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Bill's budget: snapshots of the president's budget plan.

The President presented the outlines of his budget and economic recovery plan on February 17, but he officially presented the details of his 1994 federal budget on April 8.

Well over half the President's budget is proposed for mandatory and entitlement spending programs. The portion proposed to go directly to the nation's cities and towns is less than two percent.

The following is a summary of some of the key proposals in the President's budget of greatest interest to city and town leaders.

Frank Shafroth, John Kyle, Leslie Wollack, Carol Kocheisen, Doug Peterson, Julio Barreto, Anna Ferrera, and Sandra Yamane prepared the following reports.

Housing & Community Development

President Clinton's 1994 housing and community development budget proposed a sixty percent increase in the HOME state and local block grant and a slight increase in Community Development Block Grant (CDBG) funds. For HUD, administration proposes $25.4 million in budget authority for 1994, a $224 million increase.

The budget proposed $4.24 billion for CDBG for 1994, $224 million more than this year. The budget proposes an increase of $600 million for the HOME state and local block grant program to $1.6 billion for 1994.

The President's budget calls for $856 million for homeless programs, $1'84 million above the current level. The budget also proposes $100 million in 1994 for lead based paint hazard reduction, with $90 million to go directly to state and local governments for abatement activities in privately-owned housing.

If you have any questions, please contact Julio Barreto in NLC's Office of Policy & Federal Relations at 202-626-3020.

Economic Development Administration

For the first time in 12 years, programs providing economic development assistance for cities have been recommended for funding by the administration. The administration is requesting $223 million in budget aurthority in fiscal year 1994 for the Economic Development Administration, which provides grants for local development programs.

This would be an increase of $6 million for current levels.


The 1994 education budget provides a 5.6 percent increase over 1993's allocation.

The Safe Schools Act would provide $75 million to help school districts establish their own programs to reduce crime and violence.

A new multi-agency, urbanrural initiative would receive $15 million from the Department. The Departments of Agriculture and of Housing and Urban Development would be the lead agencies for this initiative which would assist six urban and four rural communities integrate education and social services.

The Department's school-to-work transition initiative would be supported by $135 million from the Department of Education and a similar amount from the Department of Labor. The joint effort would support state and local efforts to reduce the school dropout rate.

Economic Conversion

The budget proposes to cut defense spending next year by $14 billion, affecting communities with military installations and those with defense contracts. The defense budget proposes to increase funding for programs to assist individuals and communities affected by the downsizing of the Department of Defense to $3.3 billion for fiscal 1994, a move that will almost double funding available in the current fiscal year.

Assistance to individuals and communities is proposed to be funded at $1.1 billion for FY 1994.

Of particular importance to municipalities impacted by revised national priorities is the proposed $30 million for the Department of Defense (DoD) Office of Economic Adjustment which provides grants to local governments which have been significantly dependant on defense spending. The budget would provide $33 million in grants and revolving loans for impacted communities through the Economic Development Administration.

The administration is also proposing to increase funding for worker retraining and education programs by including $300 million for the Department of Labor's job training programs for dislocated defense workers (up from $75 million) and $100 million for Department of Energy personnel assistance (an increase of $75 million over current funding levels).

Superfund, Storage Tanks, Lead

Superfund--The budget proposes to redirect funding reductions for Superfund, the nation's hazardous waste site clean-up program, where EPA plans to "refocus" its efforts on enforcement by "shift[ing] cleanup financing from the Trust Fund to those responsible for polluting." Overall funding for the program is proposed to decline by $88 million to $1.496 billion for fiscal 1994.

Leaking Undergound Storage Tanks (LUST)Virtually level funding of $75.4 million (up $379,000 over current year levels) is being requested from the Leaking Underground Storage Tank Trust Fund for activities to clean up releases from leaking underground tanks containing petroleum or other hazardous substances. The trust fund revenues are available for removal of abandoned leaking tanks and associated clean-up and is financed by a one cent per gallon tax on motor fuels. $64.8 million of the amount requested will go to states through grants or state cooperative agreements-an amount identical to current funding levels.

Lead Abatement--A new program, the Residential Lead-Based Paint Hazard Reduction Act, passed as Title X of the Housing Act, is proposed to be funded at $15 million. Title X establishes "approximately 30 [new] EPA mandates."

Ten million dollars of the new funding is slated to go to states to assist them in developing "programs to train lead abatement workers, accredit worker training programs and laboratories and certify abatement contractors" to reduce the hazards of lead- based paint.

If you have any questions, please contact Carol Kocheisen in NLC's Office of Policy & Federal Relations at 202-626-3020.

Water Programs

While details are as yet unavailable, the administration is proposing a new state revolving loan program (SRF) for both drinking water ($600 million) and for a water infrastructure program which would in effect, be a revised and reduced Clean Water Act ($1.198 billion, down from current funding levels of $1.927 billion). Funds to municipalities, with the exception of a targeted $100 million grant program, would be available only as repayable low interest loans.

Of the $1,198 billion slated for Clean Water Act (water infrastructure) funding, a total of $868 million would be available for a new water infrastructure SRF targeted for loans to municipalities. This is a decrease of $436 million below current funding for loans to cities and towns. The administration proposes to broaden the categories of activities eligible to be financed by a new water infrastructure SRF to include combined sewer overflows, stormwater management, and implementation of a National Estuaries program.

The administration is proposing a new State Revolving loan fund (SRF) program of $600 million for fiscal 1994 for low interest loans to municipalities to implement federal Safe Drinking Water Act mandates. Overall funding for drinking water programs is proposed to decline $1.5 million to $143.8 million within which funding for public water system grants will remain virtually unchanged at $58.9 million.

Federal Transit Administration

FTA, formerly UMTA and renamed under ISTEA, would receive $4.6 billion in assistance for public transportation, a 21 percent increase above FY 1993 levels, maintaining the current levels of $802 million for operating assistance under the Section 9 program. The entire Section 9 formula request would be $2.455 billion, with $1.46 billion for urban capital grants, $132 million for Section 18 capital and operating grants for areas under 50,000, and $59 million for Elderly and Disabled Grants.

The Section 3 discretionary program - financed by the Mass Transit Account of the Highway Trust Fund for major capital investment and new starts - would emphasize modernization and purchase of bus equipment. The $1.772 billion Section 3 budget requests $760 million for rail modernization by formula and $354 million to specific cities for extraordinary bus needs.

Employment & Training

Summer Youth Employment Program--The administration has requested $1.7 billion for FY 1994 of which $375 million is to be added to the $670 million already appropriated for the calendar year 1994 program.

For academic enrichment, the budget requests $400 million for calendar year 1994. The education component is designed to reverse the decline in reading and math levels that often occur during the summer break from school.

Dislocated Worker Assistance - The FY 1994 budget request of $1.9 billion for displaced workers, to provide a variety of employment and training services to approximately 850,000. This amount is a $1.4 billion increase over current services.

Federal Aviation Administration

The FAA budget would increase by $61 million above FY 93 levels including a $79 million increase in the Airport Improvement Program, a formula program for public airports.

The administration proposed extension of the Essential Air Services Program at the authorized levels of $38.6 million for fiscal year 1994. The program provides payments to commercial air careers to smaller cities which lost air service following deregulation.

Crime and Safety

The 1994 budget requests a total of $100 million for new Federal/State and Local Partnership initiatives. Such programs include $50 million for state and local community policing and training efforts. In addition to state and local governments, qualified community organizations would be eligible to apply for these funds to create or supplement community-policing programs. Other uses of these funds include hiring new officers or redeploying existing officers.

The budget also includes a $25 million Police Corps program that would provide scholarships to college students interested in pursing a career in law enforcement in exchange for a commitment to serve as state or local police officers.

The budget would continue to fund the state and local law enforcement block grant at FY 1993 funding level. No changes are proposed to the distribution of funds.

$25 million has been requested to establish a criminal records upgrade program to implement the requirements of the yet-to-be- passed, NLC-supported Brady Bill. The upgrades would enable a national background check to screen unauthorized persons from illegally purchasing handguns.

If you have any questions, please contact Janet Quist in NLC' s Office of Policy & Federal Relations at 202-626-3020.

Health Budget

Total federal spending on health is projected to continue to increase at double-digit rates despite a number of administration proposals to hold down the costs of health care to the federal government.

Child Immunization--The FY84 budget recommends that Congress appropriate increased funding to carry-out the childhood immunization program that the administration wishes to initiate in the current year (FY93).

Building from the originally enacted 1993 spending level of $440 million, the three-phase program is planned to be launched through the stimulus program this year with an addition of $300 million. The second phase is an addition of $100 million to the program in FY 94, bringing the total spending in that year to $840 million. The third phase would occur in FY 95, predicated on the passage of a three bill immunization, package of legislation which was presented to Congress by President Clinton on April 1 st.

AIDS Spending--The administration is recommending nearly a $500 million increase in spending on both HIV/AIDS research as well as direct services provided through the Ryan White Act.

Help With Financing the Health Care Costs of Immigrants--The budget would make available $842 in previously appropriated funds to pay for costs previously incurred by state and local governments for expenses associated with immigrant services, many of the costs being for health care services.


The $40.2 billion Department of Transportation budget request would fully fund highway programs authorized under the nation's surface transportation program--the Intermodal Surface Transportation Efficiency Act (ISTEA)--and fund federal public transportation programs at 90 percent of the levels under ISTEA, still 21 percent above the fiscal year 1993 levels. The budget requests that Congress extend 2.5 cents of the federal excise tax on fuel for transportation funding instead of using it for deficit reduction. The Administration proposes to use 80 percent for highways and 20 percent for mass transit.

Early Childhood and Youth

The President's. budget would increase Head Start funding from the current level of $2.77 billion to $4.14 billion next year,-fund a new summer Head Start program at $514 million, and would increase the child care block grant program from $892 million this year to $933 million in 1994. Funding for Youth Gang Drug Education would be frozen at the current level of $10.7 million. The budget proposes increases in Even Start, in the Special Education Grants for Infants and Families program, and in Special Education Preschool Grants to complement the increase in Head Start and assist children in being ready to learn.
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Author:Shafroth, Frank; Kyle, John; Wollack, Leslie; Kocheisen, Carol; Peterson, Doug; Barreto, Julio; Ferr
Publication:Nation's Cities Weekly
Date:Apr 19, 1993
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