Economy Watch: Federal Budget Bodes Well for Construction
- Jan 07, 2016
Congress passed and President Obama signed $1.8 trillion in tax and spending bills for fiscal year 2016 (which will end next September). According to an analysis by the Associated General Contractors of America (AGC), the bills will be good for the U.S. construction industry, both through direct federal spending and indirectly by means of tax policy.
The omnibus spending bill provides nearly $121 billion for federal construction accounts, as tracked by AGC. That represents an increase of about $8 billion from FY 2015 but $15 billion less than the administration’s fiscal year 2016 budget request.
Compared to FY ’15 and the sequestration years prior, FY ’16 includes no losers for the major construction agencies. The U.S. Army Corps of Engineers, Naval Facility Engineering Command, Air Force Civil Engineer Center, General Services Administration and Department of Veterans Affairs all see increases in their overall funding levels in FY 2016.
An AGC analysis of the tax provisions signed into law also shows many items that support construction. Among other provisions, that includes an extension and phase-out of wind and solar energy production tax credits, permanent extension of a 15-year write-off period for leasehold and restaurant improvements, and renewal and phase-out of “bonus” depreciation for equipment purchases and the deduction for energy-efficient investments in commercial buildings.