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AIA headlines this week include:

• Design Assistance Effort Kicks Off in Austin

• 2012 Tax Policy Forecast: Uncertainty, with a High Chance of Partisanship

• AIA Working to Prepare Members on IGCC’s Impact on Practice

“In the News” – links to other news sources:

• SDAT in Springfield Follows the Successful 2002 R/UDAT

• Austin, TX, Prepares for SDAT

• Transportation Bills Abound as Congress Returns

• AIA Member: Washington Must Act to Restart Construction Industry

• DOE Guide 'Can Halve Energy Costs' for Retail Stores

During the 1990s, Austin, Texas hosted several Regional and Urban Design Assistance Team (R/UDAT) events that involved over 800 citizens and had a transformative impact on the downtown. Through these processes, the Downtown Business Alliance was formed and a downtown public improvement district was created. A series of strategic investments followed and led to the new City Hall, retail and residential development downtown, and a series of cultural institutions. Today, the city’s downtown waterfront serves as a magnet for human activity, providing a central civic space and gathering area.

Last week, the Center for Communities by Design opened a new chapter in its relationship with the city. Austin is one of seven communities in the 2012 SDAT program. Under the leadership of Harris Steinberg, FAIA, the Center will be working with city residents and stakeholders to build a strategy for South Shore Central, across Lady Bird Lake from the downtown. The Center conducted an initial visit to Austin from January 9-11. During the two-day visit, the Center participated in a public hearing of the Waterfront Planning Advisory Board, met with City Council representatives, city staff from several agencies, representatives from the development community, the University of Texas, AIA-Austin, neighborhood representatives, and others. Over the coming months, the Center will be working with local officials to schedule the full charrette and recruit a multi-disciplinary team of national experts to work with the community.

For more information about the Austin SDAT project, consult the project application, City Council Resolution, and local news reports. For background on the Austin R/UDAT projects, consult the city webpage.

Congress wrapped up 2011 business after pushing many tax and fiscal policy items down the road to 2012. Numerous tax incentives expired on Dec. 31 without any consensus on whether to extend them or end them. Although it is not uncommon for Congress to retroactively extend expired tax breaks, the current political and budgetary climate will make passing 2011 extenders, on top of 2012 new business, a painstaking process at best.

Congressional failure to deal with expiring provisions and other tax policy items in 2011 means that those items must be taken up this year with a Congress and a President facing elections. On top of this political climate, the items that Congress must vote on this year are big ticket, highly contentious items, including another debt ceiling increase and the extension of the Bush-era tax cuts.

Payroll Tax Break

With Congress returning to session yesterday, their first order of business will likely be the payroll tax break extension. In late December, Congress agreed to extend the payroll tax break for two months while it tries to work out a deal on a year-long extension. There is a deep divide over how the longer term extension will be paid for in 2012. Democrats are pushing a “millionaire surtax” that would tax the highest earning Americans to offset costs. Republicans object to an additional tax and instead are calling for spending cuts, including cuts to the federal workforce and a federal pay freeze. Despite the outcome, it is clear Congress must settle this issue before it can tend to bigger ticket items.

Debt Ceiling Increase

Once again, Congress must decide whether to block the President’s request to raise the debt ceiling so that the country may borrow more funds to continue to run the government. Last August, Congress engaged in a heated debate over this very issue, which resulted in a deal being struck between the President and GOP leadership creating the (now failed) debt supercommittee.

This time around, Congress may quietly let the debt ceiling increase go through, since neither party wants to further alienate a frustrated and angry electorate. Then again, there are many newcomers to Congress who won their seats pledging to never raise the debt ceiling, and thus may try to force the issue. Either way, the debt ceiling must be raised soon before the government faces another potential default.

AMT Patch

The Alternative Minimum Tax (AMT) will likely also become an issue near the middle of the year. The AMT is assessed to very high income earners who use tax shelters to reduce their tax liability to nearly nothing. The AMT kicks in so that those taxpayers pay a minimum tax based on their high income that year. However, the level of income when the AMT kicks in is not nearly as high as it was when the AMT was first established. Congress has “patched” the AMT by raising the income threshold on a regular basis.

The AMT patch typically has had bipartisan support and passes without much protest. However, in light of the payroll tax and debt ceiling debate, the fiscal crisis, and the climate in Washington generally, this issue may become a debate. With Democrats calling for a surtax on millionaires, they may use this patch as a bargaining chip.

2011 Extenders

Although many tax incentives expired on December 31, 2011, Congress can still opt to extend them retroactively. Typically, expiring tax provisions are extended without much of a fight, but not this time around. Many members of the House Ways and Means Committee believe that Congress should tackle tax reform that would likely eliminate all of these expiring provisions, instead of wasting time extending the provisions year after year.

However, until tax reform becomes an immediate reality, Congress must tend to these provisions. It is likely that Congress will wait until a lame duck session, after the election, to handle the issue.

Bush Era Tax Cuts

The tax provisions expiring at the end of 2012 include the 2001 and 2003 tax cuts signed into law by then-President Bush that reduced the tax liability for all income earners. However, in the years since those tax cuts were enacted, the federal budget deficit has swelled, while the economy has swooned.

Therefore, the Bush era tax cuts are up for what will likely be a highly contentious debate. The Democrats will likely call for an extension of the cuts, but only for those families earning less than $250,000 a year, arguing that the nation needs the revenue from the high income families. Republicans will likely call for an extension for all families, regardless of income, arguing that a tax increase on anyone will hurt the already struggling economy.

If Congress cannot agree on a deal before December 31, 2012, taxes will go up for all families. Therefore, there is immense pressure for Congress to deal with this issue. However, it will likely be an eleventh hour decision made by a lame duck Congress.

Tax Reform

As if Congress needed another debate this year, many are calling for the first overhaul of the federal tax code since 1986. Rep. Dave Camp (R-MI), Chairman of the tax-writing Ways and Means Committee, has promised to make tax reform his priority in 2012. Many other lawmakers agree with his stance and see tax reform as an opportunity to provide certainty to taxpayers, shore up the economy, and possibly even address the nation’s fiscal crisis.

However, tax reform will take a massive amount of time and jostling between Congress and the White House, at a time when so many other issues are demanding attention. That is why the likelihood of sweeping tax reform passing in 2012 is very slim. However, there is an opportunity for select pieces of tax reform, like revamping the international tax structure, to be dealt with piece by piece.

Tax issues are just a small portion of the variety of issues Congress and the Administration need to address in 2012, and there is no way to predict when and how lawmakers will act. The AIA is keeping a close eye on all issues, and it continues to educate and guide Congress on all issues affecting architects in 2012.

Members of the 2012 AIA International Green Construction Code (IgCC) Task Force met last week in Washington to prepare materials for AIA members concerning the release of the new code. The 2012 International Green Construction Code will be published in March 2012 and the Task Force is working on ways to best inform and engage members about its release.

In addition to education sessions at Convention and Grassroots, several resources will be made available to members and components via the AIA web site. On the AIA’s IgCC page, the AIA will post the latest updates on the code, educational materials, and answers to frequently asked questions about the code.  Once the code is published, the Task Force will distribute additional materials that will help AIA components that are interested in working toward adoption of the new code to prepare their advocacy efforts.  Adoption of a sustainable building code is an element of the AIA 2030 goals, and the Task Force wants to provide as much guidance for the components that wish to meet this goal.

For questions on the AIA’s efforts, contact Stephanie Spear, manager of Codes Advocacy.