Issues & AdvocacyIssues & Advocacy
AIA Government & Community Relations News: Week of January 9, 2012
AIA headlines this week include:
“In the News” – links to other news sources:
This week, the AIA announced that seven communities have been selected for its 2012 Sustainable Design Assessment Team (SDAT) program. The SDAT program brings together multidisciplinary teams of professionals from across the country to work with residents, community stakeholders and decision-makers through an intensive planning process. This year’s SDAT recipients include:
Since 2005, the SDAT program has provided technical assistance to 54 communities across 34 states. SDATs have achieved notable success in galvanizing communities to take action. The City of Northampton, Massachusetts was an SDAT recipient in 2006. As Planning Director Wayne Feiden explains, “The SDAT helped frame the dialogue about Northampton's future in sustainability terms and led the groundwork for a Sustainable Northampton Comprehensive Plan. We believe that the level of excitement for that subsequent comprehensive plan was a direct outgrowth of the SDAT process.” Dubuque, Iowa was an SDAT community in 2007. As Laura Carstens, the city’s Planning Services Manager, observes, “Our Unified Development Code of zoning, subdivision, site development, historic preservation, and sign regulations incorporates sustainable design and low impact development (LID) while meeting smart growth objectives, thanks in large part to the Dubuque SDAT process. Sustainable design is now the expectation for development in Dubuque.”
New Mexico Governor Susana Martinez (R) has announced plans to change the state’s tax laws in ways that may especially benefit the design and construction industry. Governor Martinez FY 2012 budget proposes using $55 million to reduce or eliminate the gross receipts tax (GRT) on 40,000 small businesses and to put an end to “tax pyramiding” in the construction and manufacturing industries.
A gross receipts tax, unlike the more common sales tax, is levied on goods and services. In industries like construction, which involve multiple business to business transactions, the GRT is levied on each individual transaction. This means that each subcontractor that must pay the GRT will add the GRT’s cost into its bill. This cost is then passed on to the consumer. Effectively, the consumer who pays the gross receipts tax on the entire cost of the project must pay tax on tax.
New Mexico law allows construction services that are directly related to the installation of a physical element of a building to be deducted from the gross receipts tax. However, this definition of construction services does not include design services or job-site expenses like portable bathrooms or fencing. The cost of these activities is still subject to tax pyramiding. While Governor Martinez has made statements addressing this issue, no specific legislation has been introduced yet which would exempt design services from the GRT.
New Mexico is one of 5 states that currently tax architectural services, along with Delaware, Hawaii, South Dakota, and Washington.
AIA members will get the chance this month to speak with the Number Two official at the U.S. Small Business Administration (SBA) about how the SBA can help small architecture firms get ahead.
SBA Deputy Administrator Marie C. Johns will join the AIA on its monthly virtual advocacy meeting January 19 at 4:00 pm ET. Johns, who leads the Administration’s small business policy development efforts, was nominated by President Obama to serve as Deputy Administrator in December 2009 and unanimously confirmed by the Senate in 2010. Prior to becoming Deputy Administrator, Johns was served as president of Verizon Washington, where she developed products and services to meet the needs of Verizon’s small business customers.
Johns will speak to AIA members about the SBA’s efforts to help small business owners secure financing, business training and obtaining federal contracts. With the economic crisis tightening credit, the SBA had a record year in 2011 in providing financing to small businesses. The SBA also helps provide business training through their regional offices around the country on a variety of questions that challenge small business owners—from local permitting and employment law to how to set up a business plan.
Johns also will take questions from AIA members on the call. The questions will be moderated; send questions to firstname.lastname@example.org prior to the start of the call. Due to a potentially large number of participants, please click here to reserve a spot.
David Brennan, AIA, NCARB, has served his community in many ways over the years, and is currently serving on the Erie City Council. In January's Citizen Architect on the Move podcast, Brennan highlights the value civically engaged architects bring to their communities and his work bringing jobs to his community.
David Brennan’s background and experience is diversified among architecture, planning, urban design, and economic development. He currently serves as the Director of Planning & Design for the Economic Development Corporation of Erie County (EDC), is a member of the Board of Trustees at Arts Erie, and is also a member of the board of directors for the Presque Isle Partnership. Mr. Brennan has also been actively involved in the AIA over the years, including his service as president of the Northwest Pennsylvania chapter from 2003-2005. Mr. Brennan’s ongoing civic engagement exemplifies the importance of architects getting involved and making a difference in their communities.
To learn more about other AIA citizen architects, or the Citizen Architect program, visit the AIA Issues & Advocacy website.
From the Tea Party’s rise to Anthony Weiner’s fall, from the near-government default to Herman Cain’s 9-9-9 plan, 2011 had more than its share of arresting, frustrating, and quirky moments in the world of government and politics. But what were the developments that most impacted architects and the built environment – and what are the trends that will shape design in 2012?
The AIA Government and Community Relations team invites you to join us on a look back, and a preview of what’s to come…
11. Warning: Gridlock Ahead
The 2010 election presaged a bitter year of partisan battles, tension that even a mid-year round of golf between President Obama and Speaker Boehner couldn’t ease. In April, the government nearly shut down when the parties could not agree on spending bills, and in August the federal government came close to default when the fight over the debt ceiling boiled over. The partisan fighting prevented many important issues from being addressed, culminating in the failure of the deficit supercommittee to reach a deal in November.
Despite the battles, though, some legislation moved forward, including AIA-backed efforts to repeal burdensome 1099 reporting requirements and the three-percent withholding law. And both Republicans and Democrats in the House found themselves in agreement with the AIA that the Small Business Administration’s proposed increase in the size standard on architecture firms from $4.5 million to $19 million were too high.
10. A Sea Change in Codes
The clock continued to count down toward the March 2012 release of the International Green Construction Code (IgCC). This is the first national model green building code and will bring substantial changes to the practice of architecture as it is adopted by jurisdictions. High-stakes code hearings in the fall spurred major efforts to reshape and rewrite the code, in some cases in ways that would have dramatically affected how architecture is practiced. In the end, architects and their allies were successful in beating back the most damaging amendments.
As the release date nears, the AIA is working hard to prepare architects for these changes. Stay tuned for news about a host of resources, including education sessions at the 2012 AIA National Convention, online materials, and prepared presentations for component education. Visit www.aia.org/igcc to stay up to date on the AIA’s IgCC efforts.
9. Threats to Design?
Spurred in part by the bad economy, efforts at the state level to encroach upon the work architects do continued unabated in 2011. Among the issues faced by AIA components were threats to qualifications-based selection laws, efforts to pass interior design practice acts, and diminished capital budgets. By most accounts, 2011 was just a warm-up for 2012, when legislation that would infringe upon the ability of architects to practice is expected to resurface in many state capitols.
The 2011 session was not only one of defense though, as many AIA state components recorded major legislative victories, including tort reform in South Carolina, indemnification protections in Texas and Iowa, and major reductions in the lengths of the statute of repose in Alabama and the statute of limitations in Michigan.
8. Challenging Times Make for Strange Bedfellows
When the nation’s largest business advocacy group and the nation's largest labor union team up to lobby for legislation, you know something is in the air. But that’s what happened in 2011, when the U.S. Chamber of Commerce and the AFL-CIO joined hands with the AIA and other organizations to call on Congress and the White House to invest in infrastructure to create jobs.
If 2011 was the year of bitter partisanship, it also was the year that architects and other professionals realized that working together was far more successful than going it alone. At the end of the year, more than 45 organizations and companies from across the often-fractured design and construction industry joined with the AIA to press Congress and the White House to pass legislation to get the economy moving again. Hopefully, policymakers will learn from the industry that in hard times, it’s better to cooperate than to fight.
7. Green is Still the New Black
Climate change legislation may be on the back burner, and the slow economy may be slowing many projects, but the interest among policymakers in energy efficient buildings appears to be holding steady. In February, the Obama administration announced a new program, the Better Buildings Initiative, based in part on AIA proposals to expand tax incentives and other financing for green buildings. The AIA’s Local Leaders in Sustainability: Special Report from Sundance (developed with the US Green Building Council, ICLEI Local Governments for Sustainability, and the Redford Center), released in early 2011, showed continued support in state and local governments for green schools legislation. And interest in and use of the federal 179D energy efficient commercial building tax deduction by public agencies continued to grow.
Even in Congress, where agreement was hard to come by, the Senate Energy and Natural Resources Committee managed to approve a bill to promote energy efficiency by a strong bipartisan vote.
6. Governments Tighten their Belts
The pressing need to cut budgets and decrease debt forced governments at all levels to cut back drastically on design and construction spending. At the federal level, the General Services Administration’s new construction fund received no new monies for the 2012 fiscal year. At the state level, many agencies face severe budget cuts. These moves come at a time that public architecture has served as a lifeline for many firms due to the challenges in the private market, a trend that underlined the record number of attendees at the AIA’s Federal Agency Connection at the 2012 Convention in New Orleans.
One bright spot: Congress did provide the Architect of the Capitol with enough funds to begin needed repair work on the Capitol dome. The belt-tightening is expected to continue into 2012, a year that will mark the 50th anniversary of Senator Patrick Moynihan’s seminal Guiding Principles of Federal Architecture, a moment AIA members will celebrate at the 2012 Convention in Washington, DC, and use to make the case that investments in public design are necessary no matter the economic climate.
5. Communities on the Brink – and Coming Back
The latest AIA Home Trends Survey put into sharp relief what architects have seen for years: a combination of rising foreclosures in exurbia, an aging population, and longer commutes are causing more Americans to want housing that is closer to their jobs, shopping, and amenities. Communities across the country lined up in 2011 for AIA’s help in planning sustainable development through the Sustainable Design Assessment Team (SDAT) program. And while budget cuts have put a dent in the Obama administration’s livability initiative, the trend lines towards more compact, denser communities augur continued movement towards policies that help communities revitalize in better designed ways.
4. A Disastrous Year for Disasters
Massive tornadoes in Alabama and Missouri, raging wildfires in Texas, tropical storm havoc along the East Coast and other natural calamities made 2011 one of the most destructive years in the country’s history (even Washington, DC, could not escape the year -- a rare earthquake left the Washington Monument closed for months). By some estimates, these disasters cost $52 billion. By far the most devastating scenes were from Joplin, MO, and Alabama, where massive twisters left a trail of death and destruction for miles. But as powerful as the disasters were, the resolve of the communities to rebuild has been stronger. AIA members spearheaded the formation of a plan to rebuild part of Birmingham, AL, worked with the Joplin community to help them recover, and sent a design assessment team to Bastrop, TX, epicenter of the Lone Star State’s summer wildfires.
The bad news: the trend of dangerous weather is expected to continue into 2012, forcing architects to redouble efforts to make communities more resilient and help neighborhoods rebuild following destruction.
3. Going Global
A slow economy at home and in Europe, coupled with massive growth in China, India, and other developing nations, continued to make overseas work not just an enticing option for American architects, but a growing necessity. When 2011 AIA President Clark Manus, FAIA, traveled to India last spring to meet with Indian business leaders and US Commerce Department personnel, he found a nation that needs far more architects than it can train.
Recognizing the challenges that many design firms, especially smaller ones, face in international markets, the AIA is developing a program of trade missions overseas for 2012 and beyond to help its members get a foot into the growing markets overseas.
2. Decision 2012
It may seem like just yesterday that Barack Obama and John McCain were battling for the White House, but the 2012 election is already upon us. With control of the U.S. Senate, and maybe the House, up for grabs, and a Republican Party anxious to coalesce around a candidate to take on Obama, what happens on the campaign trail in the next eleven months will shape policy toward the built environment for years to come.
Thankfully, architects are getting ready, raising record amounts for ArchiPAC, the AIA’s federal political action committee, in 2011, and gearing up to make the profession’s voice heard as a part of the DesignVote12 program in 2012. Meanwhile, numerous AIA members are getting ready to join the more than 1200 architects who currently serve in appointed and elected positions at the state and local levels, making sure that when governments make decisions that affect architecture, architects are at the table.
1. The Economy, the Economy, the Economy
Rarely has Bill Clinton’s 1992 campaign motto – “It’s the Economy, Stupid!” – been more apt than in 2011 as the aftereffects of the financial crisis and the recession that will not go away linger. Week after week, politicians, the media, and the public have watched with baited breath as the latest economic data emanated from Washington: the unemployment rate, new jobless claims, housing starts, and the AIA’s Architecture Billings Index are all scrutinized like an X-ray of a sick patient.
The national jobless rate may be hovering around nine percent, but in the design and construction industry, it has remained much higher. When 800 AIA leaders took to Capitol Hill last February as a part of the Grassroots Leadership and Legislative Conference, they made sure that lawmakers got the message that job creation in an industry that counts for one in nine dollars of Gross Domestic Product was vital to getting the economy moving again – and that making credit more available was key to creating those jobs.
That message was reinforced mid-year when the AIA launched its Stalled Projects initiative to match potential projects to willing investors. As the year closed out, the AIA was leading a diverse design and construction coalition demanding Congress and the White House take action on legislation to help move the economy forward, a message 2011 AIA President Clark Manus, FAIA, took directly to the White House last week.
Although there is no silver bullet to get the economy fully back on track, the message is finally getting through. As Transportation Secretary Ray LaHood told an AIA staff member at a Capitol Hill briefing last week, design and construction mean jobs. And politicians of all stripes know that creating more jobs is vital if they want to keep theirs in 2012.
When people hear the words “small business,” mom-and-pop grocery stores or software start-ups usually come to mind. But increasingly policymakers in Washington are being clued into what AIA members already know: few professions are composed of more small businesspeople than architecture.
More than nine in ten AIA members own or work at a small firm. In many communities, small architecture firms are as vital a job creator as any other entrepreneur, with nearly a quarter of a million Americans employed by design firms. As the current economic crisis shows, issues like a lack of financing and burdensome paperwork laws hurt small firms especially hard.
The good news is that Washington is beginning to take notice. This month, Marie Johns, Deputy Administrator of the U.S. Small Business Administration, will speak directly to AIA members during the AIA’s monthly virtual advocacy call about services the SBA can provide to small design firms and to hear from architects about the challenges they face.
In 2010, the House Small Business Committee asked Baltimore architect Jim Determan, AIA, to testify about the need for small business financing; his testimony led the committee to pass legislation to expand lending, which eventually became law. In addition, when the U.S. Small Business Administration proposed last year to raise the size standard for small architecture firms from the current $4.5 million to $19 million, Congress again called on the AIA to provide expertise. (WILL FIND LINKS FOR ALL STUFF IN LAST 2 PARAS)
This newfound recognition of the role architects play as small business job creators has come in part because architects are showing they are ready to speak up. Thanks to the efforts of thousands of AIA members, in 2011 Congress repealed two separate laws – a new Form 1099 requirement and a three-percent withholding - that would have burdened small architecture firms with additional paperwork and tax liabilities.
Small firms face unique challenges. Whether it is securing lines of credit, winning government contracts, or developing a business plan, small firms must provide top-quality service under tight budgets and timelines. The AIA has developed special resources to help small firms thrive. The AIA’s Small Firm Round Table focuses on smaller firms with a mission to “further the special and unique interests of architects practicing in small firms and architects as sole practitioners by working with and through the AIA.” (link: http://network.aia.org/SmallFirmRoundTable/Home/ )
In addition, the AIA provides resources for firms about government procurement opportunities. Over twenty percent of federal government procurement contracts are required to go to small businesses, which is why the AIA provides resources to help small firms enter this market.
Additionally, there are resources to help a small firm take its business to another county - or another country. The US Department of Commerce (DOC) and the Small Business Administration (SBA) have services throughout the United States to help you expand your business domestically and internationally.
Disasters do not discriminate based on business size; the SBA can help you with disaster preparedness services, disaster assistance, or post-disaster loans to help you plan and rebuild after a disaster occurs.
Throughout the month, the AIA Issues and Advocacy page will provide additional resources to help small businesses grow and expand.
ArchiPAC, the AIA’s only federal political action committee, had a landmark year in 2011. Not only did AIA members and staff contribute more than $126,000, a 25 percent increase over 2010, but 1,333 individuals participated in the PAC, more than in any year in ArchiPAC’s 32-year history.
AIA member dues cannot be used for political activities, so ArchiPAC, which uses its proceeds to support the campaigns of architecture-friendly federal candidates, must rely only on voluntary member and staff contributions. On the ArchiPAC website, the ArchiPAC Steering Committee recognizes the donors that made ArchiPAC’s record-breaking year possible.
“In order to protect and promote our profession, architects must be heard by our nation’s elected leaders,” wrote Jim Rains, AIA, National ArchiPAC Chairman, in a message to AIA members in December. “The AIA is working to make sure Congress understands the challenges that architects face, and that our nation’s leaders know that our profession has common-sense solutions. If we don’t speak up for the role of the architect, then someone else will do it for us – and I know we won’t like the result.”
In 2011, for the first time, the ArchiPAC Steering Committee, chaired by Jim Rains, AIA, of North Carolina, set goals for each of the 18 AIA regions. By the end of the year, the South Atlantic Region (Georgia, North Carolina and South Carolina) and Texas had healthily surpassed their goals, with other AIA regions showing tremendous growth over previous years:
Two days before Christmas, Congress and the White House gave taxpayers a small present by extending a payroll tax cut, a little over a week before its scheduled expiration.
The deal provides for a two-month extension of the two-percent reduction in Social Security taxes (from 6.2 percent to 4.2 percent) first enacted in 2010. The extension prolongs the lower tax rate until the end of February for over 160 million workers and represents a roughly $1,000 savings per year per household. The extension also included the following:
Keeping the current rates for Medicare payments to doctors;
Extending the federal benefits of those who have experienced long term unemployment;
Maintaining same payroll processing structure so small businesses will not have to upgrade their accounting systems.
The Senate has passed the two-month extension a week earlier, acknowledging that consensus on a full-year extension was not forthcoming. However, House Republicans initially rejected the two-month extension, arguing that the Senate instead should return to hammer out a deal. But intense political pressure from not just Democrats, but some Senate Republicans, coupled with the fear that no action would mean a tax increase on January 1, caused House Republicans to relent and approve the two-month extension with minor changes.
The agreement, however, did not address the deep divide over how an extension beyond February will be paid for in 2012. Democrats are pushing a “millionaire surtax” which would tax the highest earning Americans to offset the cost of the payroll tax cut. Republicans object to an additional tax and, instead are calling for increased spending cuts, including cuts to the federal workforce and a federal pay freeze.
As 2012 begins, Congress is gearing up for a continued debate over this issue along with several other tax and spending policies, including tax reform, budget cuts , and whether to extend the $4 trillion Bush-era income tax cuts that are set to expire at the end of the year. Since the size of the payroll tax cut, a “tiny” $200 billion, pales in comparison to the larger budget debates, there is some hope that policymakers will settle this issue in a timely manner, recognizing that there are bigger fish to fry. Then again, in an election year, no debate is easily resolved.
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