Total federal 2013 construction funding is still likely to be in the $100-billion range. Moreover, if storms strike or other emergencies arise, Congress almost surely will approve large amounts of additional aid for infrastructure repairs.
The trend for non-emergency dollars is troublesome to industry officials, however. Specifics about 2013 appropriations won't start to emerge until House and Senate appropriations leaders set allocations for their subcommittees. But Rogers says, "It's going to be an austere time, no doubt about it."
So far, spending results have varied from program to program, with some programs getting cut more than others. For example, high-speed rail has been hammered. The program received $2.5 billion in 2010 appropriations but was zeroed out in 2011 and 2012. Congress also rescinded $400 million of high-speed rail's 2010 funds.
The General Services Administration's buildings construction account has been another target. Funds were slashed in 2011 to $82 million, from $894 million the year before, and then pared to $50 million for 2012.
Military construction budgets have been strong in the past several years, thanks particularly to billions of dollars from the 2005 Base Realignment and Closure (BRAC) round. But now military construction funding is heading south. The 2005 BRAC round's construction work is nearing its conclusion, and DOD is on an economy drive as it seeks to reduce troop levels. The department's 2013 budget calls for major cuts in "mil con."
DOD officials say the proposed reductions stem mostly from Pentagon-wide belt-tightening and its decision to defer facilities at posts that may be affected by changes in force structure.
Katherine Hammack, assistant Army secretary for installations, energy and environment, testifying on March 7 before a House appropriations subcommittee, said, "We don't want to create excess capacity" that later would not be needed.
DOD has proposed two new BRAC rounds. If enacted, they probably would include environmental cleanup work at bases slated to be shut. But if the Pentagon decides to reduce its overall workforce, new BRAC rounds may not result in the burst of construction that flowed from the 2005 round. That round included many new projects at installations gaining personnel from shuttered bases.
Among other construction areas, the Army Corps of Engineers civil-works program "has fared far better than many, if not most," says John Doyle, special counsel for law and lobbying firm Jones Walker LLP.
Doyle, a former top Army civil-works official, notes that Corps civil-works funding declined 11% in 2011, to $4.9 billion, but "reclaimed some of that lost territory" this year, when Congress approved $5 billion. For 2013, he says, "I think we're going to see roughly a flat-line program, somewhere around $5 billion."
Highways, the largest federally funded construction program, took a $2-billion cut this year but may bounce back in 2013. For one thing, the federal-aid highway account is exempt from the Budget Control Act caps, says Jack Basso, American Association of State Highway and Transportation Officials director of program finance and management. Moreover, the transportation reauthorization bill that the Senate passed on March 14 gives highways a boost, which reflects annual inflation, the measure's backers say.
The highway program faces another threat, however. The Highway Trust Fund, the program's main revenue source for more than a half-century, is projected to dip into the red next fall. In order to keep highway spending at current levels, Basso says, "We've got to come up with a significant amount of cash."
The mixed picture among construction programs is expected to continue for a while, says Robert Murray, vice president of economic affairs for McGraw-Hill Construction, of which ENR is a part. Murray says, "When fiscal 2013 appropriations are eventually passed, about the best that can be expected for transportation would be flat funding, while further reductions are highly likely for environmental programs."
