CONTACT:
Dennis S. Day: (202) 383-2710
Peter Loughlin: (202) 383-2766

CLINTON SLASHES CONSTRUCTION FUNDING FOR FY 2000, INCREASES ESTATE TAX

Washington, D.C. – President Clinton’s FY 2000 Budget, released earlier today, slashes construction funding and increases the federal estate tax from 55% to 60% for estates over $10 million.

Despite demonstrated public support for public investment in infrastructure, the President’s budget again shows the administration’s bias against infrastructure investment. A recent public opinion poll conducted by Frank Luntz for the Rebuild America Coalition (RAC) found that the American public overwhelmingly supports federal infrastructure investment. (The RAC infrastructure survey results are available on the Rebuild America Website at http://www.rebuildamerica.org/.)

AGC President Peter K.W. Wert said, "The American people understand that quality infrastructure improves the quality of life and they believe additional infrastructure investment is needed. AGC firmly believes that construction advances America."

The Administration’s Budget shows major public physical investment as a percentage of outlays is about where it was last year, but that is 35% below where we were ten years ago. Similarly, as a percentage of GDP, the budget estimate is below last year and about 56% below where it was in 1990.

In major trust fund accounts, the administration again ignores the broad support for infrastructure investment. The budget predicts the balance in the Aviation Trust Fund will increase 130% from $9.1 billion at the beginning of 1999 to $20.9 billion in 2004. The balances in the Abandoned Mine Reclamation Fund is forecast to grow by nearly $1 billion (nearly 60%) from $1.6 billion to $2.5 billion by 2004. Highway trust fund balances will remain at about $30 billion throughout the 1999-2004 period thanks to the funding guarantees included in TEA-21.

President Clinton’s budget adheres to TEA-21’s intent by spending the revenues that come into the Highway Trust Fund. However, the budget proposes that most of the additional $1.5 billion in fuel tax revenues be spent on the President’s favored environmental programs – an additional $341 million for the Congestion Mitigation and Air Quality Improvement Program (CMAQ) and $25 million more for the Community and System Preservation Pilot Program. If this proposal were adopted it would reopen the highway formula debate and/or significantly inhibit state control over their transportation priorities.

The following is the funding provided for federal construction programs and how that funding compares to last year’s allocations:

Highway Program ……………………… $28.35 billion ($1.35 billion more than last year)

Wastewater SRF ……………………….. $800 million ($550 million less than last year)

Drinking Water SRF ………….………... $825 million ($50 million more than last year)

Army Corps Gen. Construction ………... $1.240 million ($190 million less than last year)

Army Corps Oper. and Maintenance …... $1.836 million ($183 million more than last year)

Flood Control on Mississippi River…….. $280 million ($41 million less than last year)
& Tributaries

HUD Community Development Grants… $4.725 billion ($25 million less than last year)

HOME Investment ……………………... $1.585 billion ($15 million less than last year)

Veterans’ Affairs, Major Construction …. $60 million ($82 million less than last year)

Federal Prison Construction ……………. $559 million ($148 million more than last year)

GSA General Construction …………….. $102 million ($390 million less than last year)

GSA Repairs and Alterations …………... $665 million ($3 million less than last year)

Acquisition & Maintenance of U.S ……… $484 million ($80 million more than last year)
Missions

Abandoned Mine Land Reclamation …… $211 million ($26 million more than last year)
Fund

Export-Import Bank ……………………. $839 million ($74 million more than last year)

Excluding highway spending, which is established in TEA-21, funding for the above construction programs is down $835 million from last year.

The President’s budget proposes the implementation of the Harbor Services Fund as a replacement for the Harbor Maintenance Tax, which the U.S. Supreme Court found unconstitutional in March 1998. Under the proposal, commercial vessel operators would be charged a fee for use of federal port channels and the fee would be deposited into the Harbor Services Fund. The revenue from the fund would support the operations and maintenance activities of the Corps of Engineers and the other O&M costs currently recovered from the existing Harbor Maintenance Trust Fund. The revenue should also fund the federal share of the Corps’ port construction activities, such as port deepening projects.

The Associated General Contractors of America is the nation’s largest and oldest construction trade association, founded in 1918. AGC represents more than 33,000 firms, including 7,500 of America’s leading general contractors, and 12,000 specialty-contracting firms. Over 14,000 service providers and suppliers are also associated with AGC, through a nationwide network of chapters.

http://www.agc.org/   dayd@agc.org

Back to 1999 Press Releases