Massive $1.4-Trillion Spending Measure Goes on the Books
President Trump has signed a $1.4-trillion, two-bill spending package that will keep federal agencies, including their construction programs, operating through Sept. 30. 2020, the end of the current fiscal year. The spending picture was mixed for infrastructure accounts: some, like Army Corps of Engineers civil works, received boosts over their 2019 levels, but others, like transit capital grants, were cut.
Appropriators did reject Trump’s proposed deep cuts for the Environmental Protection Agency and the Corps.
Industry officials also see benefits from non-spending provisions attached to the spending titles, including language extending expired tax breaks.
Steve Hall, American Council of Engineering Companies senior vice president for advocacy and external affairs, says, “Overall, we’re pleased with the package.” Besides important programs that had their funding “plussed-up,” Hall points to the collection of tax “extenders” and the reauthorization of the U.S. Export-Import Bank as positive provisions for ACEC members
Trump signed the voluminous legislation on Dec. 20, one day after the Senate approved it. If the measures hadn’t been enacted by Dec. 21, when a current stopgap funding resolution was slated to expire, many agencies would have to shut or dramatically reduce operations.
At the Dept. of Transportation, the picture was mixed among key infrastructure accounts. The highway obligation limit is set at $46.4 billion, up 2% from 2019, and equals the level authorized for 2020 in the 2015 Fixing America’s Surface Transportation Act. Murphie Barrett, Associated General Contractors of America vice president of congressional relations for infrastructure advancement, says, “We’re obviously very pleased to have seen the appropriators honor the final year of the FAST Act’s authorized levels.”
Also on the plus side were DOT’s popular BUILD —formerly TIGER—grants, which received an 11% hike, to $1 billion.
On the other hand, lawmakers sliced discretionary federal highway programs 33% to $2.2 billion. That sum, which draws on the general fund, not the Highway Trust Fund, includes $1.15 billion for bridge reconstruction.
One reason that the discretionary highway line-item is down may be that fiscal 2018 and 2019 appropriations benefited from a pledge in the budget deal for those years to allocate an additional $10 billion per year for infrastructure programs. The budget pact reached earlier this year for 2020 and 2021 didn’t have a specific infrastructure target.
Sean O’Neill, Portland Cement Association senior vice president of government affairs, says, “We’ve enjoyed the increases in the last two fiscal years.” For 2020, he adds, “We’re still getting an additional $2 billion from the general fund for highway funding....It’s still a net positive from where I sit.”
For the Federal Transit Administration, appropriators pared FTA’s overall budget 4%, to $12.9 billion. The big hit came in FTA Capital Investment Grants, which fund new transit starts. That program was trimmed by 22%.
Federal Aviation Administration Airport Improvement Program infrastructure grants’ obligation limit are frozen at $3.35 billion. Lawmakers also continued a separate discretionary airport grants program, but sliced it 20%, to $400 million.
Appropriators boosted core Dept. of Defense construction funds 10%, to $11.3 billion. Lawmakers also provided $1.375 billion for border barriers, the same as in 2019. But they blocked Trump from retroactively “backfilling” funds for military construction projects from which he shifted dollars to the wall earlier this year. The bills do not change other DOD transfer authorities, however.
Lawmakers cut back hard on General Services Administration public buildings construction, providing just $152.4 million for 2020. All of that funding is for a new border port of entry in San Luiz, Ariz. By comparison, GSA construction received $958.9 million in fiscal 2019.
Appropriators did boost GSA buildings repairs and alterations 23% in 2020, to $833.8 million.
The Corps of Engineers civil works program scored a 9% increase, to $7.65 billion, a far cry from the $4.8 billion Trump proposed.
The new spending package’s Corps allocation includes $2.68 billion for the construction account, a 23% hike. John Doyle, special counsel with law and lobbying firm Jones Walker LLP, says, “I think the Corps fared very, very well in the final package.” That wasn’t unexpected, he notes, given that earlier House and Senate “had strong numbers for the Corps.”
Doyle, a former senior Army civil works official, also cites the 21% increase for the Corps’ investigations account. “That’s particularly important with respect to the future of the program,” he says, because it helps certain projects that have completed feasibility studies to get ready to enter the construction stage.
For the EPA, the new legislation provides about $9.1 billion, up $208 million from 2019. Lawmakers rejected Trump's proposed cut of $2.8 billion, or 31%.
Of the $9.1 billion, the EPA's main water infrastructure program gets 3% hike, to $4.25 billion.
Kristina Surfus, National Association of Clean Water Agencies director of legislative affairs, notes that lawmakers didn’t repeat a $300-million infrastructure funding bonus for clean water projects to supplement the mainstay state revolving loan figure.
But she says appropriators essentially added $300 million into this year’s SRF account, resulting in only a small net decrease from 2019.
Surfus also notes the $28 million the measure has for combined sewer overflow grants, which, she says, is the program’s first appropriation. “That’s a significant marker,” she says.
All in all, Surfus says, NACWA was “pretty pleased with how the final package shook out.” [View NACWA analysis of EPA clean water section of spending package here.]
Tax provisions, Ex-Im Bank
The legislation also includes a tax title, including extensions of expired tax breaks. ACEC’s Hall points in particular to an extension through 2020 of the Section 179D deduction for the cost of energy-efficient buildings. “A number of those tax provisions that expired in 2017 were very important in various markets our members operate in.”
Some renewable energy tax incentives were extended, too. But the Solar Energy Industries Association was disappointed that lawmakers didn’t extend the investment tax credit for solar installations.
Hall also notes that U.S. Export-Import Bank’s reauthorization for seven years was “very important to firms working in international markets.” He adds, “Getting that on this train was a huge positive.”