cost escalation, infrastructure funding among issues before legislature

By: ryan sharpe, director of government affairs and communications

It’s hard to believe that it’s been three years since COVID forever changed our world, yet our industry is still feeling its impact, including supply chain issues and cost increases for a variety of materials. UTCA has continued to bring this issue to the attention of our lawmakers who have responded by sponsoring legislation to provide relief to affected contractors.

This article has previously covered the enactment of legislation that created a New Jersey Department of Transportation (DOT) cost escalation reimbursement program as well as a measure that adjusted the dates of that program to cover the time period in which the increases were most severe. That bill making reimbursement available for awarded contracts bid between before December 1, 2021 was signed into law and the DOT re-opened the program a week later.

While we were pleased by these developments, we are concerned that this reimbursement program is limited only to DOT contracts and Small Business Enterprises. As such, we helped develop legislation to create a cost escalation program that is available for additional government projects and is available to all public work contracts.

We are pleased to report that this bill was introduced in March by Senator Vin Gopal (D-Monmouth). UTCA worked closely with the sponsor of the bill, S-377, which allots $25 million to reimburse contractors for material costs that increased by five percent or more on contracts with local, county, state and bistate agencies. The program would be applicable to projects with a value of $25 million or less. We have also received a commitment from a member of the Assembly to sponsor this measure.

Another bill that has been garnering attention is a measure that would allow the use of a larger percentage of Recycled Asphalt or RAP. Under the bill, counties and municipalities receiving state funds for roads would be allowed to use up to 50% of recycled, or reclaimed, asphalt in base and intermediate paving and a maximum of 35% on surface pavement. Currently, the maximum amount of RAP that can be used is 25% for base and intermediate courses and 15% for surface paving.

UTCA is also continuing to advocate for additional funding to be allocated to water and transportation infrastructure projects. We are working with a coalition that is seeking to build on last year’s $300 million appropriation for clean water by aiming to secure $700 million in this fiscal year. Additionally, we are push- ing for the Senate to take up a bill that would allow New Jersey to apply for $10 million in federal FEMA money that would go to resiliency and hazard mitigation projects. This measure has been approved unanimously by the Assembly and awaits a Senate vote.

In addition, we are expecting the introduction of a measure that establishes work zone speed cameras on the state’s roadways. Legislation being drafted would direct fines from violations to the State Police to increase their presence on job sites. Unfortunately, the need for this type of program was recently underscored by a tragic accident in Maryland which took the lives of six highway workers.

Another issue affecting the industry is the release of rules that would implement the components of New Jersey’s so-called “Environmental Justice” law which aims to limit the construction and expansion of pollution generating facilities in “overburdened communities”. UTCA’s engagement with lawmakers on the bill resulted in changes to the legislation that will help ensure vital projects are not unilaterally blocked. We are also preparing comments to seek changes in the proposed rules to mitigate their impact on the industry.

Another significant piece of legislation that was recently enacted will overhaul the state’s campaign finance laws. This new law will impact on political contributions made by our members as well as contributions to and from Constructors for Good Government which is the Political Action Committee (PAC) that supports candidates and issues affecting the UTCA.

For the past few years, so called Super PACs, which often have minimal reporting requirements and often don’t reveal their donors, have proliferated in New Jersey. In order to combat the growing influence of these groups, the Legislature sought to increases transparency and level the playing field for standard candidate accounts which must disclose significantly more information.

The result was a new that law increases most contribution limits, eliminates “local pay-to-play” restrictions, lowers the reportable contribution amount from $300 to $200, and increases disclosure requirements for Super PACs. Members should consult their attorney or UTCA staff for guidance on the new law to ensure their contributions are compliant.

The Legislature has returned from it’s annual “budget break” and is now formulating the state budget based on the spending plan Gov. Murphy proposed in February. After six weeks of hearings, lawmakers will potentially add or subtract from the proposed $53 billion state spending plan that must be passed by July 1. UTCA has been engaging with lawmakers and working with our partners to advocate for the inclusion of critical investment in infrastructure.

The passage of the budget this month is typically the last time the Legislature will meet until after this fall’s elections, in which the Senate and Assembly are both on the ballot. And with 16 members not seeking re-election, the makeup of this body will look very different in January of next year. This will likely impact on what bills are considered and passed in the “lame-duck” period after the election and before the new lawmakers assume office.

As always, there have been recent developments in the political front that could also impact the industry. President Biden has announced he will seek re-election which affects others who were said to have been considering a presidential run, including Governor Murphy and Senator Cory Booker. On the Republican side, former President Donald Trump has announced his candidacy and former New Jersey Governor Chris Christie is also considering a second run for President.

And here in New Jersey, where the election cycle never ends, Jersey City Mayor Steve Fulop has officially announced his campaign to replace the term-limited Phil Murphy while other potential candidates, including former Senate President Steve Sweeney and 2021 Republican candidate, Jack Ciattarelli, are also rumored to be planning runs for Governor.

As always UTCA will be monitoring all of these issues closely and engaging with policymakers to ensure the interests of the infrastructure industry are represented.