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Little Good News for Cities in President's Budget
by Federal Relations Staff and Sherry Conway Appel
Last week, the President introduced his fiscal year 2009 budget proposal. While there were increases for defense spending and the extension of tax cuts in the $3.1 trillion proposal, there was little good news in terms of funding for programs important to cities and towns.
“The President’s budget hits local governments hard, cutting programs needed by cities and towns to develop their communities, promote jobs and fight crime,” said NLC President Cynthia McCollum, council member of Madison, Ala., in response to the President’s budget. “Yet again, the Administration is attempting to reduce the Community Development Block Grant (CDBG) program, slash programs to address housing, energy efficiency, workforce development and other critical federal grants. The cuts for workforce development assistance are especially troubling given the sudden and sharp downturn in the number of jobs in the workplace.”
McCollum said that cities and towns have had to fight every year for CDBG, one of the most successful programs used by cities of all sizes, and will do it again.
“We’re also concerned about the cuts to homeland security and other public safety programs,” she said. “Finally, at a time when we need to find ways to increase energy efficiency and reduce the congestion choking our metropolitan areas, the proposed cuts to Amtrak and transit funding makes no sense. More importantly, however, is the effect these cuts will have on our local budgets, which are facing huge pressures because of the fallout from the housing crisis. Because cuts at the federal level too often translate directly into local government — and the taxpayers — scrambling to pick up the tab, our choices are few — cut needed services or raise revenues.”
McCollum vowed to work closely with Congressional leaders in the coming months to bring reality into this budget process and have the federal government as a full partner.
The following summarizes the President’s FY 2009 Budget request for priority programs for cities and towns:
Crime Prevention Programs
The President’s budget calls for $22.7 billion, or a 2 percent decrease over last year. However, funds for programs that support local law enforcement efforts would be slashed by 61 percent or $1 billion as part of a consolidation of 70 state and local law enforcement assistance programs into four grant programs.
This consolidation would mean the end of two popular and effective public safety programs — the Community Oriented Policing Services (COPS) program and Byrne Justice Assistance Grants.
Under the proposed consolidation, the attorney general would have significant discretion in deciding how to distribute grant funding. The proposed cuts are coming at a time when communities continue to grapple with increases in violent crime rates.
Both the Federal Bureau of Investigation and the Drug Enforcement Administration’s budgets would increase under the President’s budget to reflect what Department of Justice officials in a meeting last week described as “a shift in mission” toward counterterrorism.
Housing and Community Revitalization Programs
The President has proposed increasing the budget for the Department of Housing and Urban Development (HUD) by less than 1 percent to $38.7 billion. But the programs that would see an increase in funding next year, while important to cities and towns, do not have the broad impact of the CDBG program, which the President proposes to cut yet again.
At a time when cities could use CDBG funding to address the increasing community needs associated with vacant and abandoned housing due to foreclosures, the President’s budget would cut funding for CDBG by approximately $1 billion or 30 percent from $3.9 billion to $2.9 billion. The President also proposes to eliminate the HOPE VI program, the only federal program dedicated to the construction and rehabilitation of public housing.
The President’s budget would increase funding for several affordable housing programs, including the HOME Investment Partnership Program by $263 million to nearly $2 billion and would set aside an additional $15 million, for a total of $65 million, for housing counseling programs to help homeowners at risk of foreclosure.
To address the deepening problems in the Section 8 Project-Based Rental Assistance program, the President’s budget increases funding for this program $1 billion to a total of $7 billion. Last year, HUD ran out of funding before the end of the year, delaying payments to property owners and jeopardizing the status of the renters and the stability of communities.
Transportation Programs
The FY 2009 budget requests $57.1 billion for federal transportation programs, down from an estimated $63.4 billion for fiscal year 2008. The proposed budget would reduce spending for Amtrak, transit and local airport grants, including taking funding from transit programs to reduce the anticipated shortfall in highway funds in fiscal 2009.
Amtrak would be funded at $525 million below the fiscal 208 funding, not withstanding support expressed by the recently released recommendations of the National Surface Transportation and Revenue Study Commission to expand America’s intercity passenger rail program.
The proposal would reduce funding under the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) authorizing legislation, providing only $39.4 billion, almost $2 billion less than guaranteed by SAFETEA-LU.
Similarly, the Administration has proposed to fund the federal transit program at a level some $200 million below SAFETEA-LU authorizations, including meeting the anticipated shortfall in the Highway Account of the Highway Trust Fund by “borrowing” money from the Transit Account. The Administration proposal would reduce the balance in the Mass Transit Account to the point where, absent new funding, the federal transit program could not be funded in 2010 at even the current level.
Education Programs
While total discretionary funding for the Department of Education would remain at 2008 levels under the President’s budget, programs such as No Child Left Behind/Title I and the Individuals with Disabilities Act (IDEA) would receive 3 percent increases. Title I funding, which is targeted at schools with substantial numbers of disadvantaged youth, would increase by $406 million to $14.3 billion, and IDEA funding would increase by $300 million to $11.3 billion.
One new initiative could increase educational options for children but shift federal funds away from local school districts toward private schools. If enacted, the “Pell Grants for Kids” program would make funds available to low-income primary and secondary school students who are attending inferior schools, so they could transfer to private schools or out of district schools.
Energy Programs
The President’s budget would increase total Department of Energy spending by 4.7 percent over fiscal year 2008, for a total of $25 billion, but most of the increase would go toward funding nuclear weapons systems.
The President would fund the Office of Energy Efficiency and Renewable Energy at $1.26 billion in FY 2009, a decrease of $467 million or 27 percent from last year. This cut would eliminate the $220 million Weatherization Assistance Program that local governments use to help families insulate their homes and lower their heating or cooling costs, as well as cut renewable energy programs that do not directly impact cities.
Environmental Protection Agency
The President’s budget would continue the Administration’s trend of slashing funding for the Environmental Protection Agency (EPA). If the President’s budget is adopted, funding for EPA would fall by $400 million or about 7 percent to $7.1 billion from last year’s $7.5 billion.
Under the President’s proposal, the Clean Water State Revolving Fund would receive $555 million in FY 2009, a drop of about $145 million from FY 2008. Through this fund, states and local governments can access low-interest loans to for sewage treatment and pollution control. The loss of support for this loan fund is likely to reduce the number of projects nationwide that cities and towns are able to implement. The Drinking Water State Revolving Fund would be level funded at $842.2 million. Both funds are essential to helping cities meet the requirements of the Clean Water Act.
The Administration proposed a small cut to the Superfund program, from $1.274 billion in FY 2008 to $1.264 billion in FY 2009. Finally, the Brownfields Projects is slightly increased under the President’s proposal, from $93.52 billion in FY 2008 to $9.56 billion in FY 2009. Neither the cut to the Superfund program nor the increase to the Brownfields Project is significant. Congress, however, believes that current funding and authorization levels for the Brownfields Project needs to be increased so that cities and towns are able to clean up more industrial waste sites.
Health and Human Services Programs
The President’s budget for the Department of Health and Human Services would maintain discretionary funding at fiscal year 2008 levels, $70.8 billion, but would substantially reduce funding for many programs that cities rely on to help reduce poverty and increase economic opportunity.
Funding for the Low Income Home Energy Assistance Program, which has helped millions of poor and elderly Americans pay for heating or cooling their homes, would be reduced by 23 percent from $2.57 to $2 billion. Funding for the Social Services Block Grant, a program that supports a range of community social services from child care to medical services to residential treatment services, and the Community Services Block Grant program, which is used to reduce the impact of poverty on communities, would be zeroed out. Cities and towns that use these funds to provide welfare and other low income individuals with child care or basic medical services would have to eliminate the services offered or find alternative funding sources.
Funding for the Head Start program would be increased by $149 million or about 2 percent and funding for Community Health Centers would be increased by $54 million or less than 1 percent. The State Children’s Health Insurance Program would be increased to ensure that children currently covered continue to be covered.
Funding for pandemic flu preparedness would increase significantly from about $78 million last year to more than half a billion dollars this year. This increase would go a long way to help cities and towns meet their planning and prevention needs. However, funds to support state and local bioterrorism preparedness within the Centers for Disease Control and Prevention would be reduced by $137 million from $746 million to $609 million, forcing cities and towns to reduce their efforts around bioterrorism or find other funding resources.
Homeland Security Programs
While the President has proposed an increase in the Department of Homeland Security budget by $2.7 billion, grants to state and local first responders would be slashed by nearly half to pay for an increase in border security.
Priorities include $775 million to install border barriers and surveillance technology, $442 million to hire 2,200 new Border Patrol agents and $46 million to add 1,000 detention beds.
States and cities would see a reduction of 47 percent — $1.9 billion — in grants for security, law enforcement, firefighters and emergency medical teams. Hopefully Congress will again reverse the Administration’s efforts to cut state and local grants and add funding instead. Funding for state and local interoperability emergency grants would stay at current levels of $50 million.
Workforce Development Programs
The President’s budget cuts the Department of Labor’s budget by 10 percent. The President's budget would reduce Workforce Investment Act (WIA) programs, which are an important component of local job creation initiatives, by $438 million.
WIA programs for disadvantaged adults would be reduced by $138 million from $850 million to $712 million; dislocated worker training would be cut by $98 million dollars from $1.3 billion to $1.2 billion; and disadvantaged youth training would be lowered $102 million from $983 million to $891 million. The President also proposes to shift more of the administration of WIA programs from local governments to the state.
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