Contractors propose tax credits, policy changes to spur rebound

With construction activity at a near standstill and one in five construction workers out of a job, the Associated General Contractors laid out a blueprint Wednesday aimed at stimulating economic recovery through a series of tax credits, incentives and policy changes.

The investments outlined in the plan are needed to stop the dramatic decline in construction spending and employment being experienced around the nation, AGC Chief Executive Officer Stephen Sandherr said Wednesday in a conference call from Reno.

Reno was the nation's hardest-hit city over the past 12 months, losing 35 percent of its construction work force, highest among 337 cities listed in the Associated General Contractors' August employment report.

Las Vegas ranked 315th with a 23 percent decline. Construction employment dropped to 73,400 in August, a loss of 21,400 jobs from the same month a year ago.

All but 13 cities saw declines in the August report, including four with declines of 30 percent or greater. The areas that did not decline added just 2,800 jobs during the year.

Following Reno were Duluth, Minn. (33 percent decline); Tucson, Ariz. (31 percent decline); and Wenatchee, Wash. (30 percent decline).

While the overall economy is in recession, the construction industry has fallen into depression, Sandherr said.

"The problems facing the construction industry aren't just devastating construction workers, they are crippling our broader economy," he said. "Simply put, you can't fix our economy until you fix the construction industry."

AGC's plan calls for repealing the alternative minimum tax and increasing and extending a series of tax credits and cuts to boost investments in real estate development.

Sandherr said he wants an extension of the $8,000 tax credit for first-time homebuyers and more incentives for renewable energy. Congress needs to restore the "fast-track" trade promotion authority and remove trade barriers to boost demand for new domestic manufacturing and shipping facilities, he said.

He also called for pragmatic new public and private investments in infrastructure that will boost construction while enhancing America's ability to compete globally for decades to come. This includes doubling federal investments in transportation infrastructure, renovating outdated and inefficient federal facilities and investing in clean water, flood control and navigation projects.

The plan seeks to restore the lost purchasing power of transportation user fees, encourage more public-private partnerships, expand the "Build America" bonds program and exempt construction activity from the private activity bond cap.

It also identifies regulatory revisions that will allow construction investments to flow more rapidly and be used more efficiently. These include streamlining environmental reviews, accelerating licensing of new nuclear power plants and establishing a federal multiyear capital budget for public works.

Jack Breslin, owner of Breslin Builders in Las Vegas, said his business has been decimated by the downturn in construction activity, but he's optimistic about 2010.

"There's nothing wrong with putting money back into our country. Back in the Great Depression, that's exactly where they went, putting money in streets and dams," Breslin said. "You're not seeing a lot of private jobs to speak of and I don't think you'll see private jobs until you see a righting of the ship."

Doug Pruitt, chairman and chief executive of Sundt Construction in Tempe, Ariz., said he doesn't see much improvement in 2010, and things could worsen.

"We have serious concerns about 2011," he said. "Even though there's signs of economic recovery, we lag the general recovery. This is one of the primary reasons you need to fund these trust funds and fund them long-term. If they don't, things are just going to move horizontally for the construction industry."

Contact reporter Hubble Smith at or 702-383-0491.


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