by Conference Staff
January 14, 2008

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After vetoing the Labor, Health and Human Services appropriations bill and threatening to veto any others that exceeded the amounts in his FY 2008 budget, President Bush succeeded in blocking Democratic leaders in Congress from adding $23 billion on top of the $933 billion he requested for the 12 appropriations bills that fund federal discretionary programs. Due to disagreement between the President and Congress over funding levels, only the defense appropriations bill cleared Congress and was signed into law as a separate free-standing bill. The others were grouped together in an omnibus spending bill and signed into law on December 26.

Unfortunately, a number of key programs that support local government efforts were significantly cut, including Community Development Block Grants, HOPE VI public housing, community-oriented policing (COPS), justice assistance grants, the Clean Water State Revolving Loan Fund and transit programs. By contrast, several key programs received increases over last year’s funding levels, and, in some cases, over the amount requested by the President. These include homeland security, workforce investment and job training programs, Pell Grants, Title I Education Grants and the National Endowment for the Arts.

Below is a detailed summary of how key programs fared in the final FY 2008 omnibus appropriations bill. For budget information on more programs, please go to our website at usmayors.org for a comprehensive budget chart which compares final funding in the FY 2008 omnibus bill with the President’s FY 2008 Budget requests and last year’s funding levels.

The final funding bill significantly cuts the Community Development Block Grant (CDBG) formula program from $3.723 billion (approved in the Conference Report on 11/7/07) to $3.593 billion. The program was funded at $3.711 billion in FY 2007. The HOME Investment Partnerships formula program was also cut from $1.702 billion in the Conference Report to $1.629 billion in the final spending bill. The program was funded at $1.690 billion last year. HOPE VI, the severely distressed public housing program, was also cut. The Conference Report funded the program at $120 million but the final spending level for the program is $100 million for FY 2008, which is tantamount to the same level as last year’s funding level of $99 million.

The Section 8 Housing Choice Voucher program was also funded less than the level approved in the Conference Report, but still was $471 million over last year’s funding. The final bill funded Section 8 at $16.391 billion. FY 2007 funding for the program was $15.920 billion.  Public Housing Operating and the Public Housing Capital Fund were not reduced from the Conference Report funding levels in the final bill. Moreover, public housing operating funds was increased over last year’s funding level of $3.864 billion to $4.2 billion in FY 2008. The final spending bill also provides $180 million for mortgage foreclosure assistance. The money will go to housing counseling agencies to assist homebuyers faced with foreclosure to modify or restructure their mortgages.

In a surprise move, the final funding bill cut one of the key state and local law enforcement programs by 67 percent. The Byrne Memorial Justice Assistance Grant (JAG) Program went down from $520 million last year to $170 million for 2008. Going into final negotiations, this important program had been slated for funding increases at $600 million in the House bill and $660 million in the Senate bill. No explanation was given for the tremendous cut other than the need to meet the overall budget requirements set by the Administration.

Funding for the COPS hiring program was also far less then expected. The House bill had provided $100 million for COPS hiring and the Senate $110 million, but the final bill contains only $20 million for the hiring grants. Instead, a 45 percent increase was provided for COPS technology and interoperability grants and earmarks. Also contained in the final bill is an additional $20 million for a new violent gang and gun crime reduction program under COPS, $410 million for the State Criminal Alien Assistance Program, and $100 million for security at the two national political conventions.

Overall, key city law enforcement programs received $257 million less than in FY 2007, but $798 million more than requested by the Administration. Also, the final bill does not contain the “sanctuary city” language which had been included in the House bill and could have threatened funding for some cities.

The bill provides almost $850 million more than in FY 2007 for key first responder programs, and almost twice as much funding as requested by the Administration. Major increases were provided for transportation and port security, with both areas given $400 million. There were also increases in fire grants, Emergency Management Performance Grants, and $50 million for interoperable communications. These funding increases were authorized in the 9/11 Commission Bill signed into law last year and supported by the USCM Mayors’ 10-Point Plan.

Like prior years, spending authority to the states under the core federal highway programs fared much better than other transportation sectors and far outpaced other domestic spending accounts. A seven percent increase in highway funding was aided by the guaranteed spending features of the current federal surface transportation law, SAFETEA-LU, and a broader commitment to bridge rehabilitation initiated after the catastrophic I-35 bridge collapse in Minneapolis. In FY 2008, States will receive their SAFETEA-LU established obligation limit of $40.2 billion, along with an additional $1 billion for bridge rehabilitation as well as $631 million in supplemental obligation authority (i.e. RABA). With these adjustments, states will receive $41.83 billion in obligation authority, up considerably from the FY 2007 level of $39.1 billion.

In contrast, transit programs administered by the Federal Transit Administration (FTA) are funded at $9.49 billion in FY 2008, about $240 million below the SAFETEA-LU-guaranteed spending level. The legislation includes a special provision prohibiting FTA from finalizing rules governing how local areas qualify for additional federal funding for rail transit projects (e.g., light rail, commuter rail, streetcars and trolleys) under the New Starts/Small Starts program. This prohibition, effective FY 2008, responded to concerns voiced by transit providers, cities and others that these pending rules failed to conform to Congressional intent as set forth in SAFETEA-LU.

Amtrak, the nation’s intercity passenger rail corporation, is slated to receive $1.325 billion, slightly higher than last year’s level of $1.29 billion. In addition, the legislation provides $30 million for federal/state capital matching program to support investment in new intercity passenger rail projects.

The Federal Aviation Administration’s Airport Improvement Program (AIP), which assists capital improvements at the nation’s airports, is funded $3.5 billion, the same level as the previous year. Budgetary commitments to aviation and passenger rail are expected to rise once Congress completes work on separate Amtrak and FFA renewal bills, which are slated for action this year.

The omnibus bill maintains the current funding level for the Social Services Block Grant (SSBG) which funds child care, foster care and other child welfare services, meals on wheels, adult day services for the elderly, and other services. In his FY 2008 budget request, the President proposed eliminating the Community Services Block Grant program which funds community action programs and other agencies that provide home energy aid, weatherization, job training, transportation, and/or administer Head Start programs and other services.

The bill provides increased funding for the Centers for Disease Control and Prevention, the Substance Abuse and Mental Health Services Administration and the Low Income Energy Assistance Program (LIHEAP). For LIHEAP, the bill provides a $788 million increase over the President’s budget request. Though the increases in many cases are inflationary, they nonetheless represent more money than proposed in the President’s budget.

The discretionary total for the Labor-HHS-Education portion of the bill is $144.8 billion in funding, approximately $4 billion more than requested by the President, but only slightly more than the $144.5 billion appropriated in FY 2007. The FY 2008 budget for the Employment and Training Administration (ETA) is actually $20 million above the FY 2007 levels, in large part due to this year’s inclusion of earmarks.

The final bill rejected the Administration’s proposed cuts to the Workforce Investment Act (WIA) programs by providing $700 million above the President’s requests. In addition, the bill includes language preventing re-designation of local areas, changes to the definition of administrative costs, and regulatory changes to WIA until it is reauthorized. The bill does, however, include a $250 million rescission of 2005 and 2006 WIA unexpended balances carried into program year 2007 for the Youth, Adult and Dislocated Worker formula programs in excess of 30 percent. At the request of a State, the Secretary of Labor may apply a portion of the State’s share of the rescission to funds “otherwise available” to the State for such programs during program year 2007. In addition, the Secretary is authorized by Congress to waive such requirements as may be necessary to carry out the instructions related to the rescission in House Report 110-424.

For Department of Education programs, the omnibus bill includes:

• $16 billion in Pell Grants for low- and middle-income college undergraduates, a 16.7 percent increase over FY 2007 when funding from both the appropriations bill and the separate College Cost Reduction and Access Act (approved in September) are combined.

• $13.9 billion for Title I grants to local education agencies, an 8.3 percent increase over FY 2007;

• $11.8 billion for special education grants;

• $2.94 billion to help states improve the quality of their teachers; and

• $1.27 billion for career and technical education grants, a small decrease from FY 2007.

The Clean Water State Revolving Loan Fund, a major means of financial support for local wastewater treatment facilities, saw a reduction of nearly $400 million, from $1.084 billion in FY 2007 to $689 million in the FY 2008 omnibus spending bill. The Administration requested $688 million while the House proposed $1.125 billion. The Drinking Water State Revolving Loan Fund fared better, receiving $829 million which is down from $837 million available in FY 2007. The Administration and the House both supported $842 million for the program.

The Superfund program remained relatively stable, down to $1.254 billion from $1.255 billion in FY 2007. Brownfields funding grew slightly, to $93.5 million, up from $89.3 million in the President’s budget, and $89 million in FY 2007.

Air toxics and air quality programs received a slight cut, from $192 million in FY 2007 to $186 million in FY 2008. Climate protection programs, however, received a bump, from $13 million to $18 million.

The final spending bill cut overall funding to the Environmental Protection Agency by 1.56 percent, or $264 million below FY 2007 levels.

The bill provided about $145 million for the National Endowment for the Arts — a $20 million increase over last year’s funding. This represents a 16 percent increase — the largest given to the agency in the past 24 years.

The National Endowment for the Humanities will receive $145 million, an increase of about $4 million. The Office of Museum Services within the Institute for Museum & Library Services will receive about $31 million which is a slight decrease from the previous year.