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February 26, 2008
Special FY2009 Budget Edition
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In this issue:
F E D E R A L
F E D E R A L
F E D E R A L
F E D E R A L
F E D E R A L
F E D E R A L
F E D E R A L
F E D E R A L
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Last year, Congress rejected most of the specific cuts proposed by the administration, but ultimately was forced to accept the overall spending levels outlined by the White House. It is possible that Congress might opt to wait until after the November election to finalize FY09 spending. Following is an overview of the budget proposals for key planning and community programs, by department. (Note: All charts show funding levels in millions of dollars). |
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HUD: Budget Cut Reprise At HUD, it's déjà vu all over again. The budget proposal calls for a $600 million cut to Community Development Block Grants and a general restructuring of the program away from formula grants toward more limited assistance for economically distressed communities. If enacted, the CDBG proposal would represent a cut of nearly one-third since FY2003. The budget again proposes that Congress eliminate HOPE VI, Section 108 loan guarantees, the Brownfield Economic Development Initiative, and the Rural Housing and Economic Development program. Congress is almost certain to reject these proposals — again. The House of Representatives just voted to reauthorize the HOPE VI program. The budget maintains roughly current funding levels for project-based rental assistance and calls for increases in the HOME program.
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DOT: Transit Account Raided to Fill Highway Trust Fund Gap The Department of Transportation was among the hardest hit in the proposed FY2009 budget. The budget calls for DOT to receive $57.1 billion for FY2009, which is about a 10 percent cut from current funding levels. The rationale for the decrease is lower-than-anticipated gas tax receipts flowing into the trust fund. To address the projected shortfall, the budget cuts highway funding by more than 4 percent and would allow money to be moved from the mass transit account to help maintain the highway trust fund. The administration estimates that it will need to take about $3.3 billion from the mass transit account in FY2009. According to the American Association of State Highway and Transportation Officials, the deficit could reach $12 billion unless action is taken to shore up the trust fund. The proposed budget would fall short of the funding levels authorized in the 2005 transportation authorization legislation (SAFETEA- LU). Nonetheless, Transportation Secretary Mary Peters said that the department would spend the authorized levels over the life of the law. The administration is also asking Congress for $175 million for a program to combat highway congestion. Amtrak is again slated for a major cut in funding. Last year Congress provided $1.35 billion for Amtrak. This budget asks for $800 million, an amount insufficient to continue current levels of service.
1 Under the proposal transit funding could be shifted into the Highway Trust Fund if a shortfall arises. |
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EPA: Infrastructure Accounts Targeted for Cuts The administration proposes another decrease — to $7.1 billion in discretionary funding — for the Environmental Protection Agency. The EPA's budget has steadily declined since it received $8.4 billion in FY2004. The proposal includes a $134 million cut from the Clean Water State Revolving Fund, a low-interest wastewater loan program that helps states construct water treatment facilities. State and tribal assistance grants also would be cut. Other areas slated for reductions include targeted water infrastructure programs — which would drop from about $177 million in fiscal 2008 to $26 million in fiscal 2009 — and cleanup of leaking underground petroleum storage tanks. The popular brownfields program would also be cut slightly from $168.3 million to $165.7 million. On Capitol Hill, the Chairman of House Transportation and Infrastructure introduced legislation to formally reauthorize the brownfields program. The bill, HR 5336, extends the program to 2012, raises the authorization level for the site-assessment and cleanup program from $200 million to $350 million annually, and eliminates the 25 percent set-aside for petroleum-contaminated sites. The bill also adds a "ranking criterion" that favors funding of projects that implement green and energy-efficient building standards.
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Commerce: EDA Funding to be Cut 53 Percent The overall budget for the Department of Commerce would increase more than 18 percent under the outlines of the budget proposal. The majority of the increase is due to necessary preparations for the 2010 census. The proposal calls for a modest increase for the National Oceanic and Atmospheric Administration which would, in part, fund additional climate monitoring and adaptation work. The NOAA budget provides $981 million for weather and climate monitoring. Other Commerce programs do not fare as well in the budget. In particular, the Economic Development Administration would be cut by more than half, with most of the reduction occurring in public works funding. If approved, EDA funding would have been cut nearly 70 percent since FY2001.
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Interior: State LWCF Grants Eliminated The Interior budget proposal again calls for eliminating stateside Land and Water Conservation Fund grants, reducing federal land acquisition, and cutting historic preservation. Overall budgets for the United States Geographical Survey and the National Park Service are generally unchanged. The budget calls for a new "national water census" and new grants for "water conservation and basin studies." The budget continues to call for expanded oil and gas drilling, including in ANWR.
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Homeland Security: Local Grants, Hazard Mitigation Cut The budget proposes a $2.7 billion increase in funding for the Department of Homeland Security. Despite the overall increase, the budget seeks deep cuts for FEMA and a variety of state and local grant programs. Taken together, state and local programs administered by DHS would be cut by $2 billion, nearly half of current funding. The State Homeland Security Grant Program would receive $200 million, a cut of $750 million. Emergency management grants would be cut by 50 percent. The Pre-Disaster Mitigation Fund would be cut by $39 million to $75 million. Flood map modernization would receive $70 million less than current funding. The DHS budget calls for the same amount of funding for transit, passenger rail, and freight rail security that Congress appropriated in FY2007. The omnibus more than doubled that funding for FY2008. Among the hardest-hit programs would be transit security grants. Congress increased funding to $400 million in FY08, but the budget request seeks to cut that by more than half.
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Agriculture: Major Cut Proposed for Rural Development The budget calls for terminating or reducing funding for 33 USDA programs for a savings of $2.3 billion. The proposal includes $2.1 billion for rural development programs, a cut of nearly $300 million. Beyond the funding reductions, the budget anticipates accelerating a recent trend of shifting USDA community assistance programs from grants to loan guarantees. The budget is a mixed bag for land conservation programs. The most significant reduction is for the Wetlands Reserve Program, which will suffer a 60 percent reduction in funding since the administration is assuming it will reach its acreage enrollment cap with $181 million. The budget does not propose to fund additional watershed operations projects and instead redirects those funds to other agency programs. More funds are proposed for the Environmental Quality Incentives Program than were received in the FY2008 omnibus, but the budget proposes to permanently cancel mandatory funds in excess of $1.05 billion, which is what was allocated for 2009. The budget does not align with pending Farm Bill versions approved by the House and Senate and now in conference. The urban forestry program is slated for a severe cut in funding.
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