By The Conference Staff
February 20, 2006

The President’s budget request, which was submitted to Congress on February 6, calls for significant cuts in a number of key city priority programs, and for the elimination of several other programs that provide critical assistance to cities. For the nation’s mayors, perhaps the biggest concern is the proposed reduction in Community Development Block Grants (CDBG). The following is a brief summary of the cuts, eliminations and increases called for in the proposed FY 2007 budget with a focus on key programs of interest to mayors. A more detailed analysis of the budget arranged by major program area and the staff contact at the Conference of Mayors follows the summary.

CDBG, Housing Cuts

Under the President’s budget CDBG formula grants, which are allocated directly to cities and used to spur community and economic development, would be reduced by almost $1 billion, from $3.711 billion to $2.775 billion in fiscal year 2007. This would be a 25 percent reduction and would undoubtedly have a crippling effect on many local projects. Also the Public Housing Capital Fund, which provides funds to local public housing authorities for capital activities, would be cut by $261 million.

Homeland Security Cuts, Elimination of Justice Assistance

Funding for Homeland Security First Responder Programs would also be scaled back. State block grants, law enforcement terrorism prevention grants, high threat urban area grants and fire assistance grants would be cut altogether by almost $400 million, from $2.760 billion in the current fiscal year to $2.364 billion in FY 2007. Also several programs that award funds to state and local governments to fight crime and drugs would be eliminated. The Edward Byrne Memorial Justice Assistance Grant (which is currently funded at $322 million), the State Criminal Alien Assistance Grant program (funded at $405 million) and the Juvenile Accountability Block Grant (funded at $50 million) would all be eliminated.

Job Training Cuts, Elimination of Social and Community Service Block Grants

A total of $600 million would be cut by eliminating a number of Workforce Investment Act (WIA) grants. The President’s budget calls for a new consolidated state block grant that would give states broad discretion in redesigning job training and determining the local role in the new system. Funds would be made available by combining funds from several WIA programs with Employment Service, Work Opportunity Tax Credit Administration and Labor Market Information funds. The FY 2007 budget also calls for the elimination of Social Service Block Grants (currently funded at $1.7 billion) and the Community Service Block Grant program (funded at $636 million).

Amtrak, Airport Improvement Funds Cuts

Funds for Amtrak would be reduced by $394 million, from the current level of $1.294 billion to $900 million in FY 2007. Also, the Airport Improvement program, which provides grants for airport safety, capacity and noise mitigation would be cut by $765 million, from the current level of $3.515 billion to $2.750 billion.

Cuts in Clean Water Revolving Loan Funds

The new budget calls for a $212 million cut in the Clean Water Revolving Loan Funds, which provides funds to assist local governments in repairing and replacing their aging water infrastructure systems. Funds for this program have been declining since FY 2004 when it was funded at $1.350 billion. Currently the program is funded at $900 million and the new budget is proposing to reduce it to $688 million in FY 2007.

Proposed Increases

The President’s budget calls for increases in several key programs. Homeless Assistance Grants would be increased by $209 million, the Low Income Heating and Energy Assistance Program (LIHEAP) would be increased by $621 million, the Federal Emergency Management Agency (FEMA) pre-disaster mitigation program would be increased by $100 million and the Secure Borders Initiatives would provide a total of $459 million to hire 1,500 new border patrol agents, and $100 million to enhance electronic surveillance and operational response capability. Another $420 million would be provided to facilitate the detention and removal of illegal aliens.

Detailed Analysis

ARTS, PARKS AND TRAVEL (Staff Contact: Tom McClimon)

Arts, Humanities, and Museums – The National Endowments for the Arts and Humanities would retain approximately the same level of funding as in the current fiscal year. The National Endowment for the Arts would be funded at $124 million and the National Endowment for the Humanities at $141 million. Grants for museums at the Institute of Museum and Library Services would remain the same at the current level of $36 million.

Parks – The Administration is proposing no funding for the state assistance program of the Land and Water Conservation Fund and the Urban Parks and Recreation Recovery Program. This continues the pattern from last year. Both programs currently receive little or no funding.

Travel and Tourism – The Administration is proposing no additional funding for the promotion of an international destination marketing campaign to attract foreign visitors to the United States. Congress appropriated $5 million for such an effort in the current fiscal year budget.

COMMUNITY DEVELOPMENT AND HOUSING (Staff Contact: Eugene Lowe)

Community Development Block Grants (CDBG) – Formula grants, funded at $3.711 billion in FY 2006, would be cut to $2.775 billion in FY 2007. (The Administration proposed $2.975 billion for formula grants but will use $200 million for competitive challenge grants to communities expanding homeownership). CDBG would be reformed through legislation that will authorize a new allocation formula and the bonus fund component. Several HUD programs would be consolidated into CDBG, including Brownfields Redevelopment grants, Rural Housing and Economic Development, and Section 108 Loan Guarantees. HUD will work closely with the Department of Commerce to implement the goals and measures of the Strengthening America’s Communities Initiative (SACI) that will apply to all federal community and economic development programs.

HOPE VI – The Administration proposes the termination of this program, and rescinds the $99 million appropriated to the program in FY 2006. The program provides assistance for the revitalization of severely distressed public housing.

Public Housing Capital Funds – Funds for public housing authorities to carry out capital activities are cut from $2.439 billion in FY 2006 to $2.178 billion in FY 2007. Public Housing Operating Funds are level funded at $3.564 billion in FY 2007.

The Housing Choice Voucher – Funding is increased for tenant based section 8 from $15.808 billion (last year’s level) to $15.920 billion in FY 2007. The Administration will continue to promote the State and Local Housing Flexibility Act of 2005 and expand the “dollar-based” approach to allow public housing authorities to have more flexibility to address local needs.

Homeless Assistance Grants – The Administration proposes to increase homeless assistance from last year’s funding of $1.327 billion to $1.536 billion in FY 2007. The Administration will propose consolidation of the HUD homeless programs that will provide more flexibility to address local needs.

The HOME Investment Partnerships Program – This program would be increased from $1.757 billion to $1.917 billion. One hundred million dollars (a $75 million increase) of the HOME funding is for the American Dream Downpayment Act program which provides assistance to first time homebuyers.

The Section 202 Elderly Housing Program, and the Section 811 Disability Housing Program – Both elderly and disability housing are cut in FY 2007. Elderly housing is reduced from $735 million to $545 million; disability housing, from $237 million to $119 million.

HOPWA – Funds for Housing Opportunities for Persons with AIDS (HOPWA) would be increased from $286 million to $300 million. The Administration also proposes to change the formula to distribute funds on a more equitable basis.

HEALTH AND HUMAN SERVICES (Staff Contact: Crystal Swann)

HIV/AIDS Programs – The Administration has requested $1 billion for domestic HIV/AIDS programs, an increase of $86 million, to develop, implement and evaluate effective prevention programs.  Of this amount, $740 million will be directed towards prevention initiatives.   The FY 2007 funding for the Ryan White CARE Act was increased by $95 million over FY 2006 funding levels.  Of the $95 million, $70 million will be directed to the state drug waiting lists and the remaining $25 million will be used to “expand outreach efforts by providing new HIV community action grants to intermediaries including faith and community based organizations.  The $95 million Ryan White increase and the $93 million in new Centers for Disease Control and Prevention funding will be combined to create a new domestic HIV/AIDS testing and outreach initiative totaling $188 million.

Nutrition Programs – The budget calls for a $659 million cut over five years to the Food Stamp program. Additionally, the Administration proposes the elimination of the Commodity Supplemental Food Program and Commodity and Nutrition Program.

LIHEAP – The Administration proposes $2.700 billion for the LIHEAP program in FY 2007, a $621 million increase over the FY 2006 funding level. In a separate agreement, the Northeast and Midwest Republicans are working on an agreement to add an additional $1 billion to $2 billion more in LIHEAP. The low-income heating and energy assistance program provides critical assistance to many low-income individuals. Chronic Disease Prevention and Health Promotion – The budget proposes $819 million, a decrease of $20 million in FY 2007, for chronic disease prevention and health promotion activities.

Bioterrorism – Included in the Centers for Disease Control and Prevention budget is $824 million for state and local preparedness efforts, which is level funding at the FY 2006 level. Already appropriated through emergency funding is $350 million for local and state preparedness efforts.

Pandemic Influenza – In a one-time emergency funding bill, the Administration appropriated $188 million to CDC to enhance pandemic preparedness efforts to include intensifying surveillance, containment, and outbreak response measures, establishing additional laboratory capacity, and increase of quarantine stations.

Eliminated HHS Programs – The Administration proposes the elimination of the Community Services Block Grant (CSBG), the Preventative Health and Health Services Block Grant, the Commodity Supplemental Food Program, and the Commodity and Nutrition Program.

HOMELAND SECURITY AND PUBLIC SAFETY (Staff Contact: Ed Somers)

Homeland Security

First Responder Programs – Overall funding in the four big first responder grants programs (state block grants, law enforcement terrorism prevention grants, high-threat urban area grants, and fire assistance grants) would be cut by almost $400 million (more than a 14 percent cut), down from $2.760 billion to $2.364 billion. Within this total, increases are provided for discretionary high-threat programs, but major cuts are made in block grants. And, fire assistance grants are more than cut in half. In addition, port security, rail/transit security and bus grants would be rolled-up into a new discretionary “Targeted Infrastructure Protection” program to be controlled by the Secretary. If these recommendations are adopted by Congress, key funding would be cut by 30 percent from just two years ago.

FEMA/Disaster Mitigation – The budget requests a $100 million increase for the FEMA pre-disaster mitigation program that is designed to reduce the risk to populations, structures and critical infrastructure from natural disasters.

Secure Border Initiative – There are increases for border security under the recently announced Secure Border Initiative. Among many key federal programs, $459 million is provided to hire, train and equip an additional 1,500 new Border Patrol Agents, and $100 million to enhance electronic surveillance and operational response capability. There is also $420 million for more than 6,000 new detention beds to hold illegal aliens, end the practice of “catch and release,” and facilitate the detention and removal of an additional 100,000 apprehended aliens annually.

Transportation Security (Staff Contact: Ron Thaniel)

Non-Aviation Transportation Modes – Despite the increasing number of terror attacks on bus and rail systems worldwide, the FY 2007 budget provides the Transportation Security Administration (TSA) with only $37 million for non-aviation security. Furthermore, the budget eliminates dedicated DHS funding in the FY 2006 appropriations law for non-aviation modes by lumping them into the Targeted Infrastructure Protection (TIP) grant program whereby bus and rail will have to compete with ports and other critical infrastructure sectors for a total of $600 million in funding for FY 2007.

Aviation Security – The budget is requesting $4.700 billion for aviation security, including $3.700 billion for aviation screening operations and $690 million for the purchase, installation, and maintenance of baggage screening devices, including in-line systems. The budget also provides more than $80 million for emerging technology at passenger checkpoints. The FY 2007 budget proposes to replace the two-tiered aviation passenger security fee schedule with a single flat security fee of $5.00 for a one-way trip. This new fee is expected to increase collections by an additional $1.300 billion, for a total of $3.300 billion. The revenue generated by aviation security fees will cover about 70 percent of core aviation security costs.

Coast Guard – The budget includes $8.420 billion for the Coast Guard.

Public Safety

COPS -- The budget would continue the cutting of COPS funding, down from $262 million to $102 million. There is once again no funding for hiring programs, and gangs, technology, and interoperability grants would be eliminated within COPS.

Justice Assistance Grant – The budget would eliminate the Edward Byrne Memorial Justice Assistance Grant program – a cut of $321.5 million for cities and states. The JAG program was created at the request of the Administration by combining the Local Law Enforcement Block Grant and the state-based Byrne Formula Grant program.

Other Justice Programs – The budget would eliminate the State Criminal Alien Assistance Program ($405 million) and the Juvenile Accountability Block grant ($50 million). The Administration is seeking increases for DNA analysis and reducing or eliminating the backlog ($175 million), and a major increase for gun-crime prosecutions ($58.5 million). There is also $15 million for a gang technical assistance program. Many of these programs are being coordinated under the Administration’s Project Safe Neighborhoods program.

ENERGY (Staff Contact: Debra DeHaney-Howard)

The President’s FY 2007 budget calls for $23.600 billion in spending for the Department of Energy (DOE). This is a $500 million increase from the FY 2006 budget request.

Renewable Energy – The budget calls for $1.200 billion for energy efficiency and renewable energy spending to develop diverse sources of energy and related technologies to meet the need for clean, reliable, and affordable energy. The FY 2007 budget request for solar energy is $148.4 million, a $65.3 million increase from FY 2006. It also proposes $43.8 million for wind energy, a $5 million increase over the FY 2006 appropriation. Further, it calls for $149.7 million for the Biomass program, an increase of $59 million. The budget also requests $195.8 million for Hydrogen Technology, a $40.2 million increase over the current fiscal year.

Weatherization Assistance Grants – The budget calls for $164.2 million in spending for weatherization assistance grants, which represents a decrease of $78.4 million from the $242.6 million available in FY 2006.

Vehicles Technologies – A total of $166.0 million is included in the President’s budget for the Vehicles Technologies Program (FreedomCar, Hybrid Technology, Plug-in Hybrids). This amount is $16.1 million less than the FY 2006 appropriation.

Nuclear Waste Repository (Yucca Mountain) – Funds for the Nuclear Waste Repository, Yucca Mountain, would be funded at $544 million, a $49.5 million increase from the FY 2006 appropriation.

EDUCATION (Staff Contact: Josie Hathway)

For FY 2007, President Bush is requesting $54.400 billion in discretionary appropriations for the Department of Education, a decrease of $3.100 billion, or 5.5 percent, from the FY 2006 level. Despite the proposed decrease, discretionary appropriations for the Department will have grown by almost $12.200 billion, or 29 percent, since FY 2001. One of the major priorities of this proposed budget is the agency’s part of the President’s American Competitiveness Initiative to strengthen math and science instruction in K-12 schools. Also, there is a revised High School Reform Initiative. Funding for the new initiatives comes from the proposed elimination of 42 programs including Vocational Education State Grants and National Programs, Tech-Prep, GEAR UP, Upward Bound, Talent Search, Education Technology grants, Arts in Education and Safe and Drug-Free Schools and Communities State Grants.

Elementary and Secondary Education Act, Title I – The President proposes to level fund Title I at $12.700 billion to meet the rigorous accountability and teacher quality requirements of the No Child Left Behind Act (NCLB). The Administration is also requesting for the first time $200 million for Title I School Improvement Grants to support state leadership in helping turn around low-performing schools and school districts and provide flexibility to use formula grants to establish or expand comprehensive, statewide systems of support to school districts to meet NCLB proficiency goals.

American Competitiveness Initiative to strengthen math and science instruction includes: