Dredging & Marine Construction

President’s FY2020 Budget Proposes Major Cuts to Corps Funding, While Aiming to Complete Projects

On March 12, the U.S. Army Corps of Engineers released the president’s Fiscal Year 2020 budget. Assistant Secretary of the Army Rickey D. (R. D.) James, Lieutenant General Todd T. Semonite, commanding general of the Corps and chief of engineers, and Major General Scott Spellmon, Corps deputy commanding general for civil and emergency operations, held a press conference to outline the budget line items, provide some context for project decisions and answer questions from the press and others in the audience.

The proposed gross discretionary funding for the Corps Civil Work program was proposed at $4.827 billion. New federal funding in the proposed budget includes $3.753 billion from the General Fund of the Treasury, $965 million from the Harbor Maintenance Trust Fund (HMTF), $56 million from the Inland Waterways Trust Fund (IWTF), and an estimated $54 million from Special Recreation User Fees.


Budgeting Priorities

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Secretary James outlined the main budget numbers and some of the justification for budget priorities. Of the $2.038 billion proposed for operation and maintenance (O&M) of inland and coastal navigation projects, Sec. James said, “The budget gives priority to coastal harbors and inland projects with the most commercial traffic.”

The O&M budget, Sec. James said, focuses on the performance of existing projects. “The allocation of funding for the maintenance of projects reflects a risk informed approach,” he said.

The FY 2020 construction program funds Corps projects at $1.3 billion for nine commercial navigation projects, five ecosystem restoration projects and four flood risk management projects. “The construction program uses objective, performance-based guidelines to allocate funding toward the highest performing investments,” Sec. James said.

Four projects in the FY2020 budget are funded to completion and the budget includes no new starts.

“The budget reflects a program that number one is dedicated to completing projects rather than recognizing projects that are in the cue that can’t be completed in one fiscal year. That’s what we’re trying to do,” Sec. James said.


Local Sponsors

In his opening statement, James spoke a lot about local community involvement in projects and non-federal sponsors. “The budget supports a Corps program that has a diverse set of tools and approaches for working with local communities, whether this means funding projects with cost-share partners, or having planning and technical expertise to have communities make better informed decisions,” Sec. James said.

He specifically addressed Section 1043 from the Water Resources Reform and Development Act of 2014, which called for establishing a pilot program to evaluate the cost-effectiveness and project delivery efficiency of allowing non-federal sponsors to carry out feasibility studies for flood risk management, hurricane and storm damage reduction, aquatic ecosystem restoration and coastal harbor and channel and inland navigation. As outlined by the legislation, the program hoped to identify project delivery and cost-saving alternatives to the existing feasibility study process – evaluating the non-federal sponsorship of studies and decentralization of the project planning, management and operational decision-making process of the Corps.

The FY2020 budget proposal includes $150 million for the Section 1043 pilot program. “The Corps would transfer this funding to non-federal sponsors who wanted to construct projects on their own, under Section 1043, WRRDA 2014, as amended,” Sec.  James said. These funds would be used in conjunction with funds provided by non-federal interests. The budget also proposes extending the authorization of this program, which is set to expire June 10, 2019. That measure would also require Congressional authorization.


The Challenges

In his opening statement, Lt. Gen. Semonite highlighted many of the challenges facing the Corps. Last year, Hurricane Michael and Florence required emergency action by the Corps. “Our teams were deployed and did an amazing job of providing support,” Semonite said.

He also said the nation’s water resources projects needed to be more efficient and effective, “which will require forward and innovative thinking.” Semonite continued, “In other words, at the Corps we want to revolutionize how we do business.” This includes modernizing the process with better tools and policies and seizing opportunities to meet engineering challenges, he said.

Gen. Spellmon provided more detail about specific project funding, but before listing amounts, he reflected on the “realities of the nation’s current fiscal path and the tough decisions that have to be made to put the nation on a fiscally prudent path.”

During the question and answer period, it was noted that the proposed FY2020 budget represents a 30 percent cut in Corps funding from what Congress appropriated in FY2019. Gen. Semonite explained that the president’s budget represents the baseline needed to run basic functions of the Corps and some ongoing projects. “There are certain things that we got last year that we were able to put toward some projects that had been started several years ago,” Gen. Semonite said. “We worked this budget very hard, and our work is not done. If funds are available, we’ll make a recommendation on where those funds should go.”

The discussion also addressed proposals to revamp the Civil Works program and funding; the administration has floated a proposal to remove Civil Works from the Corps and put it with the Department of Transportation (DOT).

Sec. James said the proposal to move Civil Works or fund the program similar to how DOT is funded was “worth discussing.” He did warn, however, the current proposal included separating the navigation and flood control missions – putting one in one agency and the other in another agency. “You cannot separate flood control and navigation and be successful, “ Sec. James said. “It cannot be done.”

Gen. Semonite returned the discussion to the current funding system and why it needs to change. “There’s not enough money in the federal government to be able to meet the requirements we have. All of us have to be innovative on how to resource things,” he said. Transforming project financing and budgeting is key, as Semonite said the current backlog of Corps projects sits at $98 billion.


Beneficial Use

During the question and answer period, Sec. James also addressed Section 1122 projects, a beneficial use pilot program under the Water Resources and Reform Act of 2016. Earlier this year, the Corps picked 10 initial projects, from 95 submissions. Sec. James said plans are in the works to choose 10 more. None of the projects have yet to receive funding authorization, but the Corps was able to use FY2018 work plan dollars for design of the 10 projects. “We’ll be ready to go when we get the funding,” Sec. James said.