Construction Impacts of Averted Gov’t Shutdown

What construction contractors should know about the deal to avert a federal government shutdown (again) until 2024.

On November 15, Congress again averted a federal government shutdown by passing a two-tiered, short-term funding extension—a continuing resolution (CR)—for federal agencies into the new year at fiscal year (FY) 2023 levels, including direct federal construction programs. The CR funds the departments of Transportation, Housing and Urban Development, Energy, Veterans Affairs and Agriculture through January 19, while the rest of federal agencies and their programs are funded through February 2.

In addition to funding the federal government, the CR also extends the National Flood Insurance Program authorization to February 2. If this program authorization were to lapse, the Federal Emergency Management Administration (FEMA) would stop selling and renewing policies for millions of properties in communities across the nation. Nationwide, the National Association of Realtors estimates that a lapse might impact approximately 1,300 property sales each day, roughly 40,000 closings per month.

The CR does not, however, further extend the deadline for reauthorizing the Federal Aviation Administration, scheduled to lapse on December 31. If there were a failure to extend this deadline or reauthorize the FAA, there could be negative impacts to Airport Improvement Program (AIP) runway and taxiway construction projects. In addition, the FAA would be unable to collect ticket tax (passenger facility charge) revenues that help fund airport construction. AGC continues to press for FAA reauthorization that is timely and maximizes construction investment, among other things.

As is standard with CRs, no new direct federal projects (projects contracted directly with federal agencies, i.e., not transportation projects contracted through state DOTs) may begin with FY 2024 funds until full year appropriations legislation is passed. That stated, projects using previous years’ funding may begin. Federally assisted projects, including transportation projects contracted through state DOTs, are largely not impacted by the CR, as the Infrastructure Investment and Jobs Act (IIJA) includes advanced appropriations for many construction investment programs.

For more information, please contact Jimmy Christianson at [email protected].

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