Appropriations

Appropriations FY 2019 Features Key Wins for Regions

After months of negotiations and a historic 35-day partial government shutdown, the federal government has finally wrapped up work on the fiscal year (FY) 2019 appropriations process.

President Trump recently signed into law a $333 billion, seven-bill appropriations package that funded the Departments of Agriculture, Commerce, Housing and Urban Development, Interior, Justice, State, and Transportation. The package follows five appropriations passed in September 2018 that totaled $991 billion, providing funding for the legislative branch and the Departments of Defense, Education, Energy, Health and Human Services, Labor, and Veterans Affairs.

Our initial analysis of the FY 2019 appropriations bills signals positive news for regions! The bills include level funding or additional appropriations for many of the priorities we have advocated for over the past year.

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Transportation

BUILD Grants: The BUILD program was funded at $900 million, a decrease of $600 million from FY 2018 but still well above previous years funding (which ranged from $500 to $600 million). One major change is that half of that amount must go to projects in rural areas. Up to $15 million can be awarded in planning grants (though no such awards were made last year). Up to twenty percent of the funds can be used to pay for subsidy and administrative costs of Transportation Infrastructure Finance and Innovation Act (TIFIA) or Railroad Rehabilitation and Improvement Financing (RRIF) credit assistance.

STBGP: Of $3.5 billion in supplemental highway funding from the general fund, about $2.7 billion will be apportioned as Surface Transportation Block Grant Program (STBGP) funding (up from just under $2.0 billion last year).

CIG Program: The Capital Investment Grants (CIG) Program received $2.6 billion, a decrease of $92.3 million. This includes $1.4 billion for “New Starts,” $530 million for “Core Capacity,” and $527 million for “Small Starts.”

Transit: Transit formula grants through the Highway Trust Fund increase by $206 million compared to last year, but supplemental funding for the Transit Infrastructure Grants Program was reduced by $134 million (to $700 million).

Rail: The Federal Railroad Administration received $2.9 billion. Amtrak received level funding at $1.9 billion, with $650 million allocated for capital projects along the Northeast Corridor. The bill also includes funding for State of Good Repair grants ($400 million) and consolidated rail infrastructure and safety improvement grants ($255 million).

FAA: The Federal Aviation Administration (FAA) was funded at $17.5 billion – $549 million below the FY 2018 enacted level and $1.3 billion above the president’s request. Airport Improvement Program grants received an additional $500 million this year to make critical airport infrastructure investments and Essential Air Service (EAS) received an increase of more than $40 million.

Drones: The package provided $56 million for drone integration and $24 million for drone research. It also directed the FAA to expand the Unmanned Aircraft System Integration Pilot Program without incurring additional costs.

Aging Programs

ACL: The Administration for Community Living (ACL) was funded at $2.2 billion, a $25 million increase from fiscal year 2018.

Senior Workforce: The Senior Community Service Employment Program remains level at $400 million, rejecting the Trump administration’s proposal to eliminate the program.

OAA, Title III: The Older Americans Act (OAA) Title III programs were either level funded or saw small increases:

  • Level funding for OAA Title III B Home and Community-Based Supportive Services
  • $10 million increase for Title III C Nutrition Services
  • Level funding for Title III D Preventative Health
  • $600,000 increase for Title III E Family Caregivers Support

Census Bureau

Boost to Census Funding: The Census Bureau is funded at $3.8 billion, an increase of more than $1 billion from fiscal year 2018. With about $1 billion in carry-over funding from the previous fiscal year, it’s a big step to ramp up activities related to the 2020 census.

Community and Economic Development

CDBG and HOME: The Community Development Block Grant Program (CDBG) received level funding at $3.3 billion. The HOME Investment Partnerships Program was funded at $1.250 billion, a decrease of $112 million. The Trump administration proposed to eliminate funding for both programs in fiscal years 2018 and 2019.

SSBG & CSBG: The Social Services Block Grant (SSBG) received level funding at $1.7 billion. The Community Services Block Grant (CSBG) received a $10 million increase. The Trump Administration recommended that both programs be zeroed out in their FY 2019 budget request.

State Workforce Formula Grants: Title I – State Formula Grants of the Workforce Innovation and Opportunity Act (WIOA) received level funding at $2.8 billion. The breakdown of each grant category is:

  • $845 million for WIOA Adult activities
  • $903 million for WIOA Youth activities
  • $1.04 million for WIOA Dislocated Worker activities

EDA: The Economic Development Administration (EDA) received a $2.5 million increase. This allocation ignores the Trump administration’s recommendation to eliminate funding for the agency.

Homeless Assistance Grants: The Homeless Assistance Grants were funded at $2.64 billion, a $12.3 million increase from last year. $80 million was also allocated by the appropriations package to programs addressing youth homelessness.

Housing Choice Vouchers: Housing Choice Vouchers received level funding at $22.6 billion.

Energy & Environment

Brownfields Program: The Brownfields Project Grant Program received a $7 million increase in FY 2019 for a total of $87 million.

Energy Efficiency and Renewable Energy Program: The U.S. Department of Energy’s Energy Efficiency and Renewable Energy (EERE) Program is funded at $2.38 billion, an increase of $57 million from the last fiscal year and $1.68 billion above the president’s request.

LIHEAP: The package included a $50 million increase for the Low-Income Home Energy Assistance Program (LIHEAP) for a total of $3.69 billion. The Trump administration has recommended zeroing out funding for this program in fiscal years 2018 and 2019.

FEMA/Disaster Response and Recovery

FEMA: The Federal Emergency Management Agency (FEMA) received $16.6 billion in net discretionary funding, an increase of $4.2 billion over last year. Also included in the package:

  • $12 billion for the FEMA Disaster Relief Fund to help states and communities respond to and recover from major domestic disasters and emergencies. This is an increase of over $4.6 billion from last year.
  • $3.1 billion for FEMA emergency grants, training, and other federal assistance (a $199.7 million decrease).
  • $250 million from the Disaster Relief Fund for the “National Public Infrastructure Predisaster Mitigation Fund, which was established by last year’s FAA reauthorization (Public Law 115-254).

Flood Insurance and Mapping: The Flood Hazard Mapping and Risk Analysis Program received $262.5 million, the same amount as last fiscal year. The National Flood Insurance Fund, which supports the National Flood Insurance Program, received $202 million (a decrease of $1 million).

Rural Development

Rural Development: Rural development programs received $3.01 billion, totaling $10.8 million more than the previous fiscal year and $1.21 billion more than the president’s request.

Rural Housing and Rental Assistance Programs: $1 billion in single family housing direct loans and $230 million in multi-family housing guarantees were provided. Rural Housing Assistance Grants received $45 million ($15 million for rural housing preservation and $30 million for very low-income housing repair). Congress provided $1.3 billion for the Rental Assistance Program, which is expected to fund all expiring FY 2018 contracts.  

Rural Community Facilities Program: This program received level funding at $2.8 billion for direct loans to help fund rural hospitals, schools, and health clinics.

New Broadband Loan and Grant Program: The U.S. Department of Agriculture (USDA) Rural Utilities Service received an additional $550 million for the Rural Development Broadband ReConnect Program, a new broadband loan and grant pilot program that was created in the FY 2018 omnibus.

Substance Abuse Crisis

Substance Abuse Crisis Relief: Congress provided enhanced support for treatment and prevention efforts across the U.S. tackling the substance abuse crisis. This included:

  • Department of Health and Human Services
  • $1.5 billion to the Substance Abuse and Mental Health Services Administration’s State Opioid Response Grants
  • $120 million for the Rural Communities Opioid Response Program
  • $20 million for Regional Partnership Grants to improve the coordination of services for children and families affected by substance use disorders
  • Within the total provided for Substance Abuse Treatment Programs of Regional and National Significance in the conference exploratory statement, the conferees included $12 million for grants to prevent prescription drug/opioid overdose, $36 million for first responder training, and $89 million for the Medication-Assisted Treatment for Prescription Drug and Opioid Addiction Program
  • Department of Justice
    • $77 million for drug courts
    • $22 million for veterans’ treatment courts
    • $30 million for prescription drug monitoring programs
    • $157 million for the Comprehensive Opioid Abuse Program

Distance Learning & Telemedicine: $16 million was appropriated for Rural Development Distance Learning & Telemedicine Grants to help rural communities combat the crisis.

Water Infrastructure, Drinking Water, & Waste Disposal

Water State Revolving Funds: The Clean Water State Revolving Fund and Safe Drinking Water Revolving Fund programs were level funded, receiving $1.69 billion and $1.16 billion, respectively.

WIFIA Grants: The Water Infrastructure Finance and Innovation Act (WIFIA) Grants program received a $5 million increase from FY 2018, totaling $68 million.

WRDA Grants: Congress provided $65 million in grants authorized by the 2016 Water Resources Development Act to improve drinking water in small, disadvantaged communities; schools and child care centers; and areas with lead in their drinking water.

Water and Waste Disposal Programs: The Rural Utilities Service Rural Water and Waste Disposal Program Account saw a mixed bag of funding amounts in FY 2019:

  • $1.4 billion for water and waste direct loans ($200 million increase)
  • $400 million for water and waste disposal grants (level funding)
  • $30 million for water and waste technical assistance grants ($10 million decrease)

2018 Omnibus Appropriations Bill Bolsters Many State and Local Programs

Following the release of the $1.3 trillion fiscal year 2018 omnibus appropriations bill on March 21, NARC staff has been combing through the 2,232 page document to learn how localities will be impacted by these federal program funding levels. Much of it is great news for regions! The bill proposes additional funding for so many of the priorities we have advocated for over the last year.

Here are a few highlights:

Transportation

TIGER Grants: The TIGER program increased to $1.5 billion, tripling FY 2017’s funding level of $500 million. It provides some planning money for the first time in many years, allowing for up to $15 million in planning grants. A minimum of 30 percent of the funds are reserved for rural areas, an increase from the current 20 percent requirement.

STBGP: FAST Act highway programs are fully funded, and the bill also includes a one-time increase of $198 billion for the Surface Transportation Block Grant Program (STBGP). The increase will be distributed as it is through the FAST Act, meaning that funds will be suballocated to local areas. The funds are only eligible for road, bridge, and tunnel projects, and the STBGP set-aside (TAP) is waived. The bill includes an additional amount for public/Indian lands and territories ($320 million), and a new competitive bridge program in states with densities of less than 100 persons per square mile ($225 million).

New Life for New Starts: While the administration proposed narrowing the Capital Investment Grants Program (New Starts) funding to only cover projects already underway, the omnibus agreement provides nearly $400 million for new projects. This is an overall increase of $232 million.

Transit: Transit receives full FAST Act funding with an additional $834 million in general fund appropriations, which includes funding for state of good repair grants, buses, and bus facilities.

Rail: The bill includes large increases for several Federal Railroad Administration programs, including Amtrak which will receive $1.9 billion (an increase of $447 million) with $650 million allocated for capital projects along the Northeast Corridor (an increase of $322 million). The bill also includes funding for three FAST Act rail programs that previously received far less than their authorized amounts: the consolidated grant program to support PTC installation ($593 million), the federal-state partnership state of good repair program ($250 million), and restoration and enhancement grants ($20 million).\

Extends FAA: The Federal Aviation Administration reauthorization is now extended through September.

Automated Vehicle Research: The bill repurposes funds to create a $100 million pot for study grants and implementation of an overall study program.

No Rescissions: The previous version of House and Senate bills would have rescinded contract authority, and an amendment by Representative Rob Woodall (R-GA) to the House bill would have made suballocated STBGP subject to rescission. Since this bill ditches the rescission, there is no need for the amendment.

Clearview Font: The bill temporarily prohibits the use of funds to enforce the termination of an Interim Approval to use the Clearview Font on highway signs and requires FHWA to conduct a “comprehensive review” of the research and report back to the House and Senate Appropriations Committees.

Aging Programs

ACL: The Administration for Community Living is funded at $2.171 billion, a $178 million increase from fiscal year 2017.

Senior Workforce: The Senior Workforce Development Program remains level at $400 million, rejecting the Trump administration’s proposal to eliminate the program and the House’s proposal to cut the program funding by 100 million.

OAA, Title III: The Older Americans Act (OAA) Title III programs received significant increases:

  • $35 million increase to OAA Title III B Home and Community-Based Supportive Services
  • $59 million increase to Title III C Nutrition Services
  • $5 million increase to Title III D Preventative Health
  • $30 increase to Title III E Family Caregiver Support

Census Bureau

Boost to Census Funding: The Census Bureau is funded at $2.8 billion, an increase of more than $1.344 billion from fiscal year 2017. Over $2.5 billion of that amount will be going to periodic censuses and programs, including efforts to continue preparations for the 2020 Census Survey.

Community and Economic Development

CDBG and HOME: The Community Development Block Grant Program (CDBG) is funded at $3.3 billion – the amount NARC and the CDBG Coalition requested. The HOME Investment Partnerships Program is funded at $1.362 billion, an increase of $412 million. The Trump administration proposed to eliminate funding for both programs in fiscal years 2018 and 2019.

SSBG & CSBG: The Social Services Block Grant (SSBG) and the Community Services Block Grant (CSBG) received level funding at $1.7 billion and $715 million, respectively.

State Workforce Formula Grants: Increased grants under Title I of the Workforce Innovation and Opportunity Act (WIOA) by a combined $80 million, including:

  • $30 million increase to WIOA Adult program
  • $30 million increase to WIOA Youth programs
  • $20 million increase to WIOA Dislocated Worker state grants

EDA: The Economic Development Administration (EDA) received a $25.5 million increase. This allocation ignores the Trump administration’s recommendation to eliminate funding for the agency.

Environment

Brownfields Authorization Language: The omnibus package contains the brownfields reauthorization language NARC has pushed for, including:

  • Allowing local governments to acquire abandoned or tax delinquent property that is contaminated and to clean up the property without fear of liability
  • Funding for brownfields cleanup grants
  • Creating a multipurpose brownfields grant
  • Allowing for the recovery of limited administrative costs

Urban and Community Forestry Program: The Urban and Community Forestry Program is funded at $28.5 million, an increase from fiscal year 2017. The omnibus package also includes a comprehensive fix for wildfire funding.

Energy

Energy Efficiency and Renewable Energy Program: The U.S. Department of Energy’s Energy Efficiency and Renewable Energy (EERE) Program is funded at $2.32 billion, a significant increase of $290 million. Rather than follow the Trump’s recommendations to cut the program by three-fourths, Congress chose to increase EERE’s funding by 14 percent.

LIHEAP: The Low-Income Home Energy Assistance Program is funded at $3.64 billion, a $250 million increase. This program has been slated for elimination by the Trump administration for fiscal years 2018 and 2019.

Flood Insurance

NFIP: The National Flood Insurance Program (NFIP) is giving a short-term reauthorization through the end of July, incentivizing Congress to complete a full reauthorization before the August recess.

Rural Development

New Broadband Loan and Grant Program: The U.S. Department of Agriculture (USDA) Rural Utilities Service received $600 million for a new broadband loan and grant pilot program.

Rural Development Programs: Rural development programs receive $3 billion, an increase of $63.7 million from fiscal year 2017. This includes decreases to the Rural Housing Service and Rural Utilities Service programs, which are funded at $1.99 billion and $661.4 billion respectively.

Substance Abuse Crisis

Opioid Crisis Relief: Includes a $3.2 billion increase for programs responding to the opioid crisis, including funding for prevention, treatment, law enforcement, and other purposes.

Water

Coastal Zone Management Funding: The Coastal Zone Management Program is funded at $75 million, a $5 million increase from the previous fiscal year.

USDA Water/Wastewater Loans: USDA’s Rural Water and Wastewater Program would allow more than $3 billion in loans, $1.8 billion more than the previous fiscal year.

Water State Revolving Funds: The omnibus package provides $2.89 billion in funding to Clean Water State Revolving Funds and Safe Drinking Water State Revolving Funds, an increase of $300 million for each program. The WIFIA loan program also saw an increase in funding this year, currently standing at $63 million.

What Happens Next?

The bill quickly passed through the House and the Senate, leaving one last hurdle: getting the president’s signature. Trump tweeted this morning that he is considering a veto because of two factors:

  • The bill presents no action on the Deferred Action for Childhood Arrivals (DACA)
  • The bill does not provide the full $25 billion the president requested to build a US-Mexico border wall.

On Thursday, March 22 White House Budget Director Mick Mulvaney told reporters that the president would sign the bill. The president has until midnight tonight to sign the bill to avoid a federal government shutdown. If he vetoes the bill and it goes back to Congress, a short-term continuing resolution might be employed to avert a shutdown and buy more time to discuss next steps.

UPDATE, March 23 at 1:30 PM ET:

In a White House press conference, President Trump signed the fiscal year 2018 omnibus appropriations package, making it public law. The legislation provides funding for the federal government through September 30, the end of fiscal year 2018. Although the president said, “there are a lot of things I’m unhappy about with this bill,” he approved the bill for national security reasons and because it authorizes a major increase in military spending. He criticized the rushed process Congress took to pass this bill, saying he would “never sign another bill like this again.”

NARC Federal Budget Call Recap: Where We Are Now and What to Expect in the Fall

Senators and representatives may be home for recess, but the issues they left in Washington will be here when they return on September 5. Not only will the issues be here, but the urgency to address them will have increased significantly.

Top issues that await them include: the adoption of a federal budget, 12 appropriations bills, legislation to raise the debt ceiling, and tax reform. It is also possible that health care legislation may come up for consideration again.

This is why NARC felt it was important to host a conference call last Wednesday on the current status of the federal budget with Deborah Cox, legislative director at the National Association of Counties (NACo); Michael Wallace, program director of federal advocacy at the National League of Cities (NLC); and NARC staff. We wanted to provide you, our members, with an update on where these urgent issues stand so that you can better understand how these legislative items may impact your regions, counties, cities, and towns. We also wanted to provide you with information on how to educate your representatives and senators about the impact their decisions are likely to have on your regions and, especially, the people who live there.

Here is what you need to know:

  • Congress is faced with three important legislative deadlines in September.
  • Adoption of the 12 FY 2018 appropriations bills.
  • Passage of legislation that raises the debt ceiling.
  • Adoption of a FY 2018 budget that will pave the road for tax reform legislation.
  • The budget and appropriations process, as in years past, is behind schedule. Congressional leaders are scrambling to adopt some type of comprehensive appropriations bill by the end of September to keep the government open. More than likely, Congress will be forced to pass a temporary continuing resolution through mid-December.
  • The final appropriations bills will not be adopted until later this year or early next year. It is likely an omnibus bill incorporating all 12 appropriations bills into a single bill will be passed. The omnibus bill is expected to increase defense spending substantially while cutting some non-defense discretionary funding.
  • When appropriations legislation is bipartisan, cities, counties, and regions benefit much more. Right now, the process is very partisan and the impact on cities, counties, and regions is not likely to be positive. However, it is likely that Republicans will need Democrats to pass any omnibus appropriations bill. This will help the process become bipartisan, possibly yielding a positive outcome.
  • Legislation that permits the Treasury to borrow funds to pay the government’s bills (commonly referred to as “raising the debt ceiling”) must be passed by September 29, or there is the risk that the federal government will not be able to pay its bills. This may cause the United States to default on its debt, forcing the federal government to shut down.
  • If Congress is to move forward with tax reform, it will need to adopt a FY 2018 budget. This will provide direction on how to move forward and give the Senate authority to adopt tax reform legislation with a simple majority (51 votes) rather than a super majority (60 votes).
  • Senators and representatives drafting tax reform legislation are seriously considering eliminating the state and local tax deduction and the tax-exempt status for municipal bonds to pay for massive tax cuts.
Appropriations Specifics

NACo, NLC, and NARC staff shared that while the president proposed to eliminate funding for the weatherization assistance program, the House and Senate would fund the program at FY 2017 levels ($211.6 million). The Community Development Block Grant (CDBG), which the president zeroed out, would be funded by the Senate at current levels and by the House at $2.9 billion, just $100 million below current levels. For the HOME Investment Partnerships Program (HOME), which the president sought to eliminate, the House would cut funding by $100 million to $850 million. Transportation Investment Generating Economic Recovery (TIGER) grant program, which the president and the House wanted to eliminate, would be funded by the Senate at 10 percent over current levels to $550 million. Another program on the president’s list to cut drastically was New Starts, which would be funded by the House at $1.75 million and by the Senate by $2.13 billion. The Low-Income Home Energy Assistance Program (LIHEAP), which would have been eliminated had the president prevailed, would be maintained by the House at current levels ($3.4 billion). Finally, while the president would have reduced funding for workforce development programs by $1.3 billion, these programs would be cut by the House by only $300 million.

More specific funding information is provided in the table below.

[table id=2 /]

What Can Regions Do?

Speaking with your representatives and senators is critical. Underline the importance of these programs and how funding cuts would impact your programs and constituents. Another option that sends a strong message to congressional leadership is to send letters and op-eds to your local papers about the impact these cuts will have.

There are multiple ways you can educate your senators and representatives on federal budget issues:

  • Set up a meeting with your representative(s) while they are in their home district.
  • Invite your local representative(s) to attend one of your regional or coalition meetings.
  • Encourage them to visit a site financed by federal funds to highlight what is being achieved and why continuous funding is essential.
  • Bring stakeholders together and invite your representative(s) to see the faces of those impacted by programs funded by the federal budget.

Every effort you take to reach out to your representatives and senators while they are in your regions will have an impact, and ultimately, make a difference. And at a time like this, when programs are on the chopping block and Congress wants to cut domestic spending in favor of defense spending, there is no greater time to get involved.

NARC will release a larger, more expansive guide to educating your members of Congress, which we will share with membership.

Please note that NARC plans on holding these budget calls approximately once each month for as long as they are necessary. Look for emails announcing these calls as the details become available. If you have not yet joined us for one of these calls, now is your chance.

NARC would like to thank Deborah Cox, Legislative Director at NACo, and Michael Wallace, Program Director for Federal Advocacy at NLC, for their presentations during the call. For more information, please contact Maci Hurley at maci.hurley@narc.org or Neil Bomberg at neil@narc.org.

Additional Resources Mentioned on the Call include:

NARC’s Notes from the Appropriations Call

NARC’s Newsletter: eRegions

NARC’s Newsletter: Transportation Thursdays

NARC’s Blog: Regions Lead

NLC’s Fight the Cuts Advocacy Toolkit

NLC’s FY 2018 Budget Tracker

NACo’s Summer Advocacy Toolkit

NACo’s One Pager on State and Local Tax Deduction

NACo’s Municipal Bonds Toolkit

Governor Finance Officers Association’s Report: The Impact of Eliminating the State and Local Tax Deduction

The Federal Budget and Appropriations Process: in Limbo

It’s stuck because neither the House nor Senate has passed a budget plan that outlines spending for fiscal year (FY) 2018.

Why is it stuck?

Because the majorities in both chambers cannot agree on how much to spend on defense and non-defense programs. Moderate Republicans are concerned that a budget plan similar to the ones proposed by the president or the House speaker would make it very difficult for the House or Senate to maintain spending at current levels, let alone increase spending where consensus to increase spending existed. Conservative Republicans are pushing hard to substantially reduce spending for non-defense discretionary programs and substantially increase spending for defense discretionary programs, and want to break down the current spending caps that ensure that whatever gains or losses in spending occur are equally shared by defense and non-defense programs.

What does this mean?

It means that as we get closer to the September 30th deadline for passing a FY 2018 appropriations bills, the likelihood that Congress will yet again have to rely on a continuing resolution or omnibus appropriations bill to fund the federal government increases substantially. It also means that the chances of a government shutdown will increase.

Why is this happening?

This is happening because the Senate’s failure to pass legislation to repeal and replace the Affordable Care Act (ACA) has upended the carefully planned schedule that the Senate Majority Leader Mitch McConnell (R-KY) developed for passage of a broad range of bills, including a federal debt ceiling increase, tax reform, appropriations, and several reauthorization bills.

According to Bloomberg Government, Senator McConnell was hoping to bring up a measure to raise the federal debt limit, and push through a U.S. Department of Defense bill with large spending increases for the Pentagon in July. At the same time, McConnell was also hoping to use the work period to ensure the timely renewal of many expiring federal programs. Until the Senate adopts a budget resolution; however, it will not be able to move forward with tax reform legislation that relies on reconciliation. Under reconciliation the majority needs just 51 votes, rather than the usual 60 votes, to pass legislation. If the Senate cannot pass either health care or tax reform legislation sometime in July or early September (remember they are out for a break in August), the likelihood of passing any tax or health care legislation this calendar year will further diminish, and the series of major legislative promises made by the president will go unfulfilled.

So where do we go from here?

It is very hard to know. Certainly, Senator McConnell is a master of legislative rules and procedures, and if anyone can move things through the Senate it is he.  But the limited amount of time before the end of the fiscal year does not bode well for Republicans.

Senator John Cornyn (R-TX) acknowledged these difficulties when he told reporters that “it doesn’t get any better, it doesn’t get any easier. We’ve got other things we need to do, like the defense authorization bill. We need to get ready to pass another budget so we can get reconciliation instructions for tax reform.”

The next several months should prove interesting. Depending on how this all turns out, the losers and winners will be neither Republicans nor Democrats, not even Independents. It will be the American people. We will just have to stay tuned and hope that someone, somehow will develop a strategy for moving legislation forward.

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.

Want America to Be ‘Great’ Again? Pay For It – By Pat Jones, IBTTA

The following article, Want America to be Great Again? Pay for It, by Pat Jones was originally published as a guest editorial in the April 18 issue of Time magazine. Pat Jones is the CEO of the International Bridge, Tunnel, and Turnpike Association (IBTTA), an organization that represents tolling agencies from around the nation and world. His organization has been at the forefront of advocating for increased resources to maintain our roads, bridges and tunnels, and other infrastructure. This blog argues for a coherent, thoughtful transportation policy that provides the necessary funds to ensure that America’s roads and bridges, and other infrastructure, are properly maintained. Most recently, Mr. Jones was a general session speaker at NARC’s  2017 National Conference of Regions.

Elon Musk recently announced that he is fed up with traffic in Los Angeles and will soon begin boring a tunnel under the city to relieve congestion. As a billionaire and innovator, Musk has the resources to make something like this happen. But even if he bores his tunnel, where does that leave the rest of the country with its congested highways, crumbling bridges, aging water systems and fragile power grid? One big push in L.A. doesn’t solve the problems of an entire country struggling under the burden of billions of dollars in deferred maintenance. We need a national vision to pay for and revitalize our infrastructure for all Americans.

For decades, my association (IBTTA) and many others have urged Congress and the states to make much bigger investments in our vital infrastructure. But we are still far behind where we would like to be. The problem is us. We say we want better roads and safer drinking water. But year after year, we refuse to come up with the money to make the big improvements that we need. Yes, some states and local governments have taken it upon themselves to raise revenue. But that isn’t enough to meet all our infrastructure needs.

But there is hope. President Donald Trump has shined a bright light on infrastructure. During the campaign, his inaugural address – and most recently, his Joint Address to Congress – he emphasized his commitment to rebuild roads, bridges and schools. Last October, his advisors published a paper that proposed $1 trillion in new infrastructure investment over ten years by offering tax credits to private investors. And recently, Senate Democrats introduced their own $1 trillion plan to repair crumbling roads, rebuild schools and do more while creating over 15 million new jobs.

As hopeful as these proposals are, there is a big problem: They are heavy on vision and light on details, specifically how to pay for them. Paying for a grand plan is always the sticking point. Those who advance these proposals don’t want to talk about “pay-fors” until the last minute, because they want to limit the opportunity of their adversaries to oppose them. So, we get the big vision first in the light of day, and the messy sausage-making of pay-fors in the dead of night.

And who’s to blame for this? The American people. It may seem that Congress and the President are pursuing wicked ends through clandestine means when they wrap up a deal with pay-fors at the eleventh hour. But they are simply following our lead.

Consider this reader comment in response to a recent newspaper article describing Americans’ reluctance to pay user fees to rebuild infrastructure. The reader said, “Americans want first class roads but don’t want to pay for them. Well, folks, nothing is free. No one will provide these things without taxes or user fees.”

In response to this attitude, Congress and the President have twisted themselves into unnatural shapes to say to voters, “Yes, we’re going to rebuild your infrastructure,” and “No, we’re not going to raise taxes or fees to do it (well, maybe just a little).”

This Harry Houdini act must end. We can’t rebuild our infrastructure if our elected leaders are forced to carry out our will wrapped in a straitjacket and submerged in a glass coffin rapidly filling with water. This tableau makes for great theater but lousy public policy.

Having a grand infrastructure proposal without a means to pay for it doesn’t solve the problem. It merely names the problem and a happy end state, without any of the hard work needed to get to the end. We need to be honest with each other and make sacrifices now to ensure a better future. Sacrifice in this case means money, with Americans paying more than they pay today in exchange for better infrastructure.

It’s time to treat the American people like adults and explain the need for bigger investment in the form of taxes and user fees. Adults understand that there is no free lunch and there are no free roads. Let’s have an honest conversation that starts like this: We are going to build and maintain the finest infrastructure in the world and we, the American people, are going to pay for it.

Federal Support for Job Training Programs

On April 4, the House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies held a hearing, Examining Federal Support for Job Training Programs. Witnesses included University of Maryland School of Public Policy Professor and Atlantic Council Senior Fellow Douglas J. Besharov, Urban Institute Fellow Dr. Demetra Smith Nightingale, and Markle Foundation CEO and President Zoe Baird.

Bi-Partisanship on Capitol Hill?

What may have been most striking about the hearing was the comity members exhibited throughout, the positive nature of member statements and questions, and the balanced and thoughtful perspectives that were offered by the panelists. It appeared that the committee went out of its way to invite speakers who would paint an accurate, not politicized view of job training programs.  During their brief presentations, speakers addressed a range of topics that reflected overall support for the program.

Testimony on Job Training

Douglas Besherov noted that the American workforce is no longer the best trained workforce in the world. That needs to change, he said, and added that the current job training system has been part of the solution. He spoke of a job training center he visited in which practical nurses were trained to become registered nurses, and added that the program was so well done that the salaries of the women who became registered nurses increased almost immediately by $15,000.

Zoe Bird felt that American job centers were a significant strength of the workforce system, providing workers and employers with access to one another. She did note, however, that her experience in Colorado led her to believe that coaches could be more helpful if they had access to more data, resources, and digital training. Once the Markle Foundation stepped in to develop coaches, the connection between the center and employers improved and overall success rates went up.

Dematra Nightengale praised the program for its partnership between federal, state, and local governments, noting that job training is just one of the many services that job centers offer. She went on to highlight the activities that she believes are the most successful and effective, including:

  • Training for in-demand jobs through career pathways or apprenticeship programs;
  • Counseling and staff supported services;
  • Comprehensive and integrated youth programs;
  • Training that targets low-income people because employer-based training is generally not available for them;
  • Evaluations and evidence-based assessments to determine what works best.
Questions about Job Training

Committee members asked straight forward questions about the job training system and how it can be improved. Among the questions and answers were:

  • Is the workforce development system working?
    • Yes, but some aspects could be improved.
  • Which workforce programs are working best?
    • Core services with well-trained coaches, YouthBuild, Job Corps, and youth employment programs.
  • How important are the American job centers and are they working?
    • Yes, they are working and they are very important to the success of the system, though an emphasis needs to be placed on access to digital resources and training coaches.
  • Are there innovations that the federal government can offer to make the system even better?
    • The federal government could focus on improving access to data so that employers and workers can have access to better information.
  • Should the federal government continue to play a role in workforce training? And if so, what role should it play?
    • Yes, the federal government should continue to play a role and that role can be to develop training programs that are based on skills development and not seat time.
  • What one thing could make a notable and positive difference in workforce development?
    • The overarching theme was that we need to improve access to data. Data forms the basis for evaluations and ensures that strategies are data-driven.
Fact, Not Fiction

The questions reflected a desire to understand the job training system, how it is doing, and how it can be improved – Not how it could be cut, how the federal government could get out of the job training business, and whether the programs should be devolved to the states through block grants (code for substantially cutting a program).

NARC will continue to monitor the committee and provide updates on the state of workforce programs.