Bulletin Board Magazine 2021 V4

But price increases in materials clearly became risk #1 in 2021 and has turned profit margins upside down. Modifying contract language to include material escalation provisions and force majeure clauses have been needed lifelines for builders. Risks are not always a tangible physical item. Often the scary and highly expensive risks are the “new” attributes undertaken by a contractor. Examples include job size, geographic location, end markets, supply chains, or customer expectations. Every company has a sweet spot. It’s the intersection of where they perform best at meeting their client’s expectations. We deliver a quality product under a reasonable timeline and with a rewarding profit margin. We would do these jobs 24/7/365. Due to factors generated both internally and externally we are not always operating in that location. So how do we go about assessing risks for “new” attributes and opportunities? Let’s think of that sweet spot as a bullseye on a dart board. Picture the red round center area with black rings expanding outwards. Each one of those “new” items is another ring pushing out away from the sweet spot. When we undertake new endeavors that risk takes us away from our strengths. So how comfortable and prepared are you as you move away from the bull’s eye? Many forecasters anticipated change in the tax laws by the time we got to 2022. The Build Back Better Act has stalled in Washington, D.C. How that gets moved forward will invariably lead to revised tax regulations in hopes to garner support to ensure the Act’s passage. While there have been some modest tweaks to the tax code, we enter 2022 as we entered 2021 or 2020. Anticipated expectations in 2022 see Corporate tax rates moving from 21% to 28%, the Estate lifetime exclusion dropping from $10 million down to $5 million. Upon enactment those items will be absorbed and prove not to be disruptive to day-to-day operations. Contrasting, an income tax surcharge proposed on certain highly

compensated taxpayers is a concept surely to bloody a nose or two. For how long the song remains the same is tough to say. Current projections have us looking at new legislation in the first quarter of 2022. But this is a mid- term election cycle, so who knows. A much closer than expected New Jersey Governor’s race this past November has impacted our state legislation process as well. We will see unexpected changes in the leadership of our state senate as they work with Governor Murphy during his second four-year term. Collectively these items shape how we move forward in 2022. No easy answers, no one size fits all solution. We gain confidence with each hurdle cleared, pausing to study and outwit the next.

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