Highway and Water Funding Cut in FY 2012

Congressional appropriators slashed investment levels for both highway and water infrastructure projects in appropriations bills passed in the closing days of the first session of the 112th Congress.  These cuts will further impede a drastically underfunded and outdated infrastructure system.

The “Minibus” appropriations bill (H.R. 2112), signed into law in November 2011, designated $39.144 billion to federal highway programs through the highway trust fund.  AED estimates, the five percent drop in funding from the $41.107 billion allotted to similar projects in 2011 equates to more than $125 million in lost equipment market opportunity for fiscal year 2012.

Water infrastructure programs similarly fell victim to lawmaker’s spending aversions.  The Clean Water and Drinking Water State Revolving Funds both took hits in the Omnibus Appropriations Bill (H.R. 2055) passed shortly before the 112th Congress ended its first session.

The bill directed several reductions at the Environmental Protection Agency (EPA), cutting $101 million from the State Revolving Fund (SRF) budgets.  With roughly 12 percent of water utility bids attributable to the purchase, rental, and leasing of construction equipment, and to the cost of dealer-performed equipment repairs, the reduction in investment could cost the equipment industry $12 million in lost market opportunity.

The Clean Water SRF, used by states for water quality protection and wastewater infrastructure projects, was allotted $1.469 billion in 2012, a cut of more than $50 million.  The Drinking Water SRF, which provides states the resources for potable water infrastructure projects, will receive $919 million in 2012—$44 million less than in 2011.
 
However, the budget for the Army Corps of Engineers was the one bright spot among infrastructure investments, receiving a slight uptick in 2012 funding levels.  The Disaster Relief Appropriations Act of 2012 (H.R. 3672) and the “Omnibus” 2012 Appropriations bill (H.R. 2055 & H.R. 3671) provided $5 billion to the Corps, which oversees large civil and water projects—a $145 million increase from 2011 investments.

Article Date: 2012-01-09
Source: Associated Equipment Distributors