Cuts to CDBG, Muni Bond Interest Cap Would Harm Nation’s Cities

Washington, D.C.  - After President Barack Obama released his budget proposal for FY2015 earlier today, National League of Cities (NLC) Executive Director Clarence Anthony issued this statement:

 "We appreciate President Obama's attention to cities in his FY2015 budget proposal through his support of investments in transportation infrastructure, education, green infrastructure and energy efficiency, as well as his commitment to decrease the deficit. However, the proposed cuts to the Community Development Block Grant (CDBG) program and the cap on tax exempt municipal bonds would have a severe impact on the ability of cities to serve their residents by taking away critical funding mechanisms that support a wide range of local infrastructure programs, economic development and jobs.

"Cities rely on CDBG grants to invest in their communities and create jobs by supporting housing, infrastructure and economic development. Even though CDBG grants have enjoyed strong bipartisan support, the president's proposal would cut CDBG grants by $230 million, which would be a setback for the more than 7,000 cities and towns that directly or indirectly receive CDBG funds each year.  

"We are also deeply concerned by the proposed cap on the exemption for interest earned on municipal bonds. This would mean local governments would have to pay more to finance much needed projects, leading to less infrastructure investment, fewer jobs and higher taxes and fees for our residents. This continues to be a proposal we cannot support.  

"Fortunately, the president remains committed to investments in our nation's transportation infrastructure by calling for increases in funding to support our nation's highways and transit systems. Investment in local infrastructure yields economic growth, jobs and access education, providing opportunity to all residents.  

"We are also glad to see President Obama's commitment to sustainability by designating 20 percent of the Clean Water and Drinking Water State Revolving Loan Funds (SRFs) to green infrastructure and water and energy efficiency projects. Unfortunately, this comes at the expense of overall funding of SRFs, which were cut by a combined $581 million.  

"Importantly, many education programs that cities and their residents rely on saw funding levels maintained or increased, including Title I, special education programs and Pell Grants. We were pleased that the budget calls for $75 billion over ten years to support the implementation of high-quality preschool programs that are aligned with primary and secondary education systems.

"We urge Congress to carefully consider city priorities when they begin debate on the FY2015 budget. We can't afford cuts in the critical areas that help our cities and their residents thrive."   

The National League of Cities (NLC) is dedicated to helping city leaders build better communities. NLC is a resource and advocate for 19,000 cities, towns and villages, representing more than 218 million Americans.