By Conference Staff
December 13, 2004

Congress has adopted a conference agreement on an omnibus spending package for Fiscal Year 2005 that includes funding for nine unfinished appropriations bills (funding for homeland security had been previously approved by Congress).

The bill includes a number of cuts in key city programs including CDBG and COPS, and an additional across the board cut of 0.83 percent will be applied to all discretionary programs (the numbers below do not reflect this additional cut). Download the complete budget chart here.

Community Development and Housing

The Community Development Block Grant (CDBG) and HOME Investment Partnership programs were cut, as were most other housing programs. CDBG formula grants were cut by $200 million Ð from $4.35 billion to $4.15 billion. The HOME program was cut by $100 million to $1.9 billion, which includes $50 million for ADDI and $42 million for housing counseling assistance.

Although Section 8 rental assistance was funded at $20.226 billion, which is an increase over last year's funding of $19.3 billion, the Council of Large Public Housing Authorities has said that Avarious changes in the account will likely result in a reduction in assistance available for the tenant based-voucher program.

The public housing capital fund was decreased from $2.695 billion to $2.6 billion, and HOPE VI received only $144 million (as opposed to the nearly $600 million sought by mayors). Public Housing Operating funds were reduced by $994 million as a result of the synchronization of the funding cycles of all public housing authorities to a calendar year. This is a one-time savings in the public housing operating account.

Native American Housing Block Grants, Section 202 elderly housing, Section 811 disabled housing, homeless assistance grants, Housing for Persons with AIDS (HOPWA), Brownfields Redevelopment, and Lead-Based Paint Hazard Reduction programs were all cut.

Local Law Enforcement

In a drastic move, the bill virtually eliminates funding for COPS hiring programs, providing only $5 million for general hiring and $5 million for school resource officers. The Senate had approved $180 million for this program, and the House $113 million, but the Administration had requested that it be eliminated, which is what the final bill all but does.

Additional funding is provided for other COPS programs including $100 million for interoperability grants, and funding for technology and meth earmarks, and several other programs.

The bill also eliminates the Local Law Enforcement Block Grant (LLEBG), and creates a new Justice Assistance Grant program sought by the Administration by combining the LLEBG and the state-based Byrne grant. Funding for the combined program is cut nearly 54 percent to $634 million. Local funding under the new program for LLEBG related activities (40 percent of total) should be approximately $214 million after earmarks.

Transportation

With the reauthorization of TEA-21 stalled, the spending bill offers some good news for transportation programs with a $1.8 billion, or 2 percent increase above the Administration's fiscal year 2005 request. The increase is largely going to record funding for the highway program at $34.7 billion, up from $33.6 billion in fiscal year 2004. The spending bill provides $7.6 billion for transit, an increase of $378 million over fiscal year 2004. Within the transit account, New Starts received a 9.2 percent increase or $1.4 billion.

Fixed-Guideway Modernization increased by .4 percent to $1.2 billion in the 2005 spending bill.

Amtrak received $1.2 billion in the 2005 spending bill. This is roughly the same amount as enacted in 2004. The $1.2 billion is 35 percent more than the Administration had requested. Of note, the spending bill requires Amtrak to work out a 5 year schedule for repayment of the June 2002 U.S. Department of Transportation (DOT) $100 million loan. The bill also directs the DOT to implement procedures for states to follow if they want to privatize portions of Amtrak's routes.

The Federal Aviation Administration received $13.6 billion or $335 million below the Administration's request and $219 million less than enacted in the fiscal year 2004 spending bill. Of noteworthy importance to the mayors, $3.5 billion is available for the airport improvement program.

Workforce

Congress rejected a 25 percent cut in youth formula funding that had been requested by the Administration, and was opposed by the Conference of Mayors.

The measure provides almost level funding for most workforce programs, including adult and youth formula programs, and an increase in the dislocated worker program and Job Corps.

The Administration secured the $250 million for the Community College initiative to fund partnerships between community colleges and employers in high-demand industries, half of which will be diverted from the Secretary's discretionary reserve fund for dislocated workers. Also included in the spending measure is $20 million for the Administration's proposed Prisoner Re-Entry program which allows faith-based groups to receive funds to help offenders make the transition back to society.

The bill did not provide a consolidated state block grant proposed by the Administration, which would have combined the adult, dislocated worker and employment services funding into a single state block grant. The measure does not fund Personal Reemployment Accounts (PRAs). The Administration had requested $50 million for a PRA pilot program for states to offer long-term unemployment insurance recipients a $3,000 account to purchase job training or other services to help them reenter employment. Department of Labor has proceeded with a PRA pilot program using the Secretary's discretionary account in Florida, Idaho, Minnesota, Mississippi, Montana, Texas and West Virginia.

The bill did not fund a continuation of the Youth Opportunity Grant program. The five year pilot program which started in 2000 ends next year.

Environment

Congress approved an $8.02 billion budget for the U.S. Environmental Protection Agency (EPA), a cut of $342 million. This is the first budget cut in recent years for EPA, but it is not as large of a cut as originally proposed by the Administration.

Among the largest of EPA's budget cuts was the Clean Water State Revolving Loan Fund (CWSRF), which was cut by $251 million from an FY'04 level of $1.3 billion to $1.09 billion. Most of CWSRF cuts came from specific earmarks for drinking water and wastewater infrastructure projects. The Administration had asked lawmakers to eliminate all earmarks (approximately $500 million). In previous years, Congress has resisted all budget cuts aimed at water programs. Congress reduced slightly the money allocated for the Drinking Water State Revolving Loan Fund to $843 million from last year's level of $850 million.

Congress also kept relatively level funding for EPA's Superfund account at $1.246 billion, which is $11 million below FY Ô04 levels. The EPA's Brownfield's money targeted for assessments and cleanups saw a slight cut of $3 million to $90 million. Money for State Voluntary Cleanup Programs remained level at $50 million.

Health

The health budget includes $1.4 billion more in discretionary funds than the Administration requested, in part to expand health care programs for veterans. Federal expenditures for veteran health care programs will increase by $1.5 billion in FY 2005 to $28.3 billion, which does not include an additional $2 billion in expected fee collections.

The part of the bill that would finance the Food and Drug Administration and most U.S. Department of Agriculture operations would provide $83.3 billion for FY 2005 Ð which would include $17 billion in discretionary funds, a 0.7 percent increase from FY 2004 Ð but lawmakers removed a provision that would have helped facilitate the reimportation of prescription drugs from Canada.

The Ryan White AIDS program received a $45 million ($2 billion) increase over FY 2004 appropriations and the Centers for Disease Control and Prevention received $4.5 billion, an increase of nearly $166 million over FY 2004.

Drug treatment and prevention programs received an increase over FY 2004 funding, with the substance abuse treatment block grant funded at $2 billion and the prevention block grant at $94 million. The bill would provide $100 million to help ensure an adequate supply of flu vaccine doses in the future.

Human Services

The Low-Income Home Energy Assistance Program received $2.2 billion, including $300 million in emergency funding. The final bill also includes $20 million for a prisoner re-entry program that allows religious groups to receive funds to help convicts make the transition back into society. The omnibus bill funds the Food Stamp Program at $35.155 billion, the child nutrition programs at $11.8 billion, and Women, Infants and Children (WIC) at $5.277 billion. All discretionary programs are subject to a .83 percent across-the-board reduction. (The discretionary federal food programs are WIC; Commodity Supplemental Food Program; Farmers' Market Nutrition Program; administrative funding for The Emergency Food Assistance Program; and the Bill Emerson and Mickey Leland Hunger Fellowships.)

Education

In total, the Department of Education budget increases by 1.6 percent. There continues to be an increase in the funding for elementary and secondary education programs such as Title I grants ($14.964 billion) and Special Education ($11.673 billion). The Title I appropriation includes a 10 percent increase in the Early Reading First program. One major new program funded is Striving Readers, which focuses on improving literacy among high school students at $24.8 million. The after school program, 21st Century Community Learning Centers, receives level funding at $999 million.

In higher education there are increases for both GEAR-UP and TRIO programs which provide crucial mentoring, support and information for low income students to be prepared for post-secondary education and continued support for these students while attending college. No change is made in the appropriation for PELL Grants and there is a slight decrease in funding for College Work-Study. Also, there is an increase in funding for historically Black Colleges and Universities, and Hispanic Serving Institutions.

The most significant decreases are in Teacher Quality Enhancement Grants, State Grants for Innovative Education Programs, Education Technology State Grants, Comprehensive School Reform, Community Technology Centers and Smaller Learning Communities. Some of this decrease is attributable to a consolidation of some discretionary grant programs into the Fund for the Improvement of Education but there is a decrease in the Fund's appropriation which will limit size and number of grants made under this authority.

Arts/Tourism

Cultural funding will realize some small increases under the omnibus. The National Endowment for the Arts (NEA) increased from $120.97 million to $121.23 million. The NEA increase will incorporate approximately $2 million for the new American Masterpieces program, which will sponsor presentations of the great American works across all art forms, and will reach large and small communities in all 50 states. The popular Challenge America program will be funded at approximately $21.5 million. The National Endowment for the Humanities increased from $135.30 million to $138.01 million. Approximately $16 million of the NEH funding is for matching grants. The omnibus also contains $10 million for an international destination marketing program at the Department of Commerce. $20 million was originally proposed in the Senate version, but negotiations between the House and Senate led to a $10 million appropriation. The Travel Business Roundtable (TBR) and the Conference of Mayors have worked continually to ensure that additional funding was appropriated to the destination marketing program, which will launch its campaign in the United Kingdom in mid-December.

Energy

The bill includes $4.7 billion for the Army Corps of Engineers and $577 million, which is the same level for FY '04, for the nuclear waste repository at Yucca Mountain in Nevada. Funding for specific programs at Department of Energy include $389 million for renewable energy technologies, $120 million for electricity transmission and distribution, and $386 million for nuclear energy.