AGC to Legislature: Restore funding for public works construction

AGC is supporting legislation to restore funding streams to the Public Works Assistance Account which helps fund hundreds of millions of dollars’ worth of local construction projects. Local governments and special purpose districts are eligible to apply to the Public Works Board (PWB) for low-interest loans to finance the acquisition construction repair replacement or improvement of bridges streets and roads; water systems; storm and sanitary sewage systems; and solid waste facilities including recycling.

The Public Works Assistance Account (also known as the Public Works Trust Fund) provides low-interest loans to cities counties and special districts to help fund large infrastructure projects that the localities may not otherwise be able to afford.  Between 1985 and 2013 the PWAA was used to make loans totaling $2.84 billion for approximately 1975 local government public works projects.

However last year the Legislature not only swiped cash from the account it also re-directed its funding streams to other parts of the state budget until 2019. HB 2244 would restore those funds in 2015.

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In photo AGC’s Butch Brooks left visits with Rep. Derek Stanford who is prime sponsor of HB 2244 after the House Capital Budget Committee hearing.

“AGC understands the need for additional spending for K-12 education as required by the State Supreme Court’s McLeary decision” testified AGC Immediate Past President Butch Brooks (Brooks Construction Management) at a recent House Capital Budget Committee hearing. “But the choice made in the last legislative session to take from public infrastructure projects that promote public health safety and economic growth to fund education is in our view ultimately self-defeating. State investment in basic infrastructure is a strong and necessary foundation for economic growth and ultimately greater state revenues and the Public Works Assistance Account is a vital part of the state’s overall economic-development strategy.”

AGC is also supporting HJR 4215 which would put a constitutional amendment before the voters to prevent any future “swiping” of funds from the PWAA.

Historically the PWAA has received deposits of loan repayments and revenues from the following three taxes: 6.1% of the Real Estate Excise Tax (REET) imposed on the sale of real property; 20% of Public Utility Tax (PUT) revenues from water utilities and 60 percent of the PUT revenues from sewer utilities and 100% of the Solid Waste Collection Tax (SWCT) imposed on garbage utilities.  

These funding streams facilitate the low-interest loans and they are what the Legislature re-routed from the PWAA to other parts of the state budget. It is important to note that HB 2244 and HJR 4215 do not raise taxes; they simply seek to ensure that the taxes already raised are used for their original intent: public works construction.

For more information contact Jerry VanderWood 206.284.0061.