Fiscal Year 2013 Looks Rough for Construction Spending
Bills funding federal construction programs for fiscal year 2013 are moving through congressional appropriations committees, and so far, the best that construction companies can hope for are small increases.
As of May 29, the Senate Appropriations Committee had cleared seven of the 12 annual spending bills; the House committee had approved six. One of the six, the bill funding the Commerce and Justice departments, was approved by the full House. In general, Senate appropriators have approved freezes or small hikes in construction accounts; their House counterparts have recommended cuts. Military construction programs could be hit hard. Both the House and Senate committees have approved slicing milcon by about 18% from 2012's level.
The results reflect the two chambers' differing ceilings on total discretionary spending. The Senate is adhering to the $1.047-trillion cap for FY13 that last year's Budget Control Act mandated. It's up from 2012's $1.043 trillion. The House has pared its FY13 discretionary cap to $1.028 trillion. The House's lower ceiling has led to cuts in specific construction and other programs.
Final FY13 spending numbers won't become clear until late this year, probably in a post-election session, but the committee-approved figures give industry officials an initial read on the likely outcomes.
John Doyle, special counsel for Jones Walker LLP, a law and lobbying firm, says that in areas such as energy and water programs, "if I'm a construction company, I can heave a sigh of relief that I've probably been spared any really significant reductions, but I sure as hell am not going to be motivated to throw a big party."
For key transportation programs, the Senate committee's recommendations were "pretty positive," says Jack Basso, American Association of State Highway and Transportation Officials director for program management and finance. He says that, for highways and transit, appropriators are "clearly maintaining the FY12 funding levels, which is good." House appropriators have yet to take up their transportation spending bill.
There has been no House or Senate action yet on bills funding the Environmental Protection Agency and General Services Administration.
