A Big Surprise in the 2012-2013 Budget

Over the weekend, budget perusers from the design and construction industry found a startling surprise in the Governor’s Executive Review of the proposed 2012-2013 budget. While most in the industry weren’t happy with the capital and operations spending proposed for construction the austerity was hardly a surprise (and quite necessary). What was a surprise was the proposal to place a one-year moratorium on new school construction. This moratorium would effectively halt design on any project scheduled for reimbursement while the Dept. of Education overhauled the PlanCon process.

Few involved in school construction would argue with the change in the PlanCon process, however the negative impact on construction would be significant. For a number of reasons, the K-12 market has over the years become almost a cottage industry of its own. For the architects, contractors, specialty subcontractors and supply chain, this moratorium will have chilling effects on their businesses. Moreover, because the moratorium is impacting projects still in the early stages of development it has the effect of shutting down two years of construction.

One can hardly blame the budget office for keeping the proposal quiet and the reality is that for some time now the reimbursement coffers have been empty, with more than 200 school projects awaiting reimbursement for which there are no funds available. But more transparency on a proposal that will have a huge impact on the state’s construction economy was called for.

The language appears in the first paragraph on page A1.16 of the Overview: Education in Pennsylvania in the 2012-2013 Governor’s Executive Budget summary. Click this link to navigate to the budget.

http://www.budget.state.pa.us/portal/server.pt/community/current_and_proposed_commonwealth_budgets/4566

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