The aging elevated highway, or viaduct, through Hartford is one of Connecticut's biggest transportation problems. Federal infrastructure funding will go toward studying the problem. Photograph by Mark Mirko | mmirko@courant.com (Mark Mirko/The Hartford Courant)

Inflation threatens to erode the value of billions of dollars committed to build roads, bridges and other public works, forcing Connecticut transportation officials to compress their time horizon when calculating project costs.

Rising costs are particularly worrisome with the state set to receive more than $5 billion over five years from Washington in the federal Infrastructure Investment and Jobs Act. President Joe Biden signed the legislation last November committing more than $1 trillion to the states and other jurisdictions for roads, water projects, railways, airports, broadband internet, electric grids and green-energy projects.

[  $1.25 trillion infrastructure package approved by Congress will fix some of Connecticut’s biggest transportation headaches. Here’s a look at some of the specific projects. ]

“The inability to get specific materials and the rising costs of virtually everything are challenges we must face,” Josh D. Morgan, spokesman for the Connecticut Department of Transportation, said in an emailed statement.

Over the last three years, supply chain problems and inflation have increased costs, he said, without citing specific projects. Items such as electrical equipment, steel, concrete and asphalt can cost 10% to 20% more than a few years ago, he said.

Bids are coming in higher than estimates due to increased costs and lack of supply for particular materials.

To help plan for problems caused by inflation, the Department of Transportation no longer uses a three-year price history when figuring out a project estimate, Morgan said. Officials instead use a price history extending back six to 12 months when calculating estimates to make sure projects move forward as planned and on schedule, he said.

U.S. Sens. Richard Blumenthal and Chris Murphy announced in August 2021 that Connecticut would receive about $5.4 billion over five years.

It includes $3.3 billion for major road projects, $1.3 billion for buses and railroads, $561 million to strengthen bridges and $100 million for extending computer broadband coverage around the state and to low-income families.

This $330 million widening of I-84 in Waterbury was one of the largest public works projects in Connecticut. (Patrick Raycraft / The Hartford Courant)

Blumenthal acknowledged Wednesday “there is certainly a concern about inflation and its impact and the adequacy of investment in infrastructure.” But construction projects have multi-year timelines and may not be threatened by inflation that he’s confident will soon be brought under control by the Federal Reserve as it raises interest rates.

Inflation, which reached 8.6% in May, the highest in more than 40 years, is sapping consumers’ purchasing power at the supermarket, gas pump and at retailers online and at the mall. Rapidly rising prices and the corrosive effect on Americans’ paychecks are putting Democrats on the defensive just four months before elections that will decide whether they keep their slim majorities in the House and Senate or Republicans take over.

The price hikes are driven by several factors, including worldwide supply-chain backlogs, strong consumer and business spending in the U.S. and Russia’s invasion of Ukraine. Critics say federal energy and fiscal policies, particularly government spending, including the infrastructure program, is contributing to inflation.

Ben Johnston, chief operating officer at Kapitus, a New York financing company serving businesses, particularly small businesses in industries such as construction, retail and health care, identified four forms of inflation.

Wages are rising in response to a “very hot labor market” and worker shortages, he said. The cost of goods is rising, prompting businesses and individuals to make bulk purchases and find other strategies, rent and facilities costs are rising and capital costs are climbing as interest rates rise, he said.

“Certainly it’s a very large and substantial amount of capital going into infrastructure,” Johnston said.

“However, as costs rise across the board those dollars won’t be able to go as far given the high and considerable increase in costs for many of the raw materials that are going into construction broadly,” he said.

Construction projects now being identified and assigned in the next few years will be affected “if inflation is not brought under control in the next year or two,” he said.

Joe Toner, executive director of the Connecticut State Building Trades council, said supply chain problems have shaped up as equally important as inflation. But unions have benefited because they can dispatch larger work crews more quickly than nonunion labor to developers and builders shut by COVID19 and supply shortages and looking to quickly resume work, he said.

“We can double down, triple down and push the project out for them,” Toner said.

Stephen Singer can be reached at ssinger@courant.com.