Below is material CCM received from the National League of Cities (NLC) on President Bush’s federal budget proposal and its impact on towns and cities. CCM is working to obtain Connecticut-specific information, and will forward that to you once it is received.

The $2.9 trillion budget for fiscal year 2008 submitted by President George W. Bush would balance the budget by 2012, while continuing to cut taxes by eliminating or severely reducing billons of dollars in spending for programs critical to towns and cities.

Funding for Community Development Block Grant (CDBG), transit programs, first responders, emergency management training, the COPS program, and Amtrak would be reduced or eliminated.

The Administration’s budget significantly reduces federal funds available for the critically important Community Development Block Grant (CDBG) program – one of the most flexible and successful programs used by cities – large and small – to improve their communities. However, the budget provides for increased funding for the Section 8 voucher housing program and the increases proposed in other areas.

The budget requests $145.2 billion for the war in Iraq and Afghanistan for fiscal year 2008 in addition to a supplemental request for $99.6 billion for the rest of this fiscal year. In order to balance the budget by 2012, spending for nonmilitary and homeland security programs would grow by 1%. Even in the public safety and homeland security area, funds to help towns and cities combat violent crime, prepare for and respond to emergencies would be cut back from current levels.

With the submission of the President’s budget, Congress will begin the 2008 budget cycle with hearings on spending requests before the Appropriations Committees in the House and action on an overall spending package by the Budget Committee. (Congress is still completing action on the fiscal year 2007 spending bill. Fiscal year 2007 began on October 1, 2006 but the last Congress left with a continuing resolution that funded federal programs until February 15.)

Please see the following preliminary analysis of selected programs of interest to towns and cities:

EFFECTS ON PROGRAMS OF IMPORTANCE TO TOWNS AND CITIES

Department of Housing and Urban Development

The President’s proposal renews previous themes of consolidation and reduction in the HUD budget, while allowing for modest increases to a select few programs. Among the programs that would benefit under the FY08 proposal include:

• The HOME Investment Partnership program would increase $200 million to $2 billion;
• The Homeless Assistance Grants program would increase $170 million to $1.5 billion; and
• The Section 8 tenant-based voucher program would increase $80 million to $16 billion, an amount HUD assumes to be sufficient to renew all existing housing vouchers.

The budget proposal cuts the Community Development Block Grant program by $735 million for a total of $2.97 billion. Of that amount, $200 million would be set-aside to fund competitive challenge grants. Other programs in the Community Development Fund, including Brownfields, Economic Development Initiative grants, and Rural Housing and Economic Development would by consolidated into CDBG, effectively eliminating them.

Department of Education

The Administration proposal cuts $1.5 billion from the funding levels of the House-passed 2007 Continuing Resolution and eliminates 44 discretionary education programs. These include Federal Supplemental Educational Opportunity Grants, Leveraging Education Assistance Grants, Education Technology State Grants, school counseling, Even Start, mentoring, parent information and resources centers and dropout prevention.

No Child Left Behind, which expires at the end of September, would receive $13.9 billion, an 8.6 percent increase over the fiscal 2006 spending level for expanding testing into high schools. The budget also proposes $500 million for a new grant program to help chronically underperforming schools and would double, to $199 million, an incentive program for teachers that was funded at $99 million in fiscal 2006. IDEA, Individuals with Disabilities Education Act, would be reduced $291 million below the recently adopted 2007 Continuing Resolution-funded level of $10.7 billion, and Head Start would be funded at $6.78 billion, $107 million below the 2007 CR funded level.

Department of Health and Human Services

The budget for the Department of Health and Human Services would see drastic cuts for preventive health and health services and social programs, with a sharp increase for Centers for Disease Control (CDC) infectious disaster programs. The proposal includes elimination of a $99 million block grant under the Centers for Disease Control and Prevention (CDC) for preventive health and health services, while funding for a new CDC pandemic flu initiative of $1.8 billion.

A social services block grant would be cut by nearly $1 billion, to $1.2 billion; and community-service programs, including the $630 million Community Services Block Grant, would be eliminated due “to “poor performance.” Budget documents note that other programs “can achieve greater results and better focus on communities most in need of assistance.”

Spending programs providing home energy subsidies for low-income families, the Low Income Heating and Energy Assistance Program (LIHEAP), would be funded at $1.8 billion, a nearly $400 million cut from the levels adopted in the FY 2007 continuing resolutions.

Department of Homeland Security

The White House’s $34.6 billion Homeland Security budget request for fiscal 2008 would slash state and local grant programs while increasing support for border security programs. Funding for the department’s first-responder grant programs, including grants for states, municipalities and local law enforcement agencies and funding for training and exercises would be dramatically reduced. Overall, funding for state and local programs would drop to $1.9 billion from last year’s total of $2.7 billion, a proposed 63% reduction.

Funding for the port security grant program, enacted last year by Congress, would receive $210 million in the president’s budget proposal, down from the $400 million authorized by Congress. Federal programs for surface transportation security would receive $41 million in the budget proposal, only a $4 million increase from fiscal 2007 spending. A new $1 billion grant program for interoperable communications would be jointly administered by the FCC and DHS and would be funded through the sale of electromagnetic spectrum. Funds would then be available for towns and cities to use for 700 MHz communications equipment.

Department of Justice

Federal assistance to state and local law enforcement would be cut by more than half in the Bush Administration’s fiscal 2008 Justice Department budget request, despite the recent surge in urban violent crime.

Unlike in the past, however, the Bush administration has not proposed eliminating the Byrne grant program for state and local governments. Instead, the president wants to consolidate several separate law enforcement grant programs — which totaled more than $2 billion in fiscal 2006 — into four grant programs that would total $1 billion in new budget authority. The original COPS program that funded local law enforcement programs, is proposed to be cut $510 million below the $542 million in funds adopted as part of the 2007 Continuing Resolution to $32 million.

The 2008 budget proposes to combine 70 distinct programs into four "flexible" and competitive grant programs including the Byrne JAG program which has been expanded to encompass funding for methamphetamine clean up and enforcement (this was formerly in the 2006 COPS program), drug courts, firearms crime prosecution, efforts to combat domestic trafficking and other priorities based on local needs.

The budget also proposes eliminating funding for the State Criminal Alien Assistance Program (SCAAP), which has strong state, local and Congressional support.

Department of Transportation

The FY 2008 budget requests $67.4 billion for transportation programs. The spending request would cut Amtrak funds by $518 million, fund the federal highway program at SAFETEA-LU authorized levels but cut transit substantially below authorized levels.

The budget request also proposes $39.6 billion in federal highway funding for fiscal 2008, the amount called for under the 2005 highway law (PL 109-59) and $500 million more than the House-passed continuing resolution would provide for 2007. However, the Administration’s budget proposal does not honor several funding guarantees enacted as part of SAFETEA-LU. Transit funding enacted as part of SAFETEA-LU set spending at $9.7 billion. The DOT budget would provide only $9.4 billion for transit programs. SAFETEA-LU also established a new mechanism for funding highway programs, the Revenue Aligned Budget Authority (RABA), which allowed highway funding to exceed the authorization if gas tax revenues surpassed projections. Based on these calculations, the states were guaranteed an additional $631 million RABA adjustment in fiscal 2008, but this amount was not included in the president’s budget. Amtrak would receive $800 million in direct payments, plus another $100 million for new matching grants to states for intercity passenger rail projects, a cut from the House-passed continuing resolution level of $1.3 billion

DOT has requested an additional $175 million for an urban congestion initiative to fund local pilot programs such as rush hour toll measures and staggered work hours. The budget again calls for authority to set fuel-economy standards for passenger cars based on vehicle size and weight, known as the Corporate Average Fuel Economy (CAFE) standard, although Congressional leaders continue to assert their authority over these standards rather than leave it up to the Administration.

Environmental Protection Agency (EPA)

President Bush’s budget would continue the Administration’s trend of slashing EPA funding, with the bulk of the proposed cuts directed toward a popular clean-water infrastructure program. The EPA would receive $7.1 billion, a $500 million cut compared with fiscal 2006 funding (PL 109-54), and an $800 million reduction below fiscal 2005 funding (PL 108-447).

The Clean Water State Revolving Fund has been slated to be eliminated by the end of 2009. The program would receive $688 million in fiscal 2008, a drop of about $312 million from the fiscal 2007 spending package (H J Res 20) awaiting Senate action. The Administration’s position it that it wants to allow for more private investment to help with water infrastructure funding.

The Administration did not seek increased funding for the EPA’s climate-change activities, requesting $216 million on climate research and $439 million on programs such as voluntary industry partnerships — nearly level funding from fiscal 2006.

Department of Energy

Overall, the DOE budget would receive a spending increase of less than 3 percent over enacted levels. Savings on environmental cleanup programs would finance major increases in programs to develop alternative fuels highlighted by the President in his State of the Union Address. The Administration also proposed reducing spending on weatherization projects to $205 million from $318 million in fiscal 2006, according to Energy Department documents. The program supports state and local efforts to help families insulate their homes to reduce heating and air-conditioning bills.

We will keep you apprised of further developments.

CCM is sponsoring a breakfast meeting with the Connecticut Congressional Delegation and Connecticut municipal officials on Wednesday, March 14, 2007, in Washington, DC. The meeting caps several days of policy discussion and action at the National League of Cities’ Congressional City Conference (NLC CCC). The purpose of the breakfast meeting is to discuss the federal budget and its impact on Connecticut towns and cities, as well as other issues of concern. CCM urges you to attend the conference and breakfast meeting. For more information on the NLC CCC, please call Quanette Rhodes at (203) 498-3000. * * * If you have any questions on this bulletin, please contact Jim Finley, CCM Associate Director for Public Policy & Advocacy; or Ron Thomas, CCM Manager of State and Federal Relations, at (203) 498-3000.