Includes 13 Percent Increase in Federal Construction Accounts
On Feb. 9, President Obama released his $4.1 trillion budget for fiscal year 2017, which proposes $1.215 trillion in discretionary defense and non-defense spending in FY 2017 and $2.565 trillion in mandatory spending. The budget, which stays within the discretionary spending limits set last November in the Bipartisan Budget Act, has been declared dead on arrival by Republican Congressional leaders. For the first time in 41 years, the House and Senate budget committees will not hold hearings with the president’s budget director.
The budget outlines a new 21st Century Clean Transportation Plan that is paid for through a proposed $10.25 fee on a barrel of oil and significant new increases in taxes on businesses including about $650 billion on foreign earned corporate income and a new massive small business tax hike—increasing the top rate on active small business income from 39.6 to 43.4 percent to raise $272 billion for the Federal government’s health care initiatives. The budget also proposes to tax capital gains and dividend income at a top rate of 28 percent. The budget also includes several infrastructure financing provisions that were also included in the last few budget proposals by the administration, including providing for America Fast Forward Bonds; creation of a new category of Qualified Public Infrastructure Bonds; and modifies qualified Private Activity Bonds for public education facilities.
In terms of totality of federal construction accounts that is tracked annually by AGC, the budget provides for over $140 billion for FY 2017 – a 13.35 percent increase from FY 2016 appropriations levels. Most of the increases can be found in the administration’s Clean Transportation Plan, which provided an additional $17.9 billion for various transportation programs (the vast majority of which is directed at initiatives other than highway and bridge improvements) in FY 2017. The budget makes significant cuts to several major construction programs including, military construction, U.S. Army Corps of Engineers’ Civil Works program, VA Major Projects, and Clean Water State Revolving Funds. A full analysis of the FY 2017 budget for federal construction accounts can be found here.
Additional details on funding and tax issues in the President’s Budget can be found here.
For more information, please contact Sean O’Neill at email@example.com or (202) 547-8892.