Page 63 - 2019 Annual Report

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