See 17 State and Local Programs Targeted in Obama's Proposed FY2013 Budget

Heating program, prison funds, and other programs are all at risk in President Barack Obama's proposed FY2013 budget.
by | February 15, 2012

President Obama released his $3.8 trillion budget this week, and many have already declared it -- like many recent presidential budgets -- dead on arrival and unlikely to gain traction in the Republican-controlled House.

The FY2013 budget, most notably, seeks to find $4 trillion in deficit reduction over the next 10 years. But what may be of more interest to Governing readers is how it specifically affects grants and other funding sources for state and local governments.

In a compendium to the overall budget, the administration noted 210 cuts, consolidations and savings it has proposed that will save $24 billion in 2013 and $520 billion through 2022.

It's a list worth reading. While Congress may not embrace all the idea in the president's budget, it did wind up enacting several cuts pitched in last year's list.

For example, a year ago President Obama advocated for a 7.5 percent cut to CDBG grants program. Congress wound up cutting it by 12 percent. He proposed cutting energy assistance for the poor in half, and Congress ultimately cut it by about 25 percent.*

Below, Governing highlights some of the cuts that most directly impact impact state and local governments. The list isn't exhaustive and instead focuses on the biggest cuts. It also doesn't include changes to grants that may result from consolidations of offices and programs within areas like the Department of Education and the Department of Transportation.

In the budget, the administration says that it cut programs that have continued to grow, despite their unclear objectives, resulting in a "profusion of programs that are duplicative, ineffective, or outdated -- at a significant cost to taxpayers."

The administration also notes that some of the programs targeted for cuts have laudable goals but simply cannot be funded at the most desirable levels given the fiscal climate.

Below are 17 programs targeted for cuts in the president's new budget that may be of concern to state and local officials.

Program: Grants-in-Aid for Airports

Department: Transportation

What it does: Provides federal funding for airports.

Cut: $3.35 billion to $2.42 billion

Rationale: The plan is to eliminate guaranteed funding for large- and medium-hub airports and instead target the investments toward smaller airports that lack access to other forms of revenue. Larger airports, meanwhile, would have more flexibility to charge their passengers with facility fees, and they could continue seeking other forms of revenue, like landing fees and parking lot fees.

Program: Clean Water and Drinking Water State Revolving Funds

Department: Environmental Protection Agency

What it does:  Provides grants to states for revolving loan funds. States provide a 20 percent match to the federal funds, then make loans to municipalities seeking to improve their water infrastructure. The money that the municipalities pay back then gets loaned to others.

Cut: $2.38 billion to $2.03 billion

Rationale: States will still be able to loan out plenty of money at the new funding level, the administration says, and EPA will target assistance to undeserved communities that have trouble repaying loans.

Program: Low Income Home Energy Assistance Program (LIHEAP)

Department: Health and Human Services

What it does: Provides funding for poor people to afford heating in the winter and in some cases cooling in the summer

Cut: $3.47 billion to $3.02 billion

Rationale:  In one part of the budget, the president seems like he's an advocate for LIHEAP, noting that his budget "provides an additional $450 million over the 2012 request." That's true, but what he's actually proposed is a significant cut from the 2012 enacted funding levels that some local officials say were already devastating. The administration says that during the difficult fiscal climate, LIHEAP funds must be more targeted.

Program: Community Services Block Grants

Department: Health and Human Services

What it does: Provides aid to states that gets passed along to community action agencies, which in turn use the money for poverty-reduction programs.

Cut: $679 million to $350 million

Rationale: Watchdog agencies have documented oversight failures within the program.

Program: Coastal Impact Assistance Program

Department: Interior

What it does:  A 2005 law provides funding to assist Louisiana, Texas, Mississippi, Alabama, California and Alaska with coastal restoration.

Cut: $200 million (in balances)

Rationale: States have been slow to obligate the funding, and the administration believes hundreds of millions of dollars shouldn't be allowed to sit unused in the account.

Program: State Criminal Alien Assistance Program

Department: Justice

What it does: Reimburses states and localities for the cost of incarcerating undocumented immigrants.

Cut$240 million to $70 million

RationaleThe feds are now more interested in targeting crime directly rather than focusing on the immigration issue, according to the budget. Payments will continue, but at a reduced rate.

Program: Preventive Health and Health Services Block Grant

Department: Health and Human Services

What it does: Provides states with money to "fill funding gaps in programs that deal with leading causes of death and disability" and to respond to disease outbreaks.

Cut: All $79 million

Rationale: Considered duplicative of other efforts that are more effective at implementing the program's goals.

Program: Geothermal Payments to Counties

Department: Interior

What it does: Mineral revenue collected from leases on federal land had been split between the federal government and the appropriate state government, but a 2005 law takes away half of the federal portion and gives it to the relevant county.

Cut: $50 million through 2022

Rationale: The administration takes back the federal share and reasons that if it's so important for the counties to get a cut, states can dole it out from their share of the revenue.

Program: National Pre-Disaster Mitigation Fund

Department: Homeland Security

What it does: Offers several grant programs to help states and localities plan for disasters.

Cut: All $36 million

Rationale: Considered duplicative of other programs.

Program: Diesel Emissions Reduction Grants Program

Department: Environmental Protection Agency

What it does: Helps fund efforts by states and localities to reduce diesel engine emissions by funding replacement engines and retrofits.

Cut: $30 million to $15 million

Rationale: EPA intends to create a revolving loan fund that serves a similar purpose.

Program: Funds for Washington Metropolitan Area Transit Agency

Department: Transportation

What it does: Provides funds for the Washington, D.C. region's transit system.

Cut: $150 million to $135 million

Rationale: "Difficult fiscal circumstances." But the administration says that due to other changes in its budget, WMATA (aka Metro) may wind up seeing an increase in overall federal funds. The move is troublesome to some Washington, D.C.-area leaders, since localities match this federal contribution -- thus, its affect may be multiplied.

Program: Watershed Rehabilitation Program

Department: Agriculture

What it does: Funds state and local planning of watershed improvement projects across the country.

Cut: All $15 million

Rationale: The program is highly localized without a significant national impact.

Program: State and Volunteer Fire Assistance Grants

Department: Agriculture

What it does: Provides funding for state foresters and other officials to organize and train rural fire responders.

Cut: $99 million to $84 million

Rationale: It's considered duplicative of other programs that operate more efficiently.

Program: Housing for Persons With Disabilities

Department: Housing and Urban Development

What it does: Provides funding for low-income residents with disabilities to "live independently in integrated community-based settings."

Cut: $165 million to $150 million

Rationale: The administration says it can still increase new units for the program even with the cuts.

Program: Beach Grants

Department: Environmental Protection Agency

What it does: Provides states with funds to monitor water quality.

Cut: All $10 million

Rationale: The administration says that states now have the ability and know-how to run their own monitoring without federal support.

Program: Economic Impact Grants

Department: Agriculture

What it does: Funds projects like fire stations and clinics in communities with high unemployment and out-migration.

Cut: All $6 million

Rationale: The administration says it's a duplicative program and the needs can be met with a similar grant program that receives a boost in funding.

Program: Water and Wastewater and Community Facilities Loan Guarantees

Department: Agriculture

What it does: Originally intended as a low-cost alternative to direct loans by the federal government for moderate-income, rural communities in need of improved infrastructure.

Cut: All $6 million

Rationale: The low-priority program is more expensive than previous estimates and serves fewer needy communities than the direct loan program.

A previous version of this article erroneously overstated the size of the Congressional cut to this program due to a mathematical error.


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