Official Presidential FY 2018 Budget Released: It’s Officially Bad for Planners
The President officially unveiled his FY 2018 budget proposal this morning, shifting $54 billion away from critical domestic programs and making a devastating disinvestment in the nation's communities.
A New Foundation for America's Greatness is the President's full, detailed budget proposal and includes specifics and explanations for the plan originally outlined by the "skinny budget" preview released in March. The full budget largely mirrors the "skinny budget" and proposes many of the same cuts. Unlike the skinny budget, though, the full budget also contains a broad outline of the President's $1 trillion infrastructure proposal.
APA condemned the cuts proposed by the skinny budget and APA President Cynthia Bowen, AICP, issued a strong statement against the proposal. This statement was sent to every member of Congress and is available on APA's Legislative Action Center for APA members and stakeholders to send to their own legislators.
The President's budget proposal is merely that — a proposal that does not carry the force of law.
Congress controls the nation's spending and will ultimately decide what to accept or reject within the President's proposal. Regardless, it is important to speak out strongly against this proposal. APA will continue to fight the President's budget proposal and work with Congress to advocate for responsible funding levels for programs critical to good planning.
Housing and Urban Development (HUD)
Identical to the skinny budget, the full budget eliminates community development programs from HUD and slashes its budget over 13 percent.
The Community Development Block Grant program (CDBG), the HOME Investment Partnerships program, and the Choice Neighborhoods Initiative are all proposed for complete elimination and "devolves community and economic development to the State [sic] and local level, and redirects federal resources to other activities."
The President also proposes serious cuts to public housing, stripping over 68 percent of funding from the critical Public Housing Capital Fund that provides resources to housing authorities to maintain and improve their public housing stock.
In 2010, HUD estimated a $19 billion backlog of deferred maintenance, a number that has likely doubled since that estimate. This has resulted in the loss of nearly 10,000 units of public housing per year and is a strain on communities that are grappling with deteriorating housing infrastructure in their neighborhoods. The budget proposal also states that the administration is working toward a "comprehensive package of rental assistance reforms," though it does not offer much detail about what will be in the package aside from rent reforms.
Finally, the budget proposes the elimination of the National Housing Trust Fund. The Trust Fund was originally authorized in the summer of 2008 by the Housing and Economic Recovery Act (HERA), setting aside fees generated by Fannie Mae and Freddie Mac for the production of affordable housing for very-low income people. However, shortly after the passage of HERA, Fannie Mae and Freddie Mac collapsed as the recession began and Congress placed the Government-Sponsored Entities into receivership and halted all payment to the Trust Fund before any funding was provided.
Since the recession, the GSEs have recovered and the Obama administration ordered funding to begin flowing into the National Housing Trust Fund in 2016.
Department of Transportation (DOT)
The full budget proposal maintains the cuts to transportation programs outlined in the skinny budget, despite the President's continued focus on rebuilding the nation's infrastructure in the budget proposal. The budget calls for full funding of programs under the Highway Trust Fund, but slashes discretionary FAST Act programs by nearly 50 percent.
The President recommends the elimination of the TIGER program, which the President described in the skinny budget release as "award[ing] grants to projects that are general eligible for funding under existing surface transportation formula programs." The budget also cuts the Capital Investment Program (New Starts) to $1.232 billion — a $928 million reduction from current levels, and Amtrak by $774 million.
Department of the Interior
The President's FY 2018 budget proposes funding the state assistance program under the Land and Water Conservation Fund (LWCF) at $90 million, a cut of about $20 million from the FY 2017 enacted level. It also proposes a change to the primary funding stream for state assistance grants under LWCF. Rather than using discretionary funding, the administration proposes mandatory funding for state assistance from an account that collects leasing fees paid by offshore oil and gas developers in the Gulf of Mexico.
While a steady revenue stream is critical for state assistance, money from the offshore leasing fee account (referred to as GOMESA) was meant to be an addition to discretionary funding, not a replacement. Robust funding for state assistance is critical to supporting community park and recreation projects.
Because discretionary funding for state assistance is eliminated and replaced by GOMESA funds in this budget proposal, it remains unclear how much, if any, of the $90 million would be directed to the Outdoor Recreation Legacy Partnership (ORLP) program in FY18. ORLP is a competitive grant program that directs state assistance dollars to urban communities through competitive grants. In FY17 it was funded at $12 million, and APA urges decision makers to maintain level funding for this essential grant program in FY18.
Infrastructure
As expected, the Trump administration used the release of the full FY2018 budget to outline its proposed infrastructure initiative. The budget calls for $200 billion for infrastructure with the goal of leveraging a further $800 billion in non-federal investment for a total of $1 trillion.
This initial $200 billion in funding would be offset by unspecified spending cuts in other programs over a 10-year budget period.
The budget outlines some key principles for an infrastructure plan with specific details and language to be released later. According to the "fact sheet" released by the White House, the infrastructure plan will be based on four principles:
- targeted federal investments
- state and local "self help" incentives
- shifting more services and assets to the private sector
- leveraging the private sector
The administration's budget blueprint for infrastructure calls for expanding the existing TIFIA loan and loan guarantee program, funding WIFIA for water projects, lifting the cap on Private Activity Bonds, creating a revolving fund for infrastructure finance, establishing partnership grants, and reducing tolling restrictions on existing interstate highways.
The budget also underscores the Trump administration's desire to overhaul the project review process. The proposal points to an effort to speed up environmental reviews and a new pilot program to test a streamlined review process. While some of that initiative can be undertaken via executive action, major changes in environmental reviews would require action by Congress.
The full budget also reflects the transportation cuts proposed in the previous "skinny" budget, such as elimination of popular TIGER grants, major Amtrak cuts, and limiting transit New Starts grants to projects that already have funding agreements.
In previous comments, Transportation Secretary Elaine Chao indicated that a full infrastructure proposal would be released later this year. Congressional action is unlikely before this fall. Many of the proposed cuts to existing infrastructure programs will meet with strong opposition on Capitol Hill during the budget process.
Previously, APA outlined key principles for a new federal infrastructure program and will continue to engage with congressional offices to advance these ideas. Over the coming days, APA will carefully evaluate the administration's infrastructure proposals outlined in the budget and provide further analysis of the potential impacts.
APA has also signaled strong opposition to the proposed cuts and program eliminations for vital community and planning resources. Today's budget only underscores the need to continue pressing that case on Capitol Hill.
Budget and Appropriations Process Going Forward
The President's budget proposal officially kicks off budget and appropriations work for the upcoming fiscal year. The House and Senate will now get to work drafting budget resolutions, and the appropriations committees will invite the heads of departments and agencies to testify on their budget proposals throughout the next month.
After the hearings, appropriators will start drafting spending bills and bringing them up for a vote. In theory, Congress is responsible for passing all 12 bills prior to the beginning of the fiscal year on October 1. The late arrival of the President's full budget proposal will put a serious time constraint on this process and will make it nearly impossible to fulfill regular budget and appropriations order, a tough lift in any fiscal year.
Though Congress will attempt to move as many appropriations bills forward as possible, it is likely that at least a short-term continuing resolution (CR) will need to be passed in September to maintain government operations beyond the end of the fiscal year on September 30.