New Budget a Boon for Construction in 2016 and 2017?
Newly passed budget deal promises two years of funding including opportunities in the construction industry.
After lengthy negotiations, we now have a new budget providing increased funding for various federal programs for 2016 and 2017. The budget gained Senate approval on October 30 and President Obama signed it on November 2.
Now, the next step is for the appropriators to decide how to divvy up the funding. This will need to be completed by December 11, when the current stopgap spending measure expires. Among other things, the appropriators will be considering how much spending to direct to federal construction projects such as highway infrastructure and public buildings.
According to Jimmy Christianson, director of the federal and heavy construction division of the Associated Contractors of America, the budget deal is a “mixed bag.”
Benefits
Christianson points to the fact that the deal prevents the possibility of another government shutdown for the next two years as a very important benefit. The deal also prevents $80 billion in previously mandated budget sequestration cuts from going into effect, instead actually increasing discretionary spending by $16 billion in 2016 and again in 2017.
For 2016, non-defense spending—including most construction projects—would receive $518.5 billion. The figure for 2017 would be very similar, increasing just 1 percent.
When this spending is appropriated, Christianson expects civil projects such as those undertaken by the Corps of Engineers to be one of the big winners. General Services Administration buildings will get a piece of the pie too, but 2016 construction funding in this area will probably be weaker than in 2015.
Risks
Christianson warns that this budget does not really solve America’s long term need for infrastructure spending. At best it is kicking the can down the road, providing decent funding for infrastructure projects but not tackling all the construction projects that we really need to update our infrastructure.
Another issue is that the budget has once again raised the debt ceiling. Many experts believe that simply increasing the debt ceiling every time the country needs more money for the budget is an unwise and unsustainable practice.
Are You Ready for New Projects in 2016 and 2017?
The New Year will be upon us in just a few short weeks. Will your institution be ready to take advantage of new opportunities? One way to make sure is to upgrade your software to a single entry system such as ECL Software’s Fund Control suite. Our software provides secure online access to allow all your staff to work together efficiently from any corner of the globe, and includes every feature you need to administer your construction accounts.
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