Little Good News as Cities Respond to President's FY 09 Budget

WASHINGTON, Feb. 7 /PRNewswire-USNewswire/ -- President Bush's final budget offers little good news in terms of funding for programs important to cities and towns, according to an analysis conducted this week by the National League of Cities (NLC).

"The President's budget hits local governments hard, cutting programs needed by cities and towns to develop their communities, promote jobs, and fight crime," said NLC President Cynthia McCollum , council member of Madison, Ala. "Yet again, the Administration is attempting to reduce the Community Development Block Grant (CDBG) program, slash programs to address housing, energy efficiency, workforce development and other critical federal grants. The cuts for workforce development assistance are especially troubling given the sudden and sharp downturn in the number of jobs in the workplace.

"We've had to fight every single year for CDBG -- one of the most successful programs used by cities of all sizes -- and we will have to do it again. We're also concerned about the cuts to homeland security and other public safety programs. Finally, at a time when we need to find ways to increase energy efficiency and reduce the congestion choking our metropolitan areas, the proposed cuts to Amtrak and transit funding makes no sense.

"More importantly, however, is the effect these cuts will have on our local budgets, which are facing huge pressures because of the fallout from the housing crisis. Because cuts at the federal level too often translate directly into local government - and the taxpayers - scrambling to pick up the tab, our choices are few - cut needed services or raise revenues.

"These are the kinds of programs that help keep America strong and we will work hard with Congress to restore the funding," McCollum said, vowing to work closely with Congressional leaders in the coming months. "We need to bring reality into this budget process and have the federal government as a full partner in our efforts to provide for our citizens on a daily basis," she said.

Key findings by NLC include:

Crime Prevention, Public Safety and Homeland Security

-- Funds for crime prevention programs that support local law enforcement efforts would be slashed by 61 percent or $1 billion as part of a consolidation of 70 state and local law enforcement assistance programs into four grant programs. This consolidation would mean the end of two popular and effective public safety programs, the Community Oriented Policing Services (COPS) Program and Byrne Justice Assistance Grants .

-- Funds for grants for security, law enforcement, firefighters and emergency medical teams would be cut by almost half or $1.9 billion. Funding for state and local interoperability emergency grants would stay at current levels of $50 million.

Economic Development and Housing

-- Funding for the Community Development Block Grant program (CDBG) would be cut by approximately $1 billion or 30 percent from $3.9 billion to $2.9 billion. The President also proposes to eliminate the HOPE VI program, the only federal program dedicated to the construction and rehabilitation of public housing.

-- Funds would increase for several affordable housing programs, including the HOME Investment Partnership Program by $263 million to nearly $2 billion, and an additional $15 million, for a total of $65 million, would set aside for housing counseling programs to help homeowners at risk of foreclosure.

-- Funds would increase substantially for the Section 8 Project-Based Rental Assistance program, adding $1 billion to a total of $7 billion. Last year, HUD ran out of funding before the end of the year, delaying payments to property owners and jeopardizing the status of the renters and the stability of communities.

Transportation Programs

-- Almost $2 billion less in transportation funding authorized by SAFETEA-LU was included in the President's budget, with reductions in the transit account taken to offset the anticipated shortfall in the Highway Account of the Highway Trust Fund.

Energy Programs

-- Funds for the Office of Energy Efficiency and Renewable Energy were cut by 27 percent to $1.26 billion in FY 2009, eliminating the $220 million Weatherization Assistance Program that local governments use to help families insulate their homes and lower their heating or cooling costs.

Environmental Protection Agency

-- The Clean Water State Revolving Fund would receive $555 million in FY 2009, a drop of about $145 million from FY 2008. Through this fund, states and local governments can access low-interest loans to for sewage treatment and pollution control.

Health and Human Services Programs

-- Funding for the Low Income Home Energy Assistance Program, which has helped millions of poor and elderly Americans pay for heating or cooling their homes, would be reduced by 23 percent from $2.57 to $2 billion.

-- Funding for the Social Services Block Grant and the Community Services Block Grant program would be zeroed out. Cities and towns that use these funds to provide welfare and other low income individuals with child care or basic medical services would have to eliminate the services offered or find alternative funding sources.

-- Funding for pandemic flu preparedness would increase significantly from about $78 million last year to more than half a billion dollars this year.

Workforce Development Programs

-- Funds are reduced by $438 million for the Workforce Investment Act (WIA) programs, an important component of local job creation initiatives and used for training dislocated workers and disadvantaged adults and youth.

NLC will hold its Congressional City Conference in Washington, DC , March 9 - 12, which will include high-level meetings with Members of Congress and the Administration, and a push for more discussion on issues of importance to cities in the ongoing presidential campaign. For media registration information, go to http://www.nlc.org/pressroom/conferencepresspage.aspx.

SOURCE National League of Cities