Page 63 - 2019 Annual Report
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
           The state’s Department of Transportation (TxDOT) let $8.9 billion in construction projects in fiscal 2019 and has a letting
           budget  of $7.1  billion for fiscal  2020 and $13.6  billion for  fiscal 2021.  In 2019, TxDOT  announced  the 2020 Unified
           Transportation Program, identifying planned investments totaling over $70 billion of infrastructure projects over the next ten
           years. Funding for highway construction comes from dedicated sources, including Propositions 1 and 7, as opposed to the use
           of general funds. Proposition 1, which passed in 2015, takes a portion of the oil and gas severance tax revenues and allocates
           them to the state highway fund. Proposition 7 is funded by state sales and use taxes and motor vehicle sales and rental taxes
           and is used for non-toll roads and certain transportation-related debt. For fiscal 2018 and 2019, these propositions provided
           $1.7 billion and $5.4 billion, respectively, to the state highway fund. Additionally, in November 2019, voters approved 94% of
           ballot measures that will provide an additional $7.8 billion of infrastructure funding. The strength of the Texas economy
           extends beyond infrastructure. In September 2019, Toyota announced a $391 million plant expansion in San Antonio, which,
           coupled with more Toyota supplier companies in the region, is expected to have a $10 billion economic impact on the city
           over the next ten  years. Further,  continued federal regulatory approvals should contribute to increased  heavy building
           materials consumption for the next several years from the  next wave of large energy-sector projects. The Port Arthur
           liquefied natural gas (LNG) project, being developed by Sempra LNG, is anticipated to be a multi-billion-dollar nonresidential
           project that will enable shipments of natural gas to world markets.

           Piedmont Atlantic
           The Piedmont Atlantic megaregion generally follows the Interstate 85/20 corridor, spanning across North Carolina, South
           Carolina, Georgia, Tennessee and Alabama, and includes four primary cities: Raleigh, Charlotte, Atlanta and Birmingham. The
           Piedmont  Atlantic is a fast-growing megaregion; however, it is facing challenges  that accompany a  growing population,
           including increased traffic congestion and inadequate infrastructure.
           North Carolina continues to demonstrate strong employment and population trends, ranking in the top five states for job
           growth  and  population growth.  North Carolina’s population is estimated  to  grow  by two million during the twenty-year
           period ending in 2040. In 2019, Forbes ranked Raleigh and Charlotte as the third and seventh best cities, respectively, for
           business and careers. The state continues to make significant investment in its infrastructure, with a fiscal year 2020 letting
           schedule of $5.2 billion. Additionally, since 2016, transportation referendums totaling nearly $1.5 billion have been approved
           by voters. Further, in November 2019, the state’s governor signed Senate Bill 356 into law, authorizing the issuance of $400
           million in Build NC Bonds for projects that do not qualify for federal funding, and the transfer of $64 million from the general
           reserve to the transportation emergency reserve for use in major disaster expenditures. The state’s 2020-2029 Statewide
           Transportation Improvement Program, or STIP, reflects investment of approximately $23.7 billion for approximately 1,700 projects.
           South Carolina ranked tenth in the nation for growth in single-housing permits for the twelve months ended December 31,
           2019. The state’s infrastructure program should be bolstered by S.1258, also known as Act No. 275, allowing up to $4.2 billion
           to be devoted  to  highway spending over  a  ten-year period. South Carolina’s  ten-year DOT plan includes  1,000  miles of
           upgrades to rural roads and improvements to 140 miles of interstate highways. To fund infrastructure  needs, the state
           passed House Bill 3516 in June 2017, which increased the state’s gas tax $0.02 per gallon per year for six years, the state’s
           first gas tax increase in 30 years. The bill is expected to generate an additional $625 million per year when fully implemented.
           Additionally, in the November 2018 election, voters approved a sales tax increase to generate an additional $120 million for
           transportation funding. The nonresidential market should experience  benefits from the South Carolina Port Authority’s
           capital budget of $2.6 billion through 2022.
           Georgia  ranked  among the  top ten states for employment and population growth.  For all U.S. metropolitan areas with
                                                          th
           populations greater than one million, Atlanta ranked 18   in employment gains for the ten-year period ended November
           2019. Companies continue to relocate  to  or expand their operations  within the state.  In fact,  according to the Georgia
           Department of Economic Development, the state is headquarters for 17 Fortune 500 companies. Recently, Lidl announced it
           will build a regional distribution center, investing $100 million, and Anheuser-Busch announced an $85 million operations
           expansion plan. In January 2016, a comprehensive ten-year infrastructure maintenance plan was announced and represents
           more than $10 billion in investment. Georgia’s Major Mobility Investment Program, announced in 2017 and updated in 2019,
           will invest in 13 highway projects, investing $11 billion over a ten-year period. Additionally, in 2016 and 2018, Georgia voters
           approved six local sales tax increases to provide collectively $4.2 billion for road and transit projects, spanning a five- to 40-
           year period. The Transportation Special-Purpose Local-Option Sales Tax (T-SPLOST) program is starting to provide benefit in
           the southern part of Georgia.







           Celebrating 25 Years as a Public Company                                         Annual Report  ♦  Page 61
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