The National Stone, Sand & Gravel Association is closely following the administration's fiscal year 2007 (FY '07) budget proposals for the programs named below. We have briefly detailed the proposed budget and the effect for these programs.

Federal Highway Administration (FHWA)
The proposed budget provides record funding for the federal highway program in the amount of $39.09 billion, $3.5 billion more than last year. Of the total, $38.244 billion is required by SAFETEA-LU, and the remaining $842 million is from revenue aligned budget authority (RABA). RABA is a mechanism to align receipts into the Highway Trust Fund (HTF) with outlays. Under SAFETEA-LU, 50 percent of any positive RABA is allocated to FY '07 spending with the remainder held over for the following year. NSSGA will continue to advocate for full funding of this important program and vigorously oppose any attempt to deviate from the SAFETEA-LU authorized amounts.

Federal Aviation Administration (FAA)
One of the few dark spots in the proposed budget is the FAA. Its budget is divided into three accounts: operations, facilities and equipment (F&E), and the Airport Improvement Program (AIP). The operations and F&E accounts are increased and decreased respectively, while the AIP account is cut by $765 million (a whopping 22 percent) from last year providing only $2.75 billion. This proposed amount is $950 million below authorized levels. Congress rejected the administration's proposed AIP cut of $500 million last year and is likely to reject this year's cuts as well. NSSGA strongly supports full funding of this important infrastructure program and will work towards that end.

The USACE has seen multiple administrations attempt to cut programmatic funding and multiple victories by Congress as it restored those funds. While there was a large funding increase in FY 2006, it was mostly due to supplemental spending for Hurricane Katrina relief. Compared to the FY 2005 funding level of $5.27 billion, the current FY 2007 request of only $4.73 billion, will result in a $540 million cut to the program. The bulk of the cuts are to the General Construction account, which is proposed to receive $1.56 billion compared to $2.35 billion for last year, a difference of $793 million. NSSGA will pursue full funding for this important program, as repairing and replacing locks and dams will require aggregate and help those companies who use barges to move their products.

The agency took a financial hit with a proposed budget of $7.32 billion for fiscal 2007. By contrast, Bush proposed spending $7.62 billion last year and $8.37 billion for fiscal 2004. EPA budget documents highlight the fact that the agency was putting more money into homeland security efforts and cleaner diesel fuel.

Clean Water State Revolving Funds (SRF)
After Congress restored most of the proposed reduction to the Clean Water SRF last year, the administration has proposed an even larger cut to the program for FY '07. Funded at $886.7 million last year, the administration is only asking for $687.5 million this year, a $199.2 million dollar reduction. The Clean Water SRF provides low-interest loans to communities for installation or repair of sewer systems through a revolving loan fund.

Drinking Water State Revolving Fund (SRF)
Surprisingly, the administration did not propose to reduce funding for this important program in FY '07, but to increase its budget to $841.5 million, almost a $4 million increase. The Drinking Water SRF provides low-interest loans to communities to install drinking water systems, through the revolving loan fund.

Note: the EPA's 2002 Clean Water and Drinking Water Infrastructure Gap Analysis found that there would be a $271 billion gap between current spending and projected needs by 2020. Considering every dollar of the SRF programs leverage $4 for projects, NSSGA believes funding these infrastructure programs at an adequate level is in the best interest of the nation.

U.S. Geological Survey (USGS) - Mineral Resource Program (MRP)
After being tasked to upgrade domestic and worldwide tsunami and earthquake warnings systems last year, in FY'07 the USGS is being asked by the administration to do more with less. The proposed funding level of $944.76 million, if enacted, would result in a reduction from last year of $20.585 million. Once again, the Mineral Resource Program would see almost the entire budgetary cut totaling $21.989 million. Included in the Mineral Resource Program is the valuable Minerals Information Team (MIT), which reports on the worldwide supply of, demand for, and flow of minerals and materials essential to the U.S. economy, the national security, and protection of the environment. The MIT is expected to be cut about $2 million, which would eliminate the reporting on all minerals and materials produced outside the United States. The MIT is the only entity that collects this data. NSSGA led the charge last year to restore funding to the MRP, thus preventing a cut to the MIT of $2 million.

Bureau of Alcohol, Tobacco and Firearms (ATF)
The administration again has decided to offset $120 million of the $980 million annual budget allocated for the ATF by proposing a user tax on explosives. The aggregates industry is the second largest user of explosives behind the coal industry. NSSGA opposes funding a law enforcement program critical to safety and security of American citizens on taxes that will fluctuate with the economy and bear no relationship to the need for government oversight or intervention. NSSGA has met with key congressional committee staff, members of Congress, and even sat down with the Office of Management and Budget to help educate it on the issue. NSSGA will continue to oppose the user tax initiative.

The administration has proposed reducing the budget for the DOL from $11.3 billion to $10.9 billion for fiscal 2007, a $400 million reduction. Funding for the Employment and Training Administration would decrease by $648 million to $9.4 billion, including cuts in the Workforce Investment Act. Some of those funds would be allocated to states under a new proposal, Career Advancement Accounts. Workers entering the workforce or transitioning between jobs would use the funds to purchase education and training. The total of the CAA program would be $3.4 billion. The Occupational Safety and Health Administration's budget would increase by $11.2 million to $483.7 million.

Mine Safety Health Administration (MSHA)
The Mine Safety and Health Administration budget would increase by $10 million to $287.8 million. Coal Mine Safety and Health would get a $3.3 million increase to $120 million; Metal/Nonmetal Safety and Health would see a $2 million increase to $70.1 million; and the rest of the programs receive nominal increases. The justification for the increase in Metal/Nonmetal funding is the need for additional employees in response to recent mine accidents in West Virginia and elsewhere.

It is important to note the administration's budget proposal is just that - a proposal, or a blueprint. Congress is free to accept it in whole or part, as the Constitution of the United States vests solely with Congress the power to allocate revenues. The next step is the drafting of a budget by the House and Senate, followed by congressional hearings, approval of a budget resolution in each chamber by April 15th, and ending only when each of the 12 annual appropriations bills are signed into law. Please contact Government Affairs with any questions.