After nearly five years of stable and competitive construction costs, ODOT is rapidly experiencing significant increases in basic commodity prices for items such as aggregate, steel, cement and asphalt. Fueling this rise is the 130 percent increase in diesel prices since FY 2004.
These significant price increases are hurting ODOT’s construction program, as well as the programs of states nationwide. This issue will gain national attention as states and Congress realize the erosion of purchasing power that is negating the gains from the recent SAFETEA-LU bill.
Despite stable revenues, ODOT's construction purchasing power may erode as much as 30 percent by 2010. Any project deferrals will fall disproportionately upon the Jobs and Progress Program because of its large size.
ODOT will not cut many projects in 2006 but may have to defer some large, high profile projects in 2007, 2008, 2009 and 2010. ODOT will need to rebalance its construction program this summer in order to leave a rational multi-year construction program for the next administration. ODOT also will need to inform state and national legislators that higher construction prices are eroding the purchasing power provided by Ohio's recent fuel tax increase and the national transportation bill spending increase.