Builders are pushing Wisconsin governments to stop trying to balance their budgets by putting construction projects on the back burner.
Milwaukee County emerged as an example Tuesday when the Public Policy Forum Inc., Milwaukee, reported the county has a $325.5 million backlog of deferred projects.
â€œGenerally speaking, governments are facing the most severe fiscal challenges that they have faced in a generation or more,â€ said forum President Rob Henken. â€œOne of the items that can be deferred, at least temporarily, is needed repairs to capital assets.â€
Earlier this month, five construction business associations released a study to convince Wisconsinâ€™s state and local elected officials to continue spending money on construction despite the tough budget times, said Mike Fabishak, chief executive of the Associated General Contractors of Greater Milwaukee Inc. He said it hurts builders when governments defer projects.
â€œItâ€™s huge,â€ Fabishak said. â€œWe appreciate that the private construction market has regressed. Therefore, if there are any public market opportunities out there, I think they become all the more paramount.â€
Milwaukee Countyâ€™s project backlog stems, at least partially, from the countyâ€™s 2003 decision to cap capital borrowing at $30 million a year, said Henken, formerly with the Milwaukee County Department of Administrative Services. It was a smart move, he said, considering the county does not have enough operating money to run its programs, and the project debt would only add to the deficit.
County Supervisor Gerry Broderick said he thinks the county should raise the cap. He said the county is considering rebuilding, repairing or renovating the Estabrook Dam. It would cost $12 million to rebuild the dam, he said.
â€œIf we vote to rebuild the dam,â€ Broderick said, â€œjust how the hell are we going to do that and meet our other obligations with a $30 million capital cap?â€
Broderick said it would take more than county money to eliminate the backlog of projects and improve the economy. Furthermore, he said, the county is obligated to maintain its parks and buildings.
â€œI have argued vehemently that we need additional capital to expand,â€ Broderick said, â€œand we need additional revenue to maintain what we have.â€
Henken said itâ€™s a matter of opinion whether county government is obligated to pay for construction projects to keep contractors working.
â€œPart of it is whether philosophically you believe that government public works projects are an appropriate investment as a means of creating jobs,â€ he said, â€œparticularly in a down economy.â€
The AGC of Greater Milwaukee and other contractor organizations argue the projects are appropriate investments, Fabishak said. The associationsâ€™ study, using a $30 million dormitory project as an example, reported every $1 million spent on construction creates 18 jobs paying an average of $44,633 a year and generates $86,040 in state and local taxes. The study was paid for by the AGC of Greater Milwaukee, the Allied Construction Employers Association, the Wisconsin chapter of the American Institute of Architects, the Associated General Contractors of Wisconsin Inc. and the Wisconsin Laborersâ€™-Employersâ€™ Cooperation and Education Trust.
â€œWhen you see the stimulus bill is primarily orientated to infrastructure, it really makes a case for sustaining whatever building programs you have on the books,â€ Fabishak said, â€œnot only from the jobs situation, but in terms of maintaining the infrastructure you have in place.â€