Rough road
Steve McGough, the new chairman of the American Road & Transportation Builders Association, is out to save highway and transit infrastructure
Steve McGough, president and chief financial officer of HCSS, a Sugar Landbased software company that serves the heavy civil construction industry, was just named chairman of the American Road & Transportation Builders Association.
The national trade group, headquartered in Washington, D.C., advocates for transportation infrastructure, and in conversation with Texas Inc., McGough drove home the idea that federal transportation policy decisions have major impacts on the private sector and state transportation departments. Uncertainty about future federal funding levels could cause states to continue delaying new highway/transit improvements and businesses to hold off on hiring and making new capital investments.
McGough, 56, who has been in the construction industry for 35 years and with HCSS since 2005, previously worked at consulting engineering firm Turner Collie and Braden, now part of AECOM.
Q: What is the most important focus for the construction industry in terms of working with government agencies and moving the construction industry forward?
A: Three words: funding, funding, funding. The federal Highway Trust Fund is the source, on average, of 50 percent of the highway and bridge capital improvements made by state transportation departments annually. In Texas, it’s 35 percent. The trust fund is in the financial hurt locker. Absent new revenue, starting in 2021, states could face a 40 percent cut in investment. State and local officials and the construction industry should continue working together to keep pressure on Congress and the Trump administration to agree on a permanent HTF solution. All revenue options should be on the table.
Q: Why is addressing the need to rebuild infrastructure, which crosses party lines, so hard to get done?
A: The current political environment in Washington makes any policy achievement difficult. That said, President (Donald) Trump and elected leaders from both parties in the U.S. Senate and House of Representatives have repeatedly said infrastructure investment remains an area for common ground. A 21-tonothing vote in the Senate Environment and Public Works Committee approving a five-year highway bill in late July was a major bipartisan achievement. Now it’s a matter of getting the full Senate to take it up. If we can get the bill out of the Senate, it should significantly increase pressure on the House to act.
Q: What role does ARTBA play?
A: ARTBA is a large, nonpartisan federation whose primary goal is to grow and protect transportation infrastructure investment that will meet public and business needs for safe and efficient travel. It’s been around since 1902. We have over 6,500 member firms.
Q: And what is it doing to get the pending legislation moving?
A: With a highway bill introduced in the Senate, it’s playoff season for ARTBA and its public and private sector members. ARTBA’s government affairs team maintains a continual presence on Capitol Hill. Our members are meeting with their representatives and senators in D.C. and back home to explain the importance of the bill to the economy, road safety and job creation. A 27-member ARTBA task force completed work earlier this year on a comprehensive 32-page policy report with recommendations for the next
highway/transit bill. We’ve met with nearly 100 House and Senate offices and transportation committee staff to share our legislative blueprint. We’ll keep pushing Congress and the Trump administration to pass a robustly funded infrastructure bill.
Q: Have you been personally involved in the effort?
A: I met with last year with Secretary of Transportation Elaine Chao and relayed the same thing to her — that, look, if you’re going to get an infrastructure package done, you need to do it now. We will start seeing states pulling projects back, and they start a good six months out — that’s not conducive to economic growth.
Q: Was she responsive?
A: Yes, Secretary Chao gets the issue. I think the administration, and both Republicans and Democrats, get the issue. It’s time they come together and put the petty stuff aside and do something that moves this country forward. Right now, if I was running for re-election, I would be petrified, no matter what side of the aisle, because there hasn’t been anything substantial, in my mind, that has come out of Congress. They ran on a platform and said they would address infrastructure, so let’s do it. You can tell I’m a little passionate about it but I think rightfully so, it’s good for the nation.
Q: Are you optimistic?
A: We’re going into an election year, so now is the time. We hope this keeps moving forward. ARTBA is doing outreach to gain support for the passage of the Americas Transportation Infrastructure Act. It’s going to require some new user fees, but we have to fix the HTF. Revenue mechanisms that have been in place won’t work.
Q: To what extent does Texas rely on federal funds?
A: Texas is receiving over $3.8 billion in federal funds this fiscal year. Federal funds provide on average about 35 percent of the funds that the Texas DOT uses for its capital outlay of projects.
Here’s the sadness of it — we’ve been living off our grandparents’ investment in the infrastructure from the highway system and have nothing on our end to move forward. Collapsing bridges get people’s attention, and we fix those, but there’s no real appetite to get our system in shape.
Q: What is the most pressing thing that need to get done in Texas?
A: The most pressing thing in Texas is fixing the HTF. Texas, and any state DOT, needs to be certain of their revenue sources. A multiyear surface transportation bill gives state DOTs certainty for funding for three to five years. So the biggest thing for Texas, and other states, is to get a multiyear bill for transportation spending.
Q: What do you think is the biggest challenge facing the construction industry today?
A: It’s our workforce, or really lack thereof. The total U.S. workforce is over 130 million now, and the construction workforce is over 10 million. So how we can have a workforce shortage? It’s because we have an available workforce but not a qualified workforce. According to industry surveys, the percentage of firms having trouble finding craft workers in 2017 was up to 70 percent. By 2018, it was over 80 percent. And we saw the same thing in 2019.
The problem isn’t limited to field workers. In a USA Today study, the fastest growing construction jobs, based on job postings from 2014 to 2017, were chief estimator, up over 100 percent; superintendent, up 122 percent; pre-construction manager, up 126 percent; and commercial project manager, up 277 percent.
We need to work with the talent pool we have because it can’t expand fast enough to keep up with demand. This is by far our industry’s biggest challenge.
Q: Why is finding qualified workers such a challenge?
A: A lot has to do with perception. Most people don’t look to construction as a career. They think of construction as hardhats, boots and shovels. But that’s far from the truth. Some of the smartest people I know came out of construction — they’re great problem solvers and very dedicated people. We need to educate parents and kids so they know there are greatpaying jobs and rewarding careers in construction.
Q: Are you addressing this problem?
A: At HCSS, we have a program called I Build America, which has been around for about five years. We hope it develops a life of its own. It focuses on instilling a sense of pride in people who work in construction, educating the public about how construction gives us our modern way of life and showing the next generation that there are rewarding, meaningful careers in construction.
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Q: How does HCSS fit into the wider picture?
A: We have customers in all 50 states, and we have a good feel, firsthand, of how uncertainty affects contractors. When state DOTs pull projects, contractors become uncertain about whether they will have work or not. They usually hold close to the vest. They do not hire people they probably should be hiring. They do not purchase equipment they probably should be purchasing.