The year 2005 will go down in history as the year the financial dams broke. After years of stalling on a national transportation funding bill, one was finally passed. And on a per-state basis as well, voters across the country sent a clear message of support for transportation investment during the November elections, despite high gasoline prices. Ballot initiatives that provide new funds for transportation improvements were approved in several states.

According to Analyst Heather Jones with Raleigh, N.C-based FMI corporation, vacancy rates have dipped for commercial real estate with the number of jobs rising in financial and insurance markets. Tourism has been very healthy and should continue to support expansion of the Hospitality segment.

Housing began to soften late in 2005 and will likely remain softer during 2006. Reflecting that softening, luxury home builder Toll Brothers Inc. announced November 9 that it was cutting its sales forecast for fiscal 2006, citing delayed openings for new developments and weakened demand in several markets.

A national housing sector index, a benchmark maintained by the Philadelphia Stock Exchange based on share prices for 21 companies in the U.S. housing construction market, closed down 5.4 percent that same day. The index is down 18 percent from its midsummer peak.

According to Chairman Robert Toll, the drop stemmed from shortage of selling communities, coupled with some softening of demand in a number of markets. "It appears we may be entering a period of more moderate home price increases, more typical of the past decade than the past two years."

Toll Brothers' concentration in the mid-Atlantic region puts it in a tougher climate than other home builders, said Gregg Schoenleber, an analyst with Deutsche Bank North America. Municipalities in the region, concerned about the strain of development on schools and roads, often have more restrictions when approving new developments than places like Colorado and Texas, where such approvals are easier to get, he said.

With the decisive passage of Proposition 2, the Rebuild and Renew New York Transportation Bond Act of 2005, the design, construction and real estate industry and all New Yorkers can look forward to the progress of many important transportation projects funded by the Bond Act and the matching federal funds. The Bond Act was approved by 55 percent of the electorate, with a 10-percentage point margin of victory, paving the way for $2.9 billion in State transportation funds and up to an additional $4 billion in Federal transportation funding.

Notable New York City projects to be supported by the Bond Act are the Second Avenue Subway, East Side Access, and a rail link to JFK Airport as well as core infrastructure needs of the Metropolitan Transportation Authority. The Second Ave. Subway is slated to begin with first segment running from 96th street to 63rd street and connected to the Broadway line. On the JFK rail link job, which is currently pegged at costing $6 billion, funding of at least $727 million cleared the U.S. Senate Finance Committee on November 15.

After a dozen postponements Congress finally passed the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, providing $286.5 billion in guaranteed obligations between 2005 and 2009. Unfortunately Pennsylvania came up short. Receiving the minimum 19-percent annual increase, the state will receive $1.65 billion annually.

However, one place where the Commonwealth will see growth in capital programs is on the Turnpike. After a 43-percent increase in tolls in 2005, the capital program has basically doubled from 2005 to 2006, with lettings projected to reach between $300 million and $400 million.

According to the Alliance for Action, a total of $28.3 billion in public and private construction over the next two years is forecast amid strong warnings that the figures are at risk unless New Jersey renews state funding for transportation and school construction projects. The estimates represented a possible increase of $2.3 billion over the figures from last year's. A recurring theme is the uncertainty of the negative impacts on the economy in a number of key areas that would result if the State Transportation Trust Fund and the Schools Construction Corporation are not refinanced by 2007.

Alliance President Philip K. Beachem warns that the Transportation Trust Fund will be out of money for anything except debts service by June 30, 2006 if the governor and legislature do not act before then on providing new sources of revenue. Beachem also points out that the School Construction Corporation also is running out of funding — a fact that was illustrated when the estimates for school spending for 2006 and 2007 represented a dramatic reduction of $1.2 billion from estimates last year.

Delaware will receive $791 million during the next five years plus $41.4 million toward the replacement of the Indian River Inlet Bridge in Sussex County.