See 34 Proposed Obama Budget Cuts That Affect State and Local Programs

CDBG isn't the only local program getting cut. Learn about funding that's in jeopardy for affordable housing, historic preservation and other areas.
by | February 14, 2011
 

President Obama released his $3.7 trillion budget Monday, and unsurprisingly, dozens of grant programs that provide funding to state and local governments saw their budgets cut or eliminated.

The plan is in line with the president’s goal of reducing the deficit by about $1.1 trillion over the next decade. But it comes at a cost to state and local governments – as well as the nonprofits they work with – that will see reductions to programs that fight poverty, build affordable housing and help poor people afford heating and cooling bills.

In a speech Monday morning, Obama said he had to make “tough choices” as he crafted the budget. That includes slashing $300 million from the Community Development Block Grants budget and reducing the Community Service Block Grants budget in half. "If we're going to walk the walk on fiscal discipline, these kinds of cuts will be necessary,” Obama said.

"In a different environment, we wouldn’t be looking at making those reductions,” budget director Jack Lew added during an afternoon press conference.

The plan drew the ire of groups representing local governments, who say that while they appreciate efforts to reduce the budget deficit, cutting community programs isn't the way to do it. “[A]s the effects of the recession continue to play out in our cities and towns, the impact of these cuts on thousands of projects and programs at the neighborhood level, and the jobs supported by those projects, will be very real,” the National League of Cities said in a statement.

Obama’s plan includes a five-year freeze on discretionary, non-security spending. Rather than an across-the-board freeze, it allows for cuts in some areas and investments in others, such as clean energy and education, which were the winners in his budget. “While it’s absolutely essential to live within our means... we can’t sacrifice our future in the process,” Obama said.

We at FedWatch have compiled this list of programs slated for elimination or deep cuts that should be of particular to states and localities. A full list of cuts is available here.

ADOLESCENT FAMILY LIFE PROGRAM

(Health and Human Services)

Eliminated -- $17 million

The program provides funding for programs focused on preventing teen pregnancy and delivering services to pregnant and parenting adolescents. Non-profits and local governments, such as Minneapolis Public Schools and the City of Bridgeport, Conn. have received funding through this program. The budget notes that other programs provide hundreds of millions in aid for similar purposes.

AIRPORT GRANTS-IN-AID

(Transportation)

Reduced -- $3.515 billion to $2.424 billion

The budget eliminates guaranteed funding for large and medium hub airports and focuses aid to smaller airports instead. “At the same time, the Budget would allow larger airports to increase non-Federal passenger facility charges,” the administration writes. “Thereby, the Budget envisions giving the larger airports greater flexibility to generate their own revenue.”

BROWNFIELDS ECONOMIC DEVELOPMENT INITIATIVE

(Housing and Urban Development)

Eliminated -- $18 million

The program helps cities redevelop abandon or under-used industrial and commercial sites when contamination is a potential or existing concern. The budget says this is duplicative funding for HUD, and its goals are “served through much larger and more flexible federal programs.”

CAREER AND TECHNICAL EDUCATION AND TECH PREP EDUCATION STATE GRANTS

(Education)

Reduced -- $1.264 billion to $1 billion

Two grants that provide states with funding for education programs will be consolidated to generate savings.

CAREER PATHWAYS INNOVATION FUND

(Labor)

Eliminated -- $125 million

The program offers grants for community college partnerships that help students prepare for jobs in emerging industries. It is considered duplicative, due to $500 million in annual funding for the Trade Adjustment Assistance Community College and Career Training Program.

CLEAN WATER AND DRINKING WATER STATE REVOLVING FUNDS

(Environmental Protection Agency)

Reduced -- $3.487 billion to 2.540 billion

These grants help states capitalize revolving funds that loan money for improvements in municipal wastewater and drinking water systems. “This is a reduction from the historically high funding levels provided in 2010, but a total of $1 billion more than provided in regular appropriations in 2009,” according to the budget.

COMMUNITY DEVELOPMENT BLOCK GRANTS

See Governing’s previous coverage of this cut

(Housing and Urban Development)

Reduced -- $3.983 billion to $3.684 billion

The cut to this program, which provides state and local aid for programs that help low- and moderate-income families, is one of the most controversial elements of the budget. “(T)he distribution of funds is not targeted to the most economically distressed communities, and communities in similar distress do not receive similar allocations,” the administration wrote. The budget also calls CDBG lacking in focus.

COMMUNITY ECONOMIC DEVELOPMENT PROGRAM

(Health and Human Services)

Reduced -- $36 million to $20 million

The program that provides grants to community organizations isn’t effective, according to the administration, and funds are being transitioned to the Health Food Financing Initiative.

COMMUNITY SERVICES BLOCK GRANTS

(Health and Human Services)

Reduced -- $700 million to $350 million

The program provides states with grants to redistribute to community action agencies that seek to reduce poverty. Since the funding is largely guaranteed, it’s difficult for states to revoke funding. Reports have also cited failures in oversight. The budget provides $350 million for the “highest performing” agencies.

DEVELOPMENTAL DISABILITIES PROJECTS OF NATIONAL SIGNIFICANCE

(Health and Human Services)

Reduced -- $14 million to $8 million

Grants for public entities and private non-profits that support aid for those with developmental disabilities will be cut so funding can be “preserved in priority programs with a stronger track record.”

JOB OPPORTUNITIES FOR LOW-INCOME INDIVIDUALS

(Health and Human Services)

Eliminated -- $3 million

“The administration proposes to redirect these funds to other more effective initiatives that support job training, employment, and low-income individuals,” according to the budget.

DIESEL EMISSIONS REDUCTION GRANT PROGRAM

(Environmental Protection Agency)

Eliminated -- $60 million

The program provides funding for states and localities seeking to reduce diesel engine emissions via retrofits or replacement. “However, the marginal benefit of these individual retrofits is small given the large universe of existing diesel engines,” according to the budget, "and the grants only push forward in time reductions to emissions that would happen anyway, as the inventory of existing diesel engines turns over.”

ELECTION REFORM GRANTS

(Election Assistance Commission)

Eliminated -- $75 million

Provides grants to states for funding new and upgraded voting machines. About $1 billion of $3 billion in federal funds provided since 2002 remain unspent.

EMERGENCY OPERATIONS CENTER GRANT PROGRAM

(Homeland Security)

Eliminated -- $60 million

The program was created to provide funding for state and local government EOCs. However, “(T)he program is largely comprised of congressionally-directed earmarks and award allocations that are not based on risk assessments.”

GREAT LAKES RESTORATION INITIATIVE

(Environmental Protection Agency)

Reduced -- $475 million to $350 million

Cutting funding for a program focused on cleaning up the Great Lakes ecosystem was one of the administration's "tough choices," according to the budget. The program's funding is appropriated to EPA, which then parses it out to other federal agencies.

HEALTH RESOURCES AND SERVICES ADMINISTRATION

(Health and Human Services)

Eliminated -- $382 million (between three programs)

The funding, which covers construction/renovation and training at health centers, often pays for projects at private-health care facilities. The funding, typically done by earmark, should instead by awarded by a competitive process, according to the administration.

HOME INVESTMENT PARTNERSHIPS PROGRAM

(Housing and Urban Development)

Reduced -- $1.825 billion to $$1.650 billion

HOME provides grants to states and localities -- often used to partner with non-profits -- to build, buy or restore affordable housing or rent ownership. The administration concedes the program has strong metrics and is meeting its goals. “The Administration continues to work with the Congress to capitalize a similar but more targeted program, the Affordable Housing Trust Fund, at $1 billion in 2011 and 2012 to further increase affordable housing supply, especially rentals, but for a more needy, lower-income population,” according to the budget.

LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP PROGRAM

(Education)

Eliminated -- $64 million

The program provides matching grant funding to states to encourage them to provide grants and work-study awards to post-secondary students. However, it has accomplished its goal of promoting state investment in these programs, according to the administration, and evidence shows state support for postsecondary grant aid “rises and falls” independently of the program.

LOCAL GOVERNMENT CLIMATE CHANGE GRANTS

(Environmental Protection Agency)

Eliminated -- $10 million

Established in 2009, the grants for communities pursuing greenhouse gas reduction “lacks guidance, defined outcomes, and an effective means of targeting funds,” according to the budget.

LOW INCOME HOME ENERGY ASSISTANCE PROGRAM

(Health and Human Services)

Reduced -- $5.1 billion to $2.570 billion

LIHEAP, another one of the “tough budget choices” in the budget, provides aid to low-income families, via state grants, to offset a portion of home heating and cooling costs. “Reflecting current forecasts for more moderate energy prices in winter 2011-2012, this returns LIHEAP funding to historic levels received for 2008 prior to the energy price spikes,” the administration wrote.

NATIONAL ENDOWMENT FOR THE ARTS GRANTS

Reduced -- $168 million to $146 million

The NEA is the largest funder of the nonprofit arts in the country.

NATIONAL ENDOWMENT FOR THE HUMANITIES GRANTS

Reduced -- $168 million to $146 million

The NEH is one of the largest funders of the humanities in the country.

NATIONAL HERITAGE AREAS

(Interior)

Reduced -- $18 million to $9 million

Non-federal National Heritage Areas funding would be reduced so the National Park Service can focus on parks. “State and local managers of NHAs continue to rely heavily on Federal funding, even though the program was not intended as a pathway to long-term Federal funding,” according to the budget.

NEW CONSTRUCTION OF HOUSING FOR THE ELDERLY AND DISABLED

(Housing and Urban Development)

Reduced -- $1.125 billion to $953 million (combined, two programs)

The program gives grants to non-profits for construction of housing for low-income elderly and disabled people. “Continued investment in new construction creates long-term financial commitments; to maximize the benefit of this investment, new projects must be well-targeted and as cost effective as possible,” the budget explains.

PREVENTIVE HEALTH AND HEALTH SERVICES BLOCK GRANT

(Health and Human Services)

Eliminated -- $100 million

This funding for state health departments could be better utilized under different programs created in the health reform law.

RURAL COMMUNITY FACILITIES

(Homeland Security)

Eliminated –- $10 million

The money covered training and other assistance for developing affordable, safe water and wastewater treatment facilities in low-income communities. It was considered duplicative of other programs.

SAVE AMERICA'S TREASURES AND PRESERVE AMERICA

See Governing’s full article on this cut

(Interior)

Eliminated -- $30 million

Once championed by the administration, these grants gave matching money for historic preservation, mostly at the local level. Marred by earmarks and often lacking merit-based criteria, these programs “contribute to community and State level historic preservation and heritage tourism efforts, but in a time of difficult trade-offs funding is being focused on nationwide historic preservation goals, such as increasing grants-in-aid to States and Tribes to carry out Federal responsibilities under the National Historic Preservation Act,” the administration wrote.

SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM

(Health and Human Services)

Reduced -- $825 million to $450 million

The aid provides minimum-wage employment at non-profits and government agencies for low-income, unemployed people older than 55. “There is little evidence that SCSEP successfully promotes unsubsidized employment or provides cost-effective community service,” the administration wrote.

STATE CRIMINAL ALIEN ASSISTANCE PROGRAM

(Justice)

Reduced -- $330 million to $136 million

The program provides reimbursements to states and localities for the cost of incarcerating illegal aliens who have committed crimes. But most of the inmates for whom states and localities request reimbursement have “unknown” immigration status and are not necessarily illegal. “This practice presents a risk that program payments may occur for inmates with U.S. citizenship or legal immigration status,” according to the budget.

STATE HEALTH ACCESS GRANTS

(Homeland Security)

Eliminated – $74 million

The program was created in 2009 to support grants to states for implementing programs that expand access to affordable health care for the uninsured. The program’s goals will be met by the health reform law, which will help 32 million uninsured individuals receive health care, according to the administration.

TARGETED WATER INFRASTRUCTURE GRANTS

(Environmental Protection Agency)

Eliminated -- $157 million

The program awarded non-competitive grants that weren’t merit-based for 333 wastewater and drinking water projects. “This approach to funding projects duplicates funding available through more effective formula allocation programs to states and bypasses the normal state prioritization process that funds the most important projects from a health and environmental standpoint,” the administration wrote.

UNIVERSITY COMMUNITY FUND

(Housing and Urban Development)

Eliminated -- $25 million

The grants fund efforts to revitalize areas surrounding historically black colleges and other higher-ed institutions that serve minorities. But, according to the administration, the program lacks clear indicators of its impact.

WATERSHED AND FLOOD PREVENTION PROGRAM

(Agriculture)

Eliminated -- $30 million

In 2010, almost 75 percent of the program was directed to specific projects, eliminating the Natural Resource Conservation Service's ability to use project evaluations as a basis for prioritization.

WORKFORCE INVESTMENT ACT -- GOVERNOR'S RESERVE

(Labor)

Reduced -- $443 million to $203 million

Statewide workforce development activities would be reduced through this program, which is traditionally spent slowly by states “with little accountability for results.” Instead, funding is directed to the Workforce Innovation Fund where states will have to compete for it.

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