Connecting state and local government leaders

Trump’s Proposed Budget Cuts Would Be Hard Hits for State and Local Governments

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Connecting state and local government leaders

The president is calling for the elimination of funding for the Community Development Block Grant program and the TIGER grant program, as well as steep cuts to EPA grants.

WASHINGTON — Federal agencies and programs that state and local governments rely on for grants and other support would see drastic cuts under a budget proposal the White House sent to Congress on Thursday.

President Trump’s $1.1 trillion discretionary spending blueprint calls for the elimination of funding for the U.S. Department of Housing and Urban Development’s Community Development Block Grant program. It would also chop the U.S. Department of Transportation’s budget by 13 percent, to $16.2 billion, while axing all funding for TIGER—or Transportation Investment Generating Economic Recovery—grants.

The proposal would slash 31 percent from the U.S. Environmental Protection Agency’s budget as well, shrinking it to $5.7 billion.

Within the EPA cuts is a $482 million reduction in "categorical grants." These would drop steeply to $597 million. The budget plan notes that "this funding level eliminates or substantially reduces Federal investment in State environmental activities that go beyond EPA’s statutory requirements." Some of the areas categorical grants target include air quality, wetlands and hazardous waste.

Trump's budget also seeks to eliminate funding for a number of independent agencies, including the Appalachian Regional Commission, which focuses on economic development in 13 Appalachian states. In the 2016 fiscal year, the commission was provided $146 million.

Defense spending in Trump's plan would rise by $54 billion, with the Defense Department's base budget increasing 10 percent to $574 billion.

The U.S. Department of Homeland Security’s budget would go up by 6.8 percent to $44 billion. But $667 million of state and local grant funding for programs run by the Federal Emergency Management Agency would be eliminated or reduced.

The White House proposal includes $2.6 billion in fiscal year 2018 that would go toward a project to build a wall on the nation’s southern border with Mexico, which was one of Trump's campaign promises, along with other technology and "tactical infrastructure" in the region.

“This is the America first budget,” Mick Mulvaney, director of the White House Office of Management and Budget, said during a briefing Wednesday, referring to a phrase used by Trump.

“We wrote it using the president’s own words,” Mulvaney added. He said the numbers in the proposal reflected discussions with the president and ideas Trump has presented in speeches.

Some of cuts that would affect states and localities—such as those directed toward the Community Development Block Grant program and the Appalachian Regional Commission—align with ideas previously advanced by The Heritage Foundation and the Republican Study Committee, a conservative group of House lawmakers.

Shifting financial obligations from the federal level to states and localities is a theme that pops up throughout the spending plan.

The proposal received an icy response from some local leaders.

"President Trump’s proposed budget," Seattle Mayor Ed Murray, a Democrat, said in a statement, "decimates support for public health, working families, seniors, and the environment."

The so-called "skinny budget" does not include mandatory spending on entitlement programs like Medicaid, Medicare and Social Security, which consumes most of the federal budget. Mandatory spending totaled about $2.4 trillion in fiscal year 2016.

Trump is expected to release a full budget in May.

As Congress decides to what extent they will accept or reject the president's budget plans, many of his proposals are likely to meet resistance. Some of the spending cuts the White House has called for would affect programs that have enjoyed bipartisan backing.

For instance, U.S. Sen. Susan Collins, a Maine Republican, voiced support last week for TIGER grants. Since 2009, Congress has directed nearly $4.6 billion to the competitive grant program, which has helped fund projects ranging from streetcar lines to rural highway upgrades.

On Thursday, U.S. Sen. Lisa Murkowski, a Republican from Alaska, endorsed Trump's emphasis on national defense. But in a statement she said: "I cannot support many of the proposed cuts." 

Programs for low-income heating assistance and water and wastewater were among the examples she mentioned.

"We need to remember that these programs are not the primary drivers of our debt," added Murkowski, who sits on the Senate Committee on Appropriations.

U.S. Rep. Rob Bishop, a Utah Republican who chairs the House Committee on Natural Resources, struck an upbeat note.

"This framework is a positive start," he said of the White House budget blueprint in a statement. "I look forward to building on these ideas through the budget process and our Committee’s work.”

During a news conference House Speaker Paul Ryan stressed that "when a president submits a budget, that is the beginning of the budget process." 

Preserving the Community Development Block Grant, or CDBG, program will be a priority for mayors and other local leaders.

“I've never heard a mayor say that CDBG was anything but important,” Oklahoma City Mayor Mick Cornett, a Republican, who is president of the U.S. Conference of Mayors said during a recent interview. He referred to the dollars cities get from the program as “cherished.”

Funding for CDBG in fiscal years 2015 and 2016 was about $3 billion. The grants provide a flexible source of money local governments can use for a variety of activities, ranging from programs to assist the homeless, to sidewalk repairs and sewer line upgrades.

New Orleans Mayor Mitch Landrieu, a Democrat, told Route Fifty earlier this month there would be “very robust blowback” from mayors against any move to eliminate or greatly reduce CDBG funding.

Mulvaney was asked Wednesday how cuts to HUD were consistent with the president’s vow to assist “inner cities.”

“One of the other things the president said was he was going to go after wasteful programs, duplicative programs, programs that simply don’t work,” he replied. “And a lot of those are in HUD.”

“We’ve spent a lot of money on housing and urban development over the last decades without a lot to show for it,” Mulvaney added. “Certainly there are some successes. But there’s a lot of programs that simply cannot justify their existence and that’s where we zeroed in.”

Pressed about CDBG funding during a White House press briefing on Thursday, Mulvaney said he believed that, since the administration of then-President George W. Bush, the grant program had been identified as "not showing any results."

"We can't spend money on programs just because they sound good," he said after getting a question about how the program's elimination could threaten funding directed toward Meals on Wheels, a service that delivers food to senior citizens. "We cannot defend that anymore," Mulvaney added. "We're $20 trillion in debt."

Trump has said he’d like to see $1 trillion invested in the nation’s infrastructure, using a combination of federal and private sector money. Details about how that investment could look were not included in the document issued on Thursday.

But Mulvaney said reductions in the White House plan that would affect existing infrastructure programs, such as cuts to the Department of Transportation, were “done intentionally.”

“We believe those programs to be less efficient than the infrastructure package that we're working on for later on this year,” he said. Money shifted out of those areas, according to Mulvaney, would effectively be held for “more efficient infrastructure programs later on.”

Despite the deep EPA cuts in Trump's proposal, the agency would get $2.3 billion for the Clean Water and Drinking Water State Revolving Funds, a $4 million increase over 2017 levels. These funds help support water projects.

EPA's Water Infrastructure Finance and Innovation Act program, which provides low-cost, supplemental loans, would be preserved at its current level of $20 million.

Within the Department of Agriculture, the president's plan would nix $498 million for a water and wastewater loan and grant program serving rural communities. These places, the budget proposal says, can be "served by private sector financing" or other federal programs, such as EPA's revolving funds. 

Other EPA reductions Trump put forward include the elimination of funding for regional undertakings like the Great Lakes Restoration Initiative and similar efforts focused on the Chesapeake Bay.

"The Budget returns the responsibility for funding local environmental efforts and programs to State and local entities," the White House blueprint notes.

EPA administrator Scott Pruitt has indicated his priorities include the agency's Superfund program, which focuses on cleaning up badly contaminated land, and its Brownfields program, commonly used for redeveloping sites that were once used by industry.

The Brownfields program is not mentioned by name in the budget outline released Thursday. But the plan does call for reducing Superfund spending by $330 million, to around $762 million.

U.S. Conference of Mayors CEO and executive director Tom Cochran in a statement Thursday characterized the release of the budget as the first day of a "battle to truly put our people first." He added: "We will demand Congressional action against the ill-advised proposals contained in the Administration’s budget.”

Bill Lucia is a Senior Reporter for Government Executive's Route Fifty and is based in Washington, D.C.

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