Federal Budget Continuing Resolution Hits County Programs

Following weeks of debate over a possible Federal Government shut down, on Thursday Congress passed the 2011 Continuing Resolution (CR) for the remainder of the 2011 fiscal year.  The budget compromise trims $38 billion from the current operating budget, with particularly deep cuts to the Community Development Block Grant (CDBG) program. Funding for the CDBG was cut from $3.9 billion to $3.3 billion, a 16% cut from the FY 2010 level. The National Association of Counties (NACo) has been closely following the federal budgetary actions and its implications on local government funding levels. Below is an analysis provided by NACo of the impact the Federal CR has on county government programs.

Agriculture and Rural Affairs:
Part of the resolution funds USDA and the Food and Drug Administration (FDA), at nearly $20 billion, which is a decrease of almost $3 billion or 14% below the FY 2010 funding level. FDA received $2.3 billion, which is a 4%  increase above FY 2010. At this level the FDA can only fund some of the Food Safety Modernization Act, P.L. 111-353. USDA’s Food Safety and Inspection Service is funded at $1.01 billion, a 1% cut.

USDA Rural Development programs, which directly fund county infrastructure and development efforts, received significant cuts.  Housing and Community Programs, funding is $1.2 billion in budget authority, which is below the FY 2010 level of $1.4 billion. Rural Business and Energy Programs received $128 million – a devastating cut  31% below the FY 2010 level of $185 million. Rural Utilities Programs such as broadband, water and wastewater infrastructure received more modest cuts. The CR provides $598 million or 8% below the FY 2010 level of $653 million, but 25% above the original budget plan.
HUD Programs:
In addition to the CDBG reductions, The HOME Investment Partnership program is reduced from $1.8 billion to $1.6 billion for FY 2011. The Obama Administration’s Sustainable Communities Initiative, receives $100 million, a $50 million cut from the FY 2010 level. Homeless housing assistance grants are funded at increase of $40 million, $1.9 billion including $225 million for the Emergency Solutions Grant program. The HOPE VI program receives $100 million, a 50 percent cut from FY 2010 level of $200 million. The Section 8 voucher program is funded at $18.4 billion, with $16.7 billion for tenant-based voucher renewals, and $50 million is included for HUD-Veterans Affairs Supportive Housing (VASH) vouchers.
Environmental Energy:
The Environmental Protection Agency (EPA) under the Interior section of the CR would be funded at almost $8.8 billion. That is a funding decrease of $1.6 billion. The Clean Water (CW) and Drinking Water (DW) State Revolving Fund (SRF) programs will be cut $997 million below enacted levels to $2.5 billion. SRF programs help finance state and local water infrastructure projects.The Land and Water Conservation Fund for land acquisition received $301 million. That is $149 million below enacted levels. The Energy and Water section is funded at $31.8 billion in the CR. This is a $1.7 billion cut from FY 2010 levels. The Department of Energy (DOE) would be funded at $25.6 billion for the rest of the year. This is $10.7 billion under the 2010 enacted numbers. Within DOE, energy efficiency and renewable energy is slated to receive $1.8 billion, this is $407 million below 2010 enacted levels. The Army Corps of Engineers is funded at $4.9 billion; this is $578 below the 2010 enacted level. The National Oceanic and Atmospheric Administration (NOAA) budget was cut by $140 million below enacted levels to $4.6 billion.
Spending Affecting County Health Programs
Some of the most significant health policy provisions of the bill are not in it – namely, those measures that had been adopted by the House in H.R. 1, but were dropped from the compromise bill. These include provisions which would have defunded the Affordable Care Act (including the Prevention and Public Health Fund) and Title X family planning programs like Planned Parenthood. State Health Access Grants, which had been used by a handful of states to improve access to health care, are zeroed out. The program had been funded at $75 million last year. $5.66 billion is provided for the Centers for Disease Control and Prevention (CDC) which is a $730 million cut from last year’s level. The Health Resources and Services Administration (HRSA) gets $6.27 billion in discretionary funding, which includes Community Health Centers, health professions training, the Ryan White Care Act, and Title X Family Planning.  This is $1.2 billion below last year FY 2010 level. Some HRSA programs will receive new funding in FY 2011 through the Affordable Care Act.
Human Services Programs:
In general, human services programs fared very well in the continuing resolution. The Community Services Block Grant (CSBG), which had been slated for a substantial cut in H.R. 1 as well as the President’s FY 2012 budget, received $680 million, close to level funding.  CSBG remains very vulnerable in the next budget cycle, however. The Low-Income Home Energy Assistance Program had the biggest cut. It received $4.71 billion overall, a reduction of $390 million from the contingency fund. Senior nutrition programs received level funding $847 million, the same as FY 2010. The Child Care Development Block Grant (CCDBG) and Head Start received increased funding. CCDBG received $2.2 billion, a $100 million increase, and Head Start received $7.575 billion, a $340 million increase.
Justice and Public Safety:
The FY2011 Continuing Resolution severely cuts a number of programs important to county governments and local justice and public safety agencies. Justice and Public Safety programs are reduced with technical assistance or services important to counties by over $1 billion dollars compared to FY 2010 enacted levels.
Workforce Programs:
The Department of Labor funding level for the FY 2011 Continuing Resolution is $12.7 billion, an $800 million reduction from the FY 2010 enacted funding level of $13.5 billion.The bill provides a total of $2.8 billion for job training state grants for Adults, Youth and Dislocated Worker programs, which is $182 million below the FY 2010 level (this funding was completely eliminated in H.R. 1).
Under the legislation, Adult training is funded at $771 million — a 10.5% cut. Dislocated Workers is funded at $1.06 billion, about a 10% cut. Finally, Youth training is funded at $827 million; a cut of 10.4 percent from FY 2010 enacted levels.
The bill also provides $125 million for a new Workforce Innovation Fund to encourage states and regional partnerships to engage in systemic reform to improve program outcomes. The $125 million provided for the Workforce Innovation Fund reduces the percentage cut in WIA State Grants from 10.34 percent ($307 million) to a total net reduction of 6.13 percent ($182 million) to the grants.
Under the legislation, the FY 2010 $1.708 billion funding level for Job Corps programs is maintained, while $75 million in Job Corps construction funds is rescinded. Youthbuild is funded at $80 million, a $22.5 million (22 percent) reduction below the FY 2010 level. $125 million in FY 2010 funding for the Career Pathways Innovation Fund is rescinded (FY 2011 funding already was eliminated in an earlier funding bill from March), and funding reserved in FY 2010 for Transitional Jobs is eliminated. The bill reduces state WIA set asides to 5%, which allows more funding to flow to local areas.
Federal Land Management Agency Budgets:
Federal land management agencies received widespread cuts in the FY2011 continuing resolution. Department of the Interior agencies received the following reductions (compared to the FY2010 enacted levels): BLM -$18M, Fish and Wildlife Service -$141M, National Park Service -$127M, and the USGS -$26M. USDA Forest Service received reductions in National Forest System funding of $6M.   The Land and Water Conservation Fund (land acquisition) was cut by $149M. Both USDA and DOI Wildland Fire programming (including funding for the FLAME fund) received significant cuts totaling $529M.  Cuts to wildland fire budgets could prove to be a significant problem for fire prone portions of the country as many expect a high risk fire season in 2011. Without funding for the FLAME account and if fire suppression budgets are exhausted early, agencies will once again be forced to “borrow” critical funds from other USDA and DOI programs. Historically funds “borrowed” from other agency programs have not been repaid.
A number of transportation programs suffered significant cuts in the FY 2011 continuing resolution but most of the programs that directly affect counties are funded at current levels—that is the same funding as FY 2010. The largest cut is to high-speed rail, which received zero funding compared to $2.5 billion in FY 2010. This program was an administration priority however, Ohio, Wisconsin and Florida’s governors returned funds  for high-speed rail , creating overall problems for the program.  Amtrak was cut by $80 million in the capital improvement and debt service account, going from $1.02 billion to $922 million. However operating subsidy grants were level funded at $562 million thereby making service reductions unlikely.
The federal highway program, of great interest to counties, was level funded at $41.1 billion, unchanged from current funding to rehabilitate and construct the nation’s roads and bridges. About $2.5 billion in unobligated highway money from past years has been cut as well as an additional $630 million in 1998 and earlier earmarks that remain unspent. The Federal Transit Administration’s formula and bus grant program was not cut and will continue at $8.343 billion for FY 2011. The new starts and small starts program did sustain a cut of $400 million and is reduced from a FY 2010 level of $2.0 billion to $1.6 billion for FY 2011. A prior year’s funding of $280 million for a New Jersey rail tunnel was rescinded but that project had already been cancelled. The two aviation programs of concern to counties escaped unscathed. The Airport Improvement Program will, for the seventh straight year will receive $3.515 billion. Surprisingly Essential Air Service got $200 million for FY 2011—no cut at all. The FAA Facilities and Equipment Account took a $200 million cut to $2.733 billion for FY 2011, which will slowdown to build out of the NextGen air traffic control system. Finally the TIGER II program took a small cut going from $600 million in FY 2010 to $527 in FY 2011.

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