department is clashing the interest of economic development with the fight for environmental conservation.

More specifically, the proposed changes are to the Endangered Species Act of 1973 in an effort to make it easier for construction projects to get approval in areas with a fragile environment. It is also working to remove protections from threatened species as well as make it more difficult to move a species from threatened to endangered status. David Bernhardt, the deputy secretary of the Interior Department, is adamant that the proposals would not gnaw at wildlife protections. This plan is to be finalized after 60 days of public commentary.

Read more at The NYTimes

Mayor de Blasio places the DDC and the SCA in one woman’s hands

Lorraine Grillo, as of Monday July 16th, 2018, is not only NYC’s president of the School Construction Authority (SCA) but also the city’s commissioner of the Department of Design and Construction (DDC). Ms. Grillo has been president of the SCA for 8 years and has an impressive track record to call upon. According to Katie Honan with the Wall Street Journal, Grillo will take over as DDC’s commissioner after years of delayed projects and “cost overruns”.

As the new commissioner, Grillo plans to bring her seemingly successful tactics from the SCA with her to make the fixes necessary to the DDC. Ana Bario, the former commissioner of the Department of Design and Construction, has joined the Department of Environmental Protection in light of Ms. Grillo’s appointment. Hopefully, Grillo is the leader the DDC needs.

See the original NYC Press Release .


Smart City Planning for the 21st Century

Dan Doctoroff, New York City’s former Deputy Mayor for Economic Development and Rebuilding under the Bloomberg administration spoke to Stephen Dubner on Freakonomics Radio about retrofitting old cities in the midst of an historic rise in urbanization and his new venture to build a modern city from scratch.

Listen to the podcast on the Freakonomics website.

Doctoroff also talks about New York City’s bid to host the Olympics and how that spurred development.  He references the High Line Project, Hudson Yards and The Shed, which is expected to open in March of 2019. See CIS Project Details for construction information or visit The Shed website for information on cultural events.

AEMP Releases their Guide for Hiring Veterans.

The Association of Equipment Management Professionals (AEMP), in partnership with the Center for America (CFA), has developed a handbook to help employers in the construction industry more easily connect with qualified veterans and military service members.  The handbook contains skill matrices for high priority categories and individual hiring workbooks for the three hardest to fill job series.

Discover more, plus a link to the full version of the handbook and workbooks, on the AEMP website.

DuPont family heir changing his golf club into a family friendly athletic club.

Ben DuPont and Don Wirth, longtime members of the DuPont Country Club, plan to increase the club’s membership, currently 1,750 members down from 5,000 in 2004, by investing $18 Million in more family friendly facilities.   Plans include construction of a 15,000 sf fitness facility and indoor golf driving range, three all-season swimming pools along with associated site improvements within the 525 acre property.  See project details.

DuPont and Wirth expect their venture to be profitable by catering to today’s families, who look to spend more time together.  One of the options they are considering – reducing the par 3 course from 18 holes to 12. According to WHYY News

Construction is expected to begin this summer and be completed by 2020.