How the Midterm Elections Will Impact the Construction Industry

While many of the country's voters are focused on issues like healthcare and job creation during this year's midterm elections, some candidates in the more than 500 House, Senate and gubernatorial races could significantly and directly impact the construction industry if they are elected. In addition to the platforms one might expect — Republicans...

While many of the country's voters are focused on issues like healthcare and job creation during this year's midterm elections, some candidates in the more than 500 House, Senate and gubernatorial races could significantly and directly impact the construction industry if they are elected. 

In addition to the platforms one might expect — Republicans advocating for deregulation and Democrats for a more active government role in the economy, for example — a number of candidates have stances on infrastructure funding, immigration and mega-projects in their districts. Below are the biggest issues this election season involving the construction industry.

Gas Tax

The amount of federal tax on each gallon of gasoline (18.4 cents) and diesel fuel (24.4 cents) hasn't budged since 1993, and this is one reason the Highway Trust Fund, which helps pay for roads, bridges and other surface transportation projects around the country, is almost empty, according to the Congressional Budget Office. Needless to say, this issue is important to the construction industry as these projects are many civil contractors' bread and butter. 

The strategy of raising the federal gas tax to help fund infrastructure projects might have no bigger fan than incumbent Rep. Peter DeFazio (D-Ore.), who is defending his seat against Republican Art Robinson. In March 2017, DeFazio proposed a one-cent-per-year increase in the gas tax and has had some bipartisan support from fellow congressmen including outgoing House Transportation and Infrastructure Committee Chairman Rep. Bill Shuster (R-Pa.).

DeFazio's one-cent proposal, which supposedly would raise about $500 billion for infrastructure projects over 30 years, is very modest compared with the 25-cent increase that the U.S. Chamber of Commerce proposed. President Donald Trump's administration has also floated the idea of a similar increase.

Still, many lawmakers have said they don't want to throw another tax on the working class, a concern DeFazio has dismissed on a few occasions.

“If you don’t increase taxes, we’re not going to have an infrastructure bill, and we’re doing nothing, and we’re just sitting here jawing,” DeFazio said at a news conference, according to The Washington Post. Calling his colleagues who feared losing re-election if they supported such a tax "gutless wonders," DeFazio said no one had lost an election in a state that passed a gas tax increase. In fact, polling has shown that taxpayers don't mind gas tax increases as long as the money is dedicated to infrastructure.

Rep. John Delaney (D-Md.) raised eyebrows this year when he suggested, after President Trump reduced the corporate tax rate from 35% to 21%, that Congress increase the tax again to 23% and use the extra $200 billion to help pay for infrastructure. Delaney is not seeking re-election and has announced he will run for president in 2020.

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