President Donald Trump’s $4.7 trillion fiscal year 2020 budget proposal requests cutbacks to several pools of construction funding across the federal government. Depending on what Congress leaves intact, the plan could mean reduced activity across a number of construction sectors.
With the current plan, the U.S. Army Corps of Engineers, for example, would have to shift its focus toward completing projects already underway, with no funds allocated toward new construction.
The budget requests $4.8 billion for the Corps’ program of public works, a 31% cut from 2019’s $7 billion. Construction funds, specifically, are cut almost in half from this year’s enacted amounts. Out of the 18 projects receiving some money, four projects are funded to completion — the Charleston Harbor dredging, with the largest handout of $138 million, and three dam projects (one in Pennsylvania, one in Washington and one straddling Missouri and Illinois).
But beyond these projects, the Corps would be delegated no funds for implementation of the Water Infrastructure Finance and Innovation (WIFIA) Act loan program, and the Environmental Protection Agency’s funding for such projects would represent a slash of 35%.
The Department of Veterans Affairs’ major and minor construction program would receive $1.6 billion under the proposed plan, a little over half of what it was allocated in fiscal year 2019, but a large project that garners support is the new $900 million VA hospital in Louisville, Kentucky, which is looking at an earmark of $410 million.
Proposed U.S. Department of Defense funding is up 5%, and this includes $9.2 billion in funds for "unspecified construction for emergencies." Included in this category are repairs to facilities affected by Hurricanes Florence and Michael, such as the Marine Corps' Camp Lejeune in North Carolina, which saw roughly $3.6 billion of damage.
But none of these numbers are set in stone, as Congress could reject any or all proposals included in Trump’s request. Some construction accounts may see increases. The Army Corps of Engineers, for example, was allocated more money than what was first proposed each of the last six years, a senior Corps official told Engineering News-Record.
“It is likely that this budget proposal will be treated like most other administration budget proposals — a messaging document that will guide many of the comments and reactions to the president’s agenda, but have little direct impact on the decisions appropriators make,” Brian Turmail, a spokesman for the Associated General Contractors of America, told Construction Dive.
U.S. DOT sees a steep 22% overall decrease in proposed discretionary funding, a move that seems at odds with the president’s goal of making much-needed infrastructure improvements, according to Turmail. Highway spending was slightly lifted by 2% to $46.4 billion.
In a fact sheet accompanying the budget proposal, the White House points to an 11% boost to DOT’s Better Utilizing Investments to Leverage Development (BUILD) grant program for surface transportation projects, as well as the $1 billion it budgets for the next round of Infrastructure for Rebuilding America (INFRA) grants, as part of its commitment to addressing critical infrastructure needs. The budget includes $200 billion in grants and other incentives to this end, the administration said, an amount aimed at stimulating a $1 trillion total investment via private funding and other means.
The Associated Builders and Contractors of America sees in this a “continued commitment to rebuilding roads, bridges and railways across the United States,” Michael Bellaman, president and CEO, told Construction Dive. "Significant investment from both the private and public sectors will be required to not only make these necessary upgrades but to develop a merit-based framework to identify and execute projects based on safety, need and the best value for taxpayers.”
The Federal Aviation Administration’s Airport Improvement Program remains frozen at its 2019 level, roughly $3.4 billion, while the Federal Transit Administration’s Capital Investment Grants (CIG) program is trimmed down 41% to $1.5 billion and is reserved for new transit starts.
The budget carves out $8.6 billion for construction of new and replacement barrier along the U.S.-Mexico border, with $5 billion under the U.S. Department of Homeland Security umbrella and $3.6 billion in undesignated U.S. Department of Defense (DOD) military construction funds.
Military funds are only accessible under the national emergency declaration Trump put forth last month, which has been challenged in several lawsuits. While the administration has so far held off on tapping these funds to avoid an injunction, the Army Corps of Engineers’ ability to deliver on other projects is vulnerable.
“Considering the uncertainty about whether and how much current Corps funds will be tied up in legal disputes … there is a lot to worry about,” Turmail said.