Your options if budget cuts become reality

BY BOB MIODONSKI PUBLISHER AND EDITORIAL DIRECTOR MOST CONTRACTORS I know hate the idea of big government. It means higher taxes and more burdensome regulations that intrude upon the profitability of almost any business. When the conversation turns to government and contracting, however, I always recall the words of the president of the Sheet Metal and Air Conditioning Contractors' National Association

BY BOB MIODONSKI
PUBLISHER AND EDITORIAL DIRECTOR

MOST CONTRACTORS I know hate the idea of big government. It means higher taxes and more burdensome regulations that intrude upon the profitability of almost any business.

When the conversation turns to government and contracting, however, I always recall the words of the president of the Sheet Metal and Air Conditioning Contractors' National Association the year I came to CONTRACTOR. In his speech at the 1994 SMACNA convention, he called government "the sheet metal contractors' best friend." Gerald T. Parks Jr. cited the unprecedented demand and new opportunities being created by government.

"We have the CFC phase-out — necessitating in the next few years the replacement of virtually every air conditioning unit installed since air conditioning began — even if the units are not worn out," he said. "We have the EPA demanding that everything under the sun be filtered out of every industrial plant, even down to and including the local dry cleaning store.

"We have OSHA mandating indoor air quality in the workplace — and we have the Energy Department demanding ever more and more efficient systems. I am not judging the good or bad of these governmental actions — only that the government has created a huge demand for our product."

Before we fast-forward to 2006, let's also recall that in 1994 and since then plumbing contractors have benefited from goverment mandates to replace toilets with low-flow models and to intall other water-conserving products.

The 2007 federal budget unveiled by the Bush administration earlier this year contains substantial spending reductions that will affect your business in ways that are not nearly as positive.

Slated for elimination are programs that include $64 million for oil-and-gas research and development, $23 million for geothermal technology, and $28 million for land-and-water conservation fund state recreation grants. A Small Business Administration micro-loan program, which would have cost $14 million, would be axed too.

Facing major reductions are programs for ground and surface water conservation (down $9 million) and renewable energy (down $3 million). The budget proposal calls for the EPA's clean water state revolving fund to receive a $199 million decrease.

Now you can argue that everyone has to feel the pinch if the federal government is serious about reining in spending, and none of the cuts just mentioned may hurt you that much. Where you likely would feel the most impact is from the lower spending on vocational education and training.

The budget seeks to terminate high school programs that would pay $1.18 billion in vocational education state grants and $9 million in vocational education national funding. It reduces the state job training grants consolidation program by $514 million.

These cuts for education and training couldn't come at a worse time. With the shortage of skilled workers being the No. 1 problem for many contractors, the proposed budget does nothing to improve the situation.

As we see it, you have three options if these cuts become reality.

First, you could work with your trade association to lobby Congress to keep the funding in place for vocational education and employee training programs. You could write to your congressman yourself, but you will have more influence working with an association, such as PHCC or MCAA.

Second, you could get more involved in your local school districts, which will have to make up for any shortfall in federal funding. You may have to convince educators of the importance of maintaining vocationaltechnical education in their district.

Or third, you could do all the training yourself. You already may feel that you have taken on more than your share of the training burden, yet it only will get heavier without vo-tech programs pointing high school students and other prospective employ-ees in your direction.

The fact is that government is bigger than ever. While you should be worried about the size of government, you should be just as concerned about how it spends our money.