Industry Waits for 2020 Funds to Start Flowing
With a massive appropriations package now in place for the rest of fiscal year 2020, engineering firms and contractors can breathe easier as the construction season approaches, knowing how much funding is available through Sept. 30 for important federal infrastructure programs. Now they wait for the dollars to be released.
Jimmy Christianson, Associated General Contractors of America vice president for government relations, says that it can take 60 to 90 days from the date a spending bill is enacted for agencies to learn from the Office of Management and Budget the details of that legislation. The fact that the latest package wasn’t signed into law until Dec. 20, nearly three months into fiscal 2020, may also slow the process down. Still, Christianson expects to see project solicitations using fiscal 2020 funds surfacing “as early as Q2.”
The pace of the funding flow, however, will vary from agency to agency and even from program to program within each agency. At the Dept. of Transportation for example, core federal highway funding, which is distributed to states by formula and financed by the Highway Trust Fund, should be among the first aid to hit the street. That program relies on the overall annual highway obligation limit, which the new spending measure boosted by 2%, to $46 billion.
State DOTs are awaiting a formal notice from the Federal Highway Administration making the funding available from the $46-billion obligation limit. They hope that will happen soon.
Joung Lee, American Association of State Highway and Transportation Officials director of policy and government relations, says that in recent years there has been “at least a few weeks of lag between when the ‘approps’ legislation is enacted versus when the ‘ob lim’ notice goes out from FHWA.” But Lee says one positive development has been that in the past several years appropriations have matched the annual authorizations set in the 2015 Fixing America’s Surface Transportation, or FAST, Act. The 2020 bill also follows the FAST Act template.
Lee says, “So everybody knows what the full-year ob lim amount is. It’s just a matter of getting the official notice from FHWA.” He adds, “We would certainly like to see that as soon as possible, obviously, so that [state DOTs] can start putting the money to work.”
U.S. DOT also has several discretionary grant programs, for which states and localities apply and compete. Those grant dollars will take much longer to get into states’ and localities’ hands than will the formula funds. The longest-lived is the Better Utilizing Investments to Leverage Development, or BUILD, grants, formerly named TIGER grants. DOT’s fiscal 2019 appropriations became law Feb. 15, and DOT announced the 2019 BUILD winners in November, more than a month after fiscal 2019 ended.
Appropriators do like BUILD, which has been routinely oversubscribed since the TIGER days. The lawmakers increased BUILD 11% for 2020, to $1 billion. A newer, larger discretionary highway account, which draws on the general fund, was cut 33%, to $2.2 billion.
Among other winners in the 2020 spending package is the core Dept. of Defense construction program, which received a 10% increase, to $11.3 billion.
Also scoring higher funding is Army Corps of Engineers civil works. Spending will rise 9%, to $7.65 billion. Within that, the Corps construction account did even better, with a 23% increase.
On the minus side is the Federal Transit Administration Capital Investment Grant program, which funds new project starts. It was cut 22%.
The General Services Administration public buildings construction and acquisition account dropped 84%, to $152.4 million. All of that is earmarked for a new border port of entry in San Luiz, Ariz. GSA buildings repairs and alterations, a separate budget account, did see spending climb 23% for 2020, to $833.8 million.
Though Congress missed the Oct. 1 start of the fiscal year, the appropriations picture is significantly brighter for 2020 than in January 2019, when a budget fight between the White House and congressional Democrats caused much of the federal government to close for 35 days. It was the longest such shutdown in U.S. history. Christianson observes, “It’s much nicer to start off the new year with the fiscal year appropriations complete.”