October 12, 2011
RE: Local Priorities Squeezed in Competing House and Senate Spending Bills
Dear Mayor:
Late last month, the National League of Cities’ (NLC’s) Federal Relations professionals, Michael Wallace and Leslie Wollack, analyzed crucial competing funding proposals taking shape in the U.S. House and the Senate.
In late September, the Senate Appropriations Committee passed its version of the FY2012 Transportation-Housing and Urban Development (THUD) Appropriations bill. The Senate bill would provide $55.3 billion in overall discretionary spending for programs under the Departments of Transportation, Housing and Urban Development, and related agencies — a small increase over the $55.2 billion allocated in the House version of the bill released two weeks earlier.
Small differences in overall funding, however, mask big differences between the two chambers’ approaches to the challenges of allocating limited federal funds tied to the ongoing deficit reduction initiatives. Proposed funding levels for the Community Development Block Grant (CDBG), a top priority for cities, provide a good example of these differences.
Under the House bill, CDBG funding would be maintained at the FY2011 level of $3.5 billion. The Senate bill, by contrast, would cut CDBG to $2.85 billion, $485 million below the House and the lowest amount since 1990, when CDBG was funded at $2.81 billion.
However the House, unlike the Senate, arrives at level funding for CDBG by reducing or eliminating a number of other priority programs that the Senate bill seeks to preserve.
For instance, although the House bill preserves level funding for CDBG, it would completely eliminate the Transportation Improvements Generating Economic Recovery (TIGER) grant program, the Sustainable Communities Initiative, Housing Counseling Programs, the Choice Neighborhoods Initiative and the HOPE VI Program.
The Senate, however, would maintain some funding for those programs in its version of the bill.
Under the Senate bill, The Sustainable Communities Initiative, which brings together the resources of Departments of Transportation and Housing and Urban Development and the Environmental Protection Agency for grant recipients, would receive $90 million. Housing Counseling Programs would be allocated $125 million to, among other things, continue the National Foreclosure Mitigation Counseling program.
Lastly, the Senate would allocate $120 million to HOPE VI/Choice Neighborhoods program that improves access to transit, education and employment opportunities in communities with public housing. All of these programs are zeroed out in the House bill.
The HOME program, which cities use to construct and rehabilitate affordable housing, would receive more funding under the House bill ($1.2 billion) than in the Senate, ( $1 billion). Both amounts, however, are significantly below last year’s level of $1.6 billion, which is believed to be in response to a Washington Post series that characterized examples of HOME funded projects as wasteful spending.
On a bright note, the Senate and House bills would both continue to resist cuts to programs that directly support housing opportunities for struggling families, including the Tenant-Based Section 8 rental assistance program at $18.9 billion in the Senate and $18.5 billion in the House; Project-Based rental assistance at $9.4 billion in both bills; and Homeless Assistance Grants at $1.9 billion in both bills.
In terms of transportation funding, the Senate bill allocates $550 million for TIGER grants, of which $120 million would be set aside for rural communities. In addition, the Senate bill includes $100 million in funding for high-speed and intercity passenger rail, which was zeroed out in the House version.
While the Senate funding represents only a fraction of the $8 billion the President requested for fiscal year 2012 and the $10.1 billion provided for high-speed rail since 2009, it keeps the program alive.
The Senate bill also provides for level funding for highways and a slight increase of $358 million for the transit New Starts program, up from $8.3 billion and a major increase over the House proposal of $5.3 billion.
The Senate bill also includes $25 million for energy efficiency improvements for transit systems to reduce their greenhouse gas emissions and $150 million for capital safety improvements to the District of Columbia’s transit system, which is always targeted for federal budget cuts. Neither is funded in the House bill.
Although the House and Senate reached agreement last month on a six-month extension of the authorization of the surface transportation program and the federal excise taxes that support the program, and are working on a continuing resolution to avoid a government shut-down at the end of the month, the path forward for spending bills remains unclear, including whether either of these bills will get to their respective chamber’s floors for a vote.
However, the clear differences in approach to funding in these bills, the rewrite of the nation’s transportation program and other debates make it clear that much is at stake for municipalities as the session continues.
We urge you to contact Senators Menendez and Lautenberg and your Congressman to emphasize the importance of adequate CDBG and Transportation funding, and the value of other priority programs, to you constituents and your municipality.
If you have any questions, contact Jon Moran at 609-695-3481, ext. 121 or jmoran@njslom.com
Very truly yours,
William G. Dressel, Jr.
Executive Director
