Appropriations and Budget News

White House Unveils FY2011 Budget Proposal

On February 1, the Obama Administration unveiled its $3.8 trillion FY2011 budget proposal. According to the Office of Management and Budget, the administration is proposing 120 program terminations, reductions or consolidations to save $20 billion in discretionary spending.

The budget reduces non-defense domestic discretionary roughly $6 billion under the current level to $441.3 billion and would freeze it at $446 billion through FY2013. Most of the drop in non-defense discretionary spending from FY2010 to FY2011 is due to a decrease in the budget for the Census Bureau, which received $7.2 billion for FY2010 as it prepared for decennial census. The administration is requesting $1.3 billion in FY2011.

The following is a summary of FY2011 funds requested in the budget for selected community and economic development programs. NADO staff will be preparing an in-depth analysis of the President’s FY2011 budget along with a summary of the final FY2010 appropriations bills.

Department of Agriculture (USDA)

The budget establishes a Regional Innovation Initiative, which is designed to coordinate regional planning and job creation. The budget would set-aside five percent of funding from approximately 20 existing USDA programs for regional pilot projects, to support the new initiative. Highlights of proposed USDA Rural Development spending include:

  • Rural Community Facilities Program Account: $41.7 million in budget authority ($13.3 million less than current funding) to support $295 million in direct loans, $206 million in guaranteed loans and $30 million in grants
  • Business Cooperative Service, Rural Business Program: $81.5 million in budget authority ($15.6 million less than current funding) to support $942 million in Business and Industry Guaranteed Loans, $38.7 million for Rural Business Enterprise Grants and $2.5 million for Rural Business Opportunity Grants
  • Rural Utility Service Water and Sewer Programs: $534.4 million in budget authority ($34 million less than current funding) to support $1.04 billion in direct loans, $75 million in guaranteed loans and $442 million in grant assistance

Community Development Financial Institutions (CDFI) Fund

$250 million, an increase of $3.3 million over current appropriations; no funds are requested for the Capital Magnet Fund, which received $80 million for FY2010. Instead, $75 million is request to fund two new initiatives within CDFI:

  • Healthy Food Financing Initiative: $25 million to provide loans and grants “to community development financial institutions for the purpose of offering affordable financing and technical assistance to expand the availability of affordable healthy food options in distressed communities”
  • Bank on USA: $50 million for “financial assistance, technical assistance, training and outreach programs to community development financial institutions, other financial service organizations, nonprofit organizations, states, and local governments, and partnerships of such entities for the purpose of seeding local initiatives to establish bank accounts for low and moderate-income persons who do not have bank accounts”

Department of Energy

  • Weatherization and Intergovernmental Activities: $385 million, $88 million over current funding, to support the State Energy Program and the Weatherization Assistance Program

Environmental Protection Agency

  • State Revolving Funds (SRFs): $2 billion is requested for the Clean Water SRF and $1.2 billion is for the Safe Drinking Water SRF, but are reduced $100 million under current funding; the budget contains language reserving 20 percent of funds for projects that address “green infrastructure, water or energy efficiency improvements, or other environmentally innovative activities”
  • Brownfields: $215.1 million in combined for EPA’s brownfield programs, more than $41 million over current funding

Economic Development Administration (EDA)

$286.1 million, a reduction of nearly $5 million, funding is requested for the following programs accounts:

  • Public Works: $68 million, a decrease of roughly $90 million, and similar to the President’s FY2010 budget proposal, funds are shifted to the economic adjustment program to fund a new Regional Innovation Cluster (RIC) initiative
  • Planning: $31 million, level with current spending
  • Economic Adjustment: $130 million, an increase of $91.4 million with “at least” $75 million reserved for the RIC initiative (see below)
  • Global Climate Change Initiative: $16 million, a decrease of $25 million; unlike the final FY2010 appropriations, the funds requested are stand-alone and not part of a set-aside within the public works account
  • Technical Assistance: $13 million, an increase of $3.2 million
  • Trade Adjustment Assistance: $16 million, an increase of $200,000
  • Salaries and Expenses: $40.1 million, an increase of nearly $2.2 million

According to the budget request, “EDA will put special emphasis on the development and implementation of regional innovation clusters that leverage regions’ existing competitive strengths to boost job creation; economic growth; and encourage entrepreneurial activity in economically distressed regions.” The RIC initiative has a two-implementation process:

  • Mapping/identification of clusters nationwide and characteristics of successful cluster
  • National grants to support and strengthen clusters to promote economic development and job creation

Department of Health and Human Services

  • Low Income Home Energy Assistance: $3.3 billion, $1.8 billion less than current funding; once again, the administration is proposing the creation of a “trigger mechanism” to provide automatic increases in energy assistance whenever there is a spike in energy costs or large numbers of families in poverty
  • Administration on Aging: $1.6 billion, $100 million over current funding; this funding includes $446 million for congregate meals, $221 million for home delivered meals and $416 million for home and community based supportive services

Housing and Urban Development (HUD)

  • Community Development Block Grant (CDBG) program: $3.9 billion for CDBG formula grants, roughly level with current funding
  • Sustainable Communities Initiative (SCI): $150 million equal with current funding, of this amount $100 million is for Regional Integrated Planning Grants (of this amount $25 million is for areas with populations less than 500,000), $40 million is for Community Challenge Planning Grants; and $10 million for joint DOT-HUD research initiatives; funding will also be available to go beyond planning and “fund challenge grants to help localities implement the Sustainable Communities Plans”
  • Catalytic Investment Competition Grants: $150 million for grants to provide “economic development gap financing to implement and capitalize innovative and targeted economic investment”; grants could be used for projects the reclaim vacant property, minimize property-related obstacles to economic development, and support economic activities related to transit-oriented development; eligible applicants will include units of general local government, non-profit entities, or a consortium “that shall include an eligible public entity and a designated lead applicant that may consist of states, local units of governments, community development corporations, and for-profit and non-profit entities”
  • HOME Investment Partnership Program: $1.6 billion, a reduction of $175 million
  • Capacity Building: $60 million for a new program focused on developing “the capacity and ability of community development corporations, community housing development organizations, and local governments to undertake community development and affordable housing projects and programs that benefit low-income families”
  • Choice Neighborhoods: $250 million for “transformation, rehabilitation and replacement housing needs of both public and HUD-assisted housing and to transform neighborhoods of extreme poverty into functioning, sustainable mixed income neighborhoods”; this is the second year the administration has sought funding for this initiative, which would replace the HOPE VI program

Department of Labor (DOL)

WIA Employment and Training State Grants for adult, youth and dislocated workers: $3.17 billion, $27 million more than current funding. This funding includes:

  • $906.8 million for adult employment and training activities; the budget proposes that five percent of this funding be set aside for a new “Workforce Innovation Fund” that will provide competitive grants to “projects that test and evaluate effective strategies for improving program delivery and outcomes”
  • $1.03 billion for Youth Activities; the budget directs 15 percent of total Youth funding go to a Youth Innovation Fund to pilot “innovative models for delivery summer and year-round work experiences and comprehensive service to disconnected youth”
  • $1.25 billion for dislocated worker employment and training activities; again the budget proposes that five percent of this funding be available for the new Workforce Innovation Fund

Department of Transportation (DOT)

The budget request $78.8 billion in total budget resources for DOT programs, an increase of $2 billion over FY2010 funding, this includes:

  • Federal-Aid Highways: $42.1 billion, a decrease of $687 million; the administration is again proposing a long-term extension of federal surface transportation programs through March 2011 at the FY2009 authorized level of funding
  • Livable Communities Initiative: $20 million for a new program within the Office of the Secretary of DOT to “coordinate multi-modal and interagency (HUD and EPA) livability and sustainability work, develop performance standards and metrics, and provide grants and direct technical assistance to state, local, and non-profit organizations”
  • National Infrastructure Innovation and Finance Fund (NIIFF): $4 billion for a new entity within DOT to fund “high value projects around the country; according to the budget proposal the NIIFF would fund projects “generally not less than $25 million,” which are either:
    1)Highway, tunnel, bridge, transit, commuter rail, passenger and freight intermodal facilities, passenger or freight rail, airport/aviation, ports and maritime investment
    2)A transportation component of a non-transportation project
    3)Transportation infrastructure that increases the environmental sustainability of the transportation network in a region
    4)Project size may be less than $25 million for projects in smaller cities and regions
    5)Of the funds provided, up to $150 million would be reserved for planning, preparation and design costs of a project; up to $50 million is for cost-benefit analysis; and up to $70 million is for establishing and administering NIIFF

Airport Improvement Program (AIP): $3.5 billion, level with current funding

Formula and Bus Grants: $8.2 billion in contract authority, which includes $547.8 million in nonurbanized area formula funding

Livable Communities: $306.9 million in funding “to promote livable communities in metropolitan and rural areas by providing effective and reliable transportation alternatives that increase access to jobs, health and social services, and other aspects of daily life”

Federal-State Regional Commissions

  • Appalachian Regional Commission (ARC): $76 million, equal to current funding, which includes $63.5 million for area development (a decrease of nearly $190,000) and $6.2 million for local development districts (equal to current funding)
  • Delta Regional Authority (DRA): $13 million, equal to current funding
  • Denali Commission: $11.9 million, level with current spending
  • Northern Border Regional Commission (NBRC): $1.5 million, equal to current appropriations
  • Northern Great Plains, Southeast Crescent, and Southwest Border Regional Commissions: No funding is requested

To access detailed FY2011 budget information, visit www.whitehouse.gov/omb/budget/.

Congress Approves Omnibus Appropriations Bill

On December 10, the House approved a conference report that combines six of the 12 FY2010 spending measures into a single funding bill. The omnibus measure contains $446.8 billion in discretionary spending and combines the Commerce-Justice-Science, Financial Services, Labor-HHS-Education, Military Construction-VA, State-Foreign Operations and Transportation-HUD spending bills. The Senate is expected to take up the measure by mid-December.

Federal government programs are currently operating under a continuing funding resolution (CR) that is set to expire December 18. Passage of another short-term CR may be required to give the Senate, which is currently embroiled in health care reform legislation, time to take up the measure and provide the administration with time to review the bill.

Within the next two weeks, NADO will provide members a detailed analysis of the omnibus bill. To access the complete legislative text and conference report, visit the House Rules Committee Web site at http://rules.house.gov/bills_details.aspx?NewsID=4520.

Specific program funding highlights include:

Department of Housing and Urban Development


  • Community Development Block Grant: $4 billion, level with current funding
  • Economic Development Initiative Grants: $173 million, $7.7 million above current funding
  • Sustainable Communities Initiative: $150 million (new program)
  • Rural Innovation Fund: $25 million (new program that replaces the current Rural Housing and Economic Development grant program)
  • Home Investment Partnership Program: $1.8 billion, level with current funding
  • Self Help Homeownership: $82 million, $18 million more than current funding
  • Homeless Assistance Grants: $1.9 billion, $377 million over current funding
  • Energy Innovation Fund: $50 million (new program)
  • HOPE VI: $200 million, $80 million over current funding
  • Choice Neighborhoods Initiative: $65 million (demonstration program)

Department of Transportation

  • National Infrastructure Investments: $600 million ($500 million under the Senate proposal) and structured similar to the TIGER grant program and can be used to fund a wide variety of transportation-related projects; individual grant size shall be no less than $10 million and no more than $200 million; $140 million is reserved to fund projects in rural areas
  • Airport Improvement Program (AIP): $3.5 billion, equal to current funding and includes $6 million for the Small Community Air Service Development Pilot Program
  • Federal-Aid Highways: $41.1 billion obligation limit; it is unclear when the House and Senate will pass an extension for surface transportation funding, which is set to expire with the CR on December 18

Department of Commerce

Economic Development Administration: $293 million, $20.2 million over current funding

  • Public Works: $158.28 million, $25 million over current funding
  • Global Climate Change Mitigation: $25 million, as a set-aside within the public works program
  • Planning: $31 million, and retains NADO-supported language directing the agency to “continue to allocate funding to the existing network of Economic Development Districts (EDDs), consistent with the fiscal year 2009 direction”
  • Technical Assistance: $9.8 million
  • Trade Adjustment Assistance: $15.8 million, level with current spending
  • Economic Adjustment Assistance: $38.6 million, $3.3 million over current spending
  • Salaries and Expenses: $38 million ($5.2 million over current funding); the agency is directed to submit a cost estimate for re-establishing a single Economic Development Representative (EDR) for each state
  • BRAC: The agency is directed to work with the Defense Department’s Office of Economic Adjustment to submit a report identifying opportunities for collaboration to help communities impacted by downsizings, closures and realignments

The bill supports the President’s innovation cluster proposal and directs EDA to establish a structure for coordination between “appropriate economic development agencies” and report on the proposed structure within 90 days. EDA is also directed to provide quarterly reports on “progress and funding for the cluster initiative and to create performance measures” for future funding.

Census Bureau: $7.1 billion is provided for Periodic Census programs, level with current funding

Manufacturing Extension Program: $124.7 million, level with current funding

Department of Justice

  • Byrne Justice Assistance Grants: $519 million, $27 million less than current funding
  • Byrne Discretionary Grants: $185.3 million, $7.3 million more than current funding
  • Weed and Seed Program: $20 million, $5 million less than current funding
  • Juvenile Justice Accountability Block Grants: $55 million, level with current funding
  • COPS Hiring Program: $298 million; FY2009 funding was not provided
  • COPS Technology: $170.2 million, $18.8 million less than current funding

Department of Health and Human Services

  • Low Income Home Energy Assistance Program (LIHEAP): $5.1 billion, level with current funding
  • Child Care and Development Block Grant: $2.1 billion, level with current funding
  • Social Services Block Grant: $1.7 billion, level with current funding
  • Community Services Block Grant: $740 million, $6 million less than current funding
  • Head Start: $7.2 billion, $122 million above FY2009
  • Administration on Aging: $1.5 billion, level with current funding

Department of Labor

Workforce Investment Act (WIA) state and local WIB grants: $2.9 billion, including:

  • Adult Employment and Training: $861.54 million, level with current funding
  • Youth Activities: $924 million, level with current funding
  • Dislocated Worker Employment and Training: $1.2 billion, level with current funding
  • National Reserve Account for Dislocated Workers: $229.2 million, level with current fundingYouthbuild: $102.5 million, $32.5 million over current funding
  • Career Pathways Innovation: $125 million (new program)
  • Workforce Data Quality Initiative: $12.5 million (new program)
  • Community Services for Older Americans: $825.4 million, $252.5 million more than current funding
  • Job Corps: $1.7 billion, $20 million over current funding

Department of Treasury

Community Development Financial Institutions (CDFI) Fund: $246.7 million, an increase of nearly $140 million; of this amount $80 million is start-up capital for the new Capital Magnet Fund and $4.1 million is for a competitive grants pilot program aimed at providing financial counseling services to prospective home buyers

Small Business Administration (SBA)

The measure supports existing program levels of $17.5 billion for the 7(a) general business loan program and $7.5 billion for the Certified Development Company program

Microloans: $3 million to support a program level of $25 million ($3 million over current funding) and $22 million for technical assistance

Small Business Development Centers: $113 million, an increase of $3 million

Entrepreneurial Development Initiative: $10 million; this new program would expand services available to veterans to start small businesses, create a “ready reserve” program of business experts that can deploy to economically distressed areas to assist in job creation efforts, and provide support to small businesses participating in regional economic clusters

President Signs Continuing Funding Resolution, Includes Highway Funding Extension

On October 30, President Obama signed into law the $32.3 billion FY2010 Interior-Environment Appropriations Bill (P.L. 111-88). Included in the legislation is a continuing funding resolution extending funding for government programs through December 18. The bill also extends funding at the FY2009 level for federal surface transportation programs authorized under SAFETEA-LU.

This is the second continuing funding resolution enacted by Congress and the administration. The extension is necessary because only five of the 12 annual appropriations bills have been signed into law. Given the tight congressional calendar and the backlog due to debate over healthcare reform legislation, it is becoming increasingly likely that the remaining spending bills will be rolled into an omnibus spending package. The unfinished spending bills include:

  • Commerce-Justice-Science: Passed by the House and approved by the Senate on November 5
  • Defense: Passed by both the full House and Senate; awaiting conference
  • Financial Services: passed by the House in July; approved by the Senate Appropriations Committee in July
  • Labor-HHS-Education: passed by the House in July; approved by the Senate Appropriations Committee in July
  • Military Construction-Veterans Affairs: passed by the House in June; marked up by Senate Appropriations Committee in July
  • State Department-Foreign Operations: passed by the House in June; approved by Senate Appropriations Committee in July
  • Transportation-HUD: passed by both the full House and Senate; awaiting conference

Senate leaders had hoped to pass an 18-month extension of surface transportation programs, but were forced to scale back the length of the extension. A number of Senators either opposed the length of the extension or efforts to rescind rescissions of funding contained in SAFETEA-LU. Congress will be forced to begin crafting another extension of surface transportation programs shortly after the Thanksgiving holiday.

For more information, contact NADO Legislative Director Jason Boehlert at 202.624.8590 or jboehlert@nado.org.

Second Continuing Funding Resolution Expected

House Majority Leader Steny Hoyer (D-MD) recently indicated the House of Representatives is expected to begin consideration of a second stop-gap continuing funding resolution (CR) to sustain federal government programs the week of October 26.

Governmental programs are currently operating under a CR (HR 2918) that is set to expire October 31. Nearly one month into FY2010 and only four of the 12 annual appropriations bills have been enacted — Agriculture (HR 2997), Energy and Water Development (HR 3183), Homeland Security (HR 2892) and Legislative Branch (HR 2918).

With Congress embroiled in negotiations over health care legislation, it is unlikely Congress will be able to pass the remaining bills individually before the end of the year. Given the compressed timetable, Senate Appropriations Committee Chairman Daniel Inouye (D-HI) has indicated that wrapping all or some of the remaining spending bills into an omnibus appropriations package is becoming increasingly likely.

Also expiring at the end of October is a one-month extension for surface transportation programs that was included in the first CR.

House Approves Continuing Funding Resolution, Sustains Transportation Programs

On September 25, the House passed the conference report to the Legislative Branch Appropriations bill (HR 2918), which contains a continuing resolution that sustains funding for all federal programs, including surface transportation programs at their current FY2009 levels through October 31. The Senate is expected to take up the measure the week of September 28.

Earlier in the week, the House had approved a three-month extension (HR 3617) of surface transportation programs. The Senate had planned on taking up the House extension, but substituting its own 18 month version in its place, returned to the House for final consideration.

Sen. George Voinovich (R-OH), who is opposed to a long-term extension of transportation programs, has urged Congress to pass a multi-year authorization bill and has threatened to filibuster any 18-month extension making it virtually impossible to bring up the House measure before the current transportation bill expires at the end of the fiscal year.

The continuing funding resolution will also provide Congress additional time to complete the 12 annual appropriations bills for FY2010. To date, the House has passed all of its spending bills and the Senate has passed six. To view the status of appropriations bills, visit http://thomas.loc.gov/home/approp/app10.html.

Congress Passes Supplemental Spending Bill

On June 18, the Senate adopted the conference report for the $105.9 billion FY2009 war supplemental bill (HR 4326), clearing the measure for the president's signature. Senate action followed House adoption of the conference report on June 16. The President is expected to sign the bill.

The final agreement appropriates $105.9 billion in supplemental FY2009 funds for military efforts in Iraq, Afghanistan, terrorism, foreign aid and various domestic programs. The total is $13.7 billion more than the administration’s request, $9 billion more than the original House-passed bill and $14.6 billion more than the Senate version.

The measure's funding would bring the total FY2009 supplemental war funding close to $150 billion when added to the $65.9 billion Congress appropriated last year.

In addition to defense spending, the bill provides $847 million for the Army Corps of Engineers to repair federal navigation and flood control projects resulting from flood and hurricane damage, and $80 million for tenant-based Section 8 vouchers for low-income individuals in the Gulf Coast affected by Hurricanes Katrina and Rita.

Another $40 million is provided for the Economic Development Administration (EDA) Trade Adjustment Assistance grants to communities and firms adversely impacted by trade and $13 million is allocated for the DOT Essential Air Service program.

House Begins Fiscal 2010 Appropriations Process

On June 4, the House Commerce-Justice-Science Appropriations Subcommittee approved a $64.4 billion FY2010 draft spending bill, an increase of $6.7 billion from the current funding measure and $200 million less than President Obama’s budget request.

Under the draft, the Department of Commerce receives $13.8 billion, $4.7 billion more than FY2009 funding and slightly less than the administration's request. Much of the increase for the department is directed toward funding for the Census Bureau, which is preparing for its 2010 count. The bill provides $7.4 billion for the Bureau, level with the President’s request and $4.2 billion more than FY2009.

The draft also includes $293 million for the Economic Development Administration (EDA), $20 million more than current funding and $9 million more than the Obama budget request. NADO will provide spending details for specific EDA program accounts within the week.

In addition, the draft bill provides $27.7 billion for the Department of Justice, six percent more than FY2009 and three percent more than the FY2010 budget request. This includes $300 million for the State Criminal Alien Assistance Program, $100 million less than FY2009. President Obama did not request any funding for the program for FY2010. Details regarding funding for additional state and local justice assistance programs will be provided within the week.

The House Appropriations Committee is expected to mark up the measure next week and the full House is expected to take it up the week of June 15.

A number of other House Appropriations subcommittees are also expected to hold markups the week of June 15. This includes the Homeland Security Subcommittee on June 8, the Interior and Environment Subcommittee on June 10, the Agriculture Subcommittee on June 11 and the Energy and Water Subcommittee on June 15.

President Unveils 2010 Budget Details

On May 7, President Obama released details of his FY2010 $3.5 trillion budget proposal. In February, the administration provided a broad outline of its budget priorities, but release of the detailed budget request was delayed. While the budget is typically released the first Monday of every February, incoming Presidents have the ability to postpone release of the detailed budget appendix. To access the detailed budget appendix, visit www.whitehouse.gov/omb/budget/Appendix/.

NADO staff is in the process of preparing a detailed analysis of the budget request and its impact on small metropolitan and rural communities. However, the funding request for a sampling of key community and economic development programs is provided below.

Community Development Financial Institutions Fund

The budget requests $243.6 million Community Development Financial Institutions (CDFI) Fund, an increase of $136.6 million. Of this amount, $10 million is for technical assistance to Native American organizations and $18 million to administer New Markets Tax Credits. In addition, $80 million is transferred to the Capital Magnet Fund.

The Capital Magnet Fund was established by the 2008 Housing and Economic Recovery Act, which placed Fannie Mae and Freddie Mac into federal conservatorship. The program, which is administered by CDFI, is tasked with funding a variety of economic development, housing or community development initiatives. Eligible fund recipients include “certified” CDFIs or non-profit organizations with affordable housing as a principal purpose. In addition, the legislation requires that ‘’each grant from the Capital Magnet Fund awarded under this section shall be reasonably expected to result in eligible housing, or economic and community development projects that support or sustain an affordable housing project funded by a grant under this section whose aggregate costs total at least 10 times the grant amount.” For more information on the fund, visit www.cdfifund.gov/what_we_do/programs_id.asp?programID=11.

Economic Development Administration

The budget request contains $284 million for the Economic Development Administration (EDA), an increase of $11.2 million. Despite the increase, the budget proposes to shift roughly $60 million from the agency’s public works account and increase funding for the economic adjustment program to $125 million (an increase of nearly $90 million) to fund two initiatives focused on regional innovation clusters and business incubators (Note: funding for these activities are already supported under EDA’s existing public works program)

Specifically, the budget states that “in 2010, EDA will put special emphasis on two initiatives: 1) support for the creation of regional innovation clusters that leverage regions’ existing competitive strengths to boost job creation and economic growth; and 2) support for networks of business incubators that encourage entrepreneurial activity in economically distressed areas and regions. EDA expects that each initiative will receive at least $50 million in funding.” Funding request for specific EDA program accounts includes:<

  • Planning: $31 million equal to current spending
  • Technical Assistance: $13 million, an increase of $3.6 million
  • Public Works: $73 million, a reduction of $60.2 million
  • Economic Adjustment: $125 million, an increase of $89.7 million
  • Research: $2 million, an increase of $1.5 million
  • Trade Adjustment Assistance: $16 million, equal to current funding
  • Global Climate Change Initiative: $16 million, an increase of $1.3 million
  • Salaries and Expenses: $38 million, an increase of $5.8 million

Department of Energy

For weatherization and intergovernmental activities the budget requests $301 million, an increase of roughly $50 million. No funding is requested for the Energy Efficiency and Conservation Block Grant (EECBG) program, which received $3.2 billion in the economic recovery bill.

Department of Health and Human Services

For the Administration on Aging, the budget requests $1.49 billion, level with current spending. The Low Income Home Energy Assistance Program (LIHEAP) is provided $3.2 billion, a reduction of $1.9 billion.

The Social Services Block Grant (SSBG) program is provided with level funding of $1.7 billion and near level funding of $736 million is provide for the Community Services Block Grant (CSBG) program. The proposal also contains $7.2 billion for Head Start, an increase of more than $120 million.

The administration is seeking $50 million for a new Strengthening Communities Fund to help build the capacity of non-profit organizations and state and local governments to better serve low-income and disadvantaged populations.

Department of Housing and Urban Development

The budget requests $4.18 billion for the Community Development Block Grant (CDBG) program, an increase of $540 million.

The administration is seeking $150 million for a new Sustainable Communities Initiative (SCI) to “stimulate improved regional planning efforts that integrate housing and transportation decisions, and to challenge communities to reform zoning and land use ordinances.”

Of the amount requested for SCI, $100 million is for Regional Planning Grants to support the linking of transportation and land use. Eligible applicants would include metropolitan planning organizations (MPOs) and consortia of HUD formula block grant recipients, “with an emphasis on recipients’ capacity for long-term cross-jurisdictional partnerships, public and private engagement, and ability to integrate resources.”

The initiative contains $40 million for Metropolitan Challenge Grants “to foster reform and reduce barriers to achieve affordable, economically vital, and sustainable communities.” According to the budget summary, resources would be provided to “facilitate changes in local zoning and land use policy and practice. The objective is to provide incentives to encourage sustainable growth and reverse counter productive growth patterns that have evolved in many areas.”

The budget requests $25 million for a Rural Innovation Fund “to address the problems of concentrated rural housing distress and community poverty.” Another $25 million is for the University Community Fund for grants to assist universities in revitalizing their surrounding communities.

The administration provides $1.825 billion for the HOME Investment Partnership Program, level with current spending.

No funding is requested for the Brownfields Economic Development Initiative (BEDI), the Neighborhood Stabilization Program (NSP) or the Rural Housing and Economic Development Program.

Department of Labor

For Employment and Training Administration (ETA) services, the budget requests $3.8 billion, an increase of $200 million. This includes $2.9 billion for Workforce Investment Act (WIA) programs, level with current spending. The administration is seeking funding for several new initiatives, including:

  • $50 million for activities that prepare workers for careers in energy efficiency and renewable energy
  • $135 million for a Career Pathways Fund for community-college led partnerships to develop or expand career pathway programs
  • $15 million for the Workforce Data Quality Initiative to support the development of data systems that integrate education and workforce data to provide timely and accessible information

Department of Transportation

Within the Federal Aviation Administration (FAA), $3.5 billion is requested for the Airport Improvement Program (AIP), which is level with current spending. The administration is seeking $175 million for the Essential Air Service (EAS) program, an increase of $52 million. No funding is requested for the Small Community Air Service program.

The administration request includes $1 billion for a new Capital Assistance for High Speed Rail Corridors and Intercity Passenger Rail Service program to support capital investment grants for intercity passenger rail service.

Federal surface transportation legislation is scheduled to expire at the end of FY2009. The budget request indicates that the administration is developing reauthorization legislation. However, the budget contains baseline funding amounts for some surface transportation programs, which will change based on the passage of final legislation.

The budget cautions that the funding included in the budget request “does not represent the administration’s recommended funding levels or a budgeting approach for the upcoming reauthorization. Rather, it is intended to accurately depict the condition of the Highway Trust Fund and recognize that, under current law, maintaining baseline spending would require support from the General Fund.” These amounts include:

  • Federal-Aid Highways: the budget provides a baseline of $36.1 billion, which would be transferred from the General Fund if legislation is not completed by FY2010; this is roughly $4.7 billion under current funding
  • Transit Capital Investment Grants: $1.82 billion as a transfer from the general fund
  • Transit Formula Grants: No funding is requested

Federal State Regional Commissions

The budget request contains $76 million for the Appalachian Regional Commission (ARC), an increase of $1 million and level funding of $13 million is requested for the Delta Regional Authority (DRA). The budget includes $11.9 million for the Denali Commission, which is $165,000 over current spending. No funding is requested for the Northern Border, Southeast Crescent, Southwest Border or Northern Great Plains regional commissions.

Congress Adopts Fiscal 2010 Budget Resolution

On April 28, Congress completed action on its fiscal 2010 budget resolution (S Con Res 13). The budget resolution is a nonbinding agreement and does not require the president’s signature, but it does set the framework for Congress to make legislative decisions on taxes, appropriations and entitlement programs later in the year.

The final agreement calls for spending $3.55 trillion in FY2010, with a deficit of $1.23 trillion, $146.2 billion less than proposed by the administration. The measure also projects that annual deficits will be reduced over the next five years, reaching $523 billion by FY2014.

The agreement also includes reconciliation instructions directing the House Energy and Commerce and Ways and Means Committees and Senate Finance and Health, Education, Labor and Pensions Committees to report legislation related to health care overhaul. Additional reconciliation instructions direct the House Education and Labor Committee to reduce the deficit by $1 billion through FY2014 and make changes in student loan programs.

The inclusion of reconciliation instructions was one of the more controversial issues budget negotiators had to contend with. Reconciliation instructions will have the most impact in the Senate because under Senate rules, reconciliation legislation is not subject to a filibuster. As a result, passage requires only a simple majority vote instead of the 60 votes required to end a filibuster.

The final agreement also provides the House and Senate Appropriations Committees with $1.08 trillion in discretionary spending for FY2010, $10 billion less than the amount requested by the administration, $3 billion less than the House resolution provided but $5 billion more than the Senate version contained.

This amount, also known as the 302(a) allocation, will be divided by the Appropriations Committees and allocated for each of the 12 annual appropriations bills. The amount sub-allocated to each appropriations bill is referred to as the 302(b) allocation.

In addition to regular FY2010 appropriations, the agreement assumes $130 billion in emergency appropriations for military efforts in Iraq and Afghanistan in FY2010, equal to the amount requested by the administration. The measure also allows allocations to be increased by up to $3.6 billion and allows the committees to provide up to $28.9 billion in FY2011 appropriations.

By FY2014, the agreement projects a total discretionary budget of $1.2 trillion.

The measure also provides a $325 billion baseline for the next highway bill, a 13 percent increase over the $286.6 billion authorized in the last six-year bill (PL 109-59). The final measure also allows the Budget Committee to increase funding above the $325 billion baseline if the surface transportation bill maintains a solvent Highway Trust Fund between fiscal years 2009 through 2015.

For community and regional development programs, the budget proposes to spend $17.9 billion in FY2010. According to the conference report, the total accommodates funding for a new National Infrastructure Bank to direct public and private dollars toward infrastructure investments of national and regional significance. The report notes that although this bank is not yet authorized, a quarter of the funds should be directed to rural areas.

Finally, the resolution calls for $2.2 trillion in mandatory spending outlays in FY2010. The budget also assumes that mandatory spending will rise over the next four years, reaching $2.6 trillion in outlays by FY2014.

President Signs FY2009 Omnibus Bill

On March 10, President Obama signed in to law omnibus appropriations legislation (P.L. 111-8) that provides $410 billion in spending for nine appropriations bills for FY2009 that were left uncompleted during the 110th Congress. The bill contains $30 billion more than was spent on similar measures for FY2008.

A full copy of the omnibus package can be accessed at the House Appropriations Committee website at http://appropriations.house.gov/FY2009_consolidated.shtml. In the coming days NADO will release a detailed analysis of spending contained in the omnibus bill. Highlights of the measure include:

Economic Development Administration: $272.8 million, which is roughly $8 million under current spending. The measure provides $31 million for the planning program, an increase of $4 million, and includes language strongly supported by NADO dedicating $3.7 million of the additional funding to providing increased funding for existing economic development districts and the remaining $300,000 to reducing the backlog of designated-but-unfunded economic development districts. Additional EDA spending includes:

  • Global Climate Change Mitigation Fund: $14.7 million, an increase of $5.3 million
  • Public Works: $133.28 million, a reduction of $14.77 million
  • Technical Assistance: $9.4 million, equal to current funding
  • Research and Evaluation: $490,000, an increase of $20,000
  • Trade Adjustment & Assistance: $15.8 million, an increase of $1.7 million
  • Economic Adjustment: $35.33 million, a reduction of $7 million
  • Salaries and Expenses: $32.8 million, an increase of $2 million; the measure includes language directing the agency to distribute economic development assistance funding on a competitive basis through the existing six regional office structure; directs the agency to fill vacancies in the regional office prior to filling headquarters positions; and allows the agency to transfer up to $4 million for grant program funding to salaries and expenses for grant administration and management; EDA is also “strongly encouraged” to utilize retired EDA officials to address staffing needs on a volunteer basis

Community Development Block Grant (CDBG) Program: $3.64 billion, an increase of roughly $40 million; language is included directing HUD to distributed CDBG funds using the FY2008 methodology

Community Development Financial Institutions (CDFI) Fund: $107 million, an increase of $13 million

Small Business Administration (SBA): Provides for an overall program level of $17.5 billion for the 7(a) program and $7.5 billion for the 504 program - both are equal to the current level; $20 million is provided for Microloan Technical Assistance, an increase of $5 million; and $12 billion for the Secondary Market Guarantee Program

Employment and Training Administration: $3.6 billion is provided for Training and Employment Services, an increase of $50.1 million over current spending

Administration on Aging: $1.49 billion is for aging services programs, an increase of $60 million

Low-Income Home Energy Assistance Program (LIHEAP): $5.1 billion was provided for LIHEAP for FY2009 in the continuing funding resolution passed in 2008; no additional funding is provided

Federal Aviation Administration (FAA): $3.6 billion is for the Airport Improvement Program (AIP), an increase of $100 million; $8 million for the Small Community Air Service Development Program, $2 million under current funding; and $123 million for the Essential Air Service (EAS) program, and the Secretary is given the authority to transfer such sums as necessary to “continue service to all eligible essential air service communities”

Federal Highway Administration (FHWA): $40.7 billion is provided for Federal-Aid Highways, $500 million over current funding; and the measure rescinds $3.15 billion in unobligated contract authority and provides states with flexibility in determining how the funding rescission is applied (rescissions do not apply to safety programs)

Federal Transit Administration (FTA): $8.26 billion for the formula and bus grant program, an increase of $492 million

Federal State Regional Commissions: Appalachian Regional Commission (ARC) is provided $75 million, an increase of roughly $2 million; and the Delta Regional Authority (DRA) is provided $13 million, an increase of nearly $1.4 million

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