Government funding is set to expire on September 30, 2025, and Congress is undertaking the FY2026 appropriations process -needing to pass twelve separate appropriations bills by the end of September to avoid a government shutdown.
White House Targets SRFs and Broadband: On May 2, 2025, The Trump administration released their budget proposal for Fiscal Year 2026, known as the “skinny budget.” The White House budget proposal included $163 billion in cuts to non-defense discretionary programs, equating to a 23 percent cut of enacted levels from Fiscal Year 2025. Despite the White House proposal, Congress controls spending levels for FY2026, and both the House and Senate are currently undertaking the appropriations process for the coming fiscal year. The Trump administration’s FY2026 skinny budget proposal suggested cutting two programs the many contractors heavily rely on: the EPA’s State Revolving Fund Program (SRF), which funds water and wastewater projects nationwide and the USDA’s Re-Connect Program, which funds broadband internet expansion throughout rural regions.
Congress Pushes Back: Despite the proposed cuts, the House Appropriations Interior, Environment, and Related Agencies Subcommittee proposed providing $2.1 billion to both the Clean Water SRF and Drinking Water SRF while the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies proposed increasing the Reconnect Program to $90 million for FY2026. The Senate is working on their appropriations process separately and suggested $35 million for the Re-Connect Program in FY2026. They have not released funding levels for the SRF program. AGC of America urged the appropriations committee to support these two programs.
Notable Transportation Provisions: The House proposal maintains funding levels for traditional infrastructure -like roads and bridges – but makes cuts to some Infrastructure Investment and Jobs Act (IIJA) programs and redirects them to other national priorities. Specifically, their spending bill targets electric vehicle charging stations, the Reconnecting Communities program, and truck emissions reduction programs in ports. The House version also prohibits the use of funds to purchase, install, maintain, or operate speed cameras or redlight cameras. We will provide updates on the Senate proposal when that text is released.
As always, AGC will keep you updated on the latest.
For additional information, please contact John Chambers or Deniz Mustafa.