With 3 Percent Withholding Tax and Budget Cuts, AGC Encourages Membership to Talk to Legislators

As the prolonged budget battle wrapped up last week, the construction industry still faces legislative hurdles and must remain active to protect its interests. Now is the perfect time for contractors to reach out to their legislators while they spend time in their district offices meeting with constituents. The industry has already seen construction programs taking a disproportionate share of budget cuts in 2011. The industry also faces far more tax uncertainty in 2013 when the 3 percent withholding tax will be implemented. Congress needs to increase efficiency and reduce costs while still delivering the construction projects the country needs. With more than half of the U.S. House of Representatives supporting 3 percent repeal legislation, it is essential for Congress to repeal the tax now. Repeal would give contractors more certainty when making capital purchases, hiring and bid decisions. Finally, it is important to note that the proposed spending caps in the deficit legislation only impact discretionary budget authority and will be felt in all federal construction programs in this category.  Construction programs funded from the Highway Trust Fund and the FAA Airport Improvement Program do not appear to be subject to these caps because these are trust fund programs which are considered a form of mandatory budget authority.  While this does not guarantee that these programs will escape cuts in 2012, multi-year reauthorizations of these programs would give the industry and state departments of transportation the certainty they need to properly invest in the nation’s infrastructure. In preparation for AGC’s annual National Chapter Leadership Meeting in September, AGC will be hosting a webinar for registered members outlining the critical issues and deadlines facing the industry and how to communicate our needs with legislators at the Sept. 13 meeting. For more information on the webinar, please contact Jim Young at (202) 547-0133 or youngj@agc.org.