Month: May 2017

President’s FY18 “A New Foundation for American Greatness” Budget Not Great for Local Governments

On Tuesday, May 23, the president introduced his first ever, full budget proposal: A New Foundation for American Greatness. If adopted into law, the budget would impose catastrophic cuts to non-defense discretionary programs (those most targeted to local programs), while dramatically increasing spending for defense-related programs.

If you believe that the greatness of a nation is measured by the vitality of its communities and the well being of its citizens than this budget does not meet its goal as a new foundation for American greatness. Instead, it is a budget that will continue the “war” against communities, economically disadvantaged people, and programs that are important to local governments everywhere.

Let’s begin with the big picture. If adopted, this budget would cut $54 billion from programs designed to meet human needs in fiscal year 2018, and $1.4 trillion over 10 years. These include transportation, workforce development, economic development programs, community and economic development, housing, aging, clean water and air, youth and other so-called non-defense discretionary programs. The $1 trillion over 10 years infrastructure program promised during the campaign would be reduced to $200 billion over 10 years with much of the investments coming from the private sector through public-private partnerships.

Fiscal year 2018’s  $54 billion in “savings” would be appropriated to defense, resulting in a 10 percent increase in overall defense spending in fiscal year 2018 and a $469 billion increase over 10 years.

Departments like the Environmental Protection Agency would be cut by $2.6 billion or 31 percent as compared to fiscal year 2017; Labor would be cut by $2.5 billion or 21 percent; Health and Human Services by $7.8 billion or 16 percent; Commerce (including the Economic Development Administration) by $1.5 billion or 16 percent; Transportation by $2.4 billion or 13 percent; Housing and Urban Development by $4.3 billion or 12 percent; and Energy by $1.7 billion or 6 percent.

Moreover, nothing has changed since the president’s “skinny budget” was released.

Under the president’s full budget proposal, funding for:

  • CDBG, the HOME Investment Partnerships Program, Choice Neighborhoods and the Self-help Home Ownership Opportunity Program would be eliminated;
  • Workforce development programs would be cut;
  • “New Start” and TIGER Transportation programs would be eliminated or substantially reduced, respectively;
  • Programs focused on climate change, water quality, and chemical safety, and “safe and sustainable water resources,” would be substantially reduced;
  • Low Income Home Energy Assistance Program (LIHEAP) and the Community Services Block Grant (CSBG) would end; and
  • Federal support for job training and employment service formula grants would be substantially reduced so that state, localities and employers would accept the costs for workforce training and development.

The question that is often asked is whether federal spending is sustainable. The question that may need to be asked now is whether these cuts are sustainable. Tens of millions of people will be directly impacted by these and other cuts (last year 23 million households received assistance to pay for heating and cooling through LIHEAP and millions received assistance to achieve their workforce goals). And if these cuts are approved, regions across the nation will find that the resources they and their cities and counties need to do the work they do will dry up.

This budget is everything but a new foundation for American greatness.

Review the president’s budget proposal to learn more.

Why Do We Need Infrastructure Week?

As we approach Infrastructure Week (May 15 through 19) – a week of education and advocacy designed to draw attention to the importance of infrastructure to our nation’s economy, jobs, and communities – we should stop for a moment and ask why? Why must we have an Infrastructure Week? Shouldn’t the wealthiest nation on the planet have the best infrastructure in the world? We should, but sadly, we don’t.

Of course, anyone:

  • trying to get safe, clean water in Flint, Michigan,
  • driving on the roads of many cities that are bursting with potholes,
  • using mass transit in a city like Washington, DC where investment in the subway system is insufficient, and
  • enjoying public parks in Kansas where the difference between what is spent and what is needed is believed to be quite large

…knows that something is not right.

But we also know in a more informed way from many experts on infrastructure, including the American Society of Civil Engineers, the Brookings Institution, academic researchers, the Heritage Foundation, and the U.S. Transportation Department, that our nation’s infrastructure is in need of significant repair and increased investments in maintenance.

What Does This Mean?

It means that our aviation, bridges, tunnels, highways, ports, rail, mass transit, dams and levees, energy systems, drinking water, inland waterways, hazardous waste disposal, solid waste disposal, wastewater treatment facilities, parks, and schools are in need of repair and maintenance.

What Do We Need To Do?

Clearly, we need to begin investing in our infrastructure right now. It is unlikely that we will instantly find all of the funds we need to repair and maintain our infrastructure when America’s debt is almost $20 trillion, but we cannot afford to do nothing. The reason goes beyond our deficient infrastructure – it speaks to our global competitiveness. America desperately needs ports and airports that can handle greater capacity; roads and bridges that can accommodate an increasing number of vehicles; mass transit systems that can move people from home to work efficiently and safely; and drinking water that is clean and safe. The resources to address these needs must be made available as soon as possible.

Experts seem to agree on several steps to make infrastructure investments possible, including:

  • Increasing our annual investments in infrastructure by one percent of GDP;
  • Maintaining existing and creating new dedicated public funding sources for infrastructure needs at the federal, state, and local levels that are consistently and sufficiently funded;
  • Raising the motor fuel tax and considering new ways to tax road use, including miles traveled;
  • Authorizing programs and funds to improve specific categories of infrastructure; and
  • Establishing standards that require consumers to pay for the true cost of using, maintaining, and improving infrastructure, including water, waste, transportation, and energy services.

There is also substantial disagreement concerning which investment strategy would work best, which strategy would promote economic growth and grow jobs, and what role the federal government should play in infrastructure.

Whether a consensus around infrastructure investments can be reached will largely be left to the politicians – and they have to make their decisions based on evidence. For years there has been a lack of political will to move legislation designed to repair, maintain, and improve our infrastructure, and this hasn’t changed since the last national election. Even the current proposals from the president and Senate Democrats to invest more than $1 trillion in infrastructure spending over the next ten years have been met with little enthusiasm.

So why do we need Infrastructure Week? I guess the answer is a pretty straightforward one. Until the U.S. finds a plan for repairing and properly maintaining our infrastructure – not to mention investing in new infrastructure – Infrastructure Week will be necessary. This is our reality.

Next:  The Economic Impact of Not Doing Enough to Improve Our Infrastructure

At Long Last… A FY 2017 Omnibus Appropriations Bill

As if by magic, the House and Senate, early in the morning on Monday, May 1, came to an agreement on a $1.1 billion fiscal year (FY) omnibus appropriations bill that will fund the government through September 30, 2017. (NOTE: Specific funding amounts are included at the bottom of this blog.)

The bill is expected to be adopted by Friday, May 5, when the short-term funding bill expires. If all goes as expected and the President is willing to sign the omnibus appropriations bill, the threat of a government shutdown will have again been averted.

According to Bloomberg Government the omnibus appropriations bill ‘tracks with Democratic priorities and rejects most of Donald Trump’s wish list, including money to begin building a wall along the U.S.-Mexican border,’ though it does increase military spending by $15 billion and border security by $1.5 billion. However, none of the additional border security funds can be used to build the wall.

The White House had demanded that Congress cut $18 billion from domestic agencies and provide funding for border wall construction, but both demands were rebuffed, as were demands by the White House and congressional conservatives that funding for Planned Parenthood be eliminated.

Overall, the compromise is more in keeping with former President Obama’s request than it is with Donald Trump’s. Though the 1600 page bill may include a one percent cut across all non-defense discretionary programs (which was not made clear at press time), 70 anti-environmental policy riders and all abortion-related riders that the White House and conservatives wanted were rebuffed.

In addition, funding for the National Institutes of Health, the Energy Department’s Office of Energy Efficiency and Renewable Energy and Office of Science would be increased, and the bill would prevent the Justice Department from restricting the dispensing of medical marijuana in states where it has been legalized. The Environmental Protection Agency, which the Administration has considered eliminating, would receive a one percent cut.

The bill includes $61 million to reimburse New York City for costs incurred by local law enforcement agencies responsible for protecting Mr. Trump and his family.

Democrats did succeed in requiring the Administration to fund Obamacare subsidies; however, the extension is only temporary and will have to be renegotiated in future appropriations bills.

But while passage of this omnibus appropriations bill has now been resolved, the threat of a government shutdown looms large for October – when Democrats and Republicans will again have to litigate such items as Obamacare and the border wall, in addition to reaching an agreement on increasing the debt limit.

NARC is reviewing the final text of the omnibus appropriations. The information below is very preliminary and will be updated tomorrow and Wednesday. However, as you will see, the funding news is largely good for the programs that matter to regional councils.

Key: 

  • (-) reduction in funding from last year
  • (=) level funding
  • (+) increased funding
  • (++) significant increase

Commerce:

  • Economic Development Administration — $276 million (+)

Housing:

  • Community Development Block Grant level funded at $3 billion (=)
  • HOME — $950 million (=)

Transportation:

  • Surface Transportation Infrastructure — $500 million
  • Airport and Airway Trust/Essential Service — $150 million
  • TIGER Grants — $500 million (=)

Environment:

  • Brownfields — $2.6 billion
  • Clean Water Revolving State Fund — $1.4 billion
  • Clean Air Act — $1.1 billion
  • Water Infrastructure and Innovations – $976 million

 Health and Human Services:

  • Low Income Home Energy Assistance — $3.4 billion (-)
  • Aging services — $1.9 billion (=)
  • Opioid Addiction — $1.6 billion (+)

Agriculture: 

  • Rural Development — $2.94 (+)

Federal Emergency Management Agency:

  • Stafford Disaster Relief — $7.3 billion (++)
  • Urban Area Security Initiative — $605 million (+)

 

The author wishes to acknowledge Bloomberg Government, the Hill, Politico, the New York Times, and the Washington Post, as well as National Public Radio, which were important resources when writing this article.