Omnibus Budget Reboot Raises Some Revitalization Funding, But Only Through September
A trillion dollar omnibus bill took little direction from President Trump’s ‘skinny budget’. EPA, HUD and Transit funds are safe for now, but a fight over 2018 budget looms.
Last week Congress passed a large omnibus spending bill to avoid a shutdown and continue funding the federal government through September. Like previous omnibus bills, this one bought the government more time and also managed to sneak in several upside surprises. While President Trump’s “skinny budget” proposal shocked municipal and local government leaders across the country with the prospect of losing several lifeline programs that pass federal funding through for local projects and keep many vital functions moving forward, including ongoing Superfund cleanups, the omnibus bill provides a wide blanket of financial support.
Many programs supporting community revitalization and economic redevelopment were carried over at 2016 funding levels. Some were actually increased.
EPA’s overall budget was reduced to $8.06 billion, only $81.4 million below 2016 levels. There are deep cuts to certain research programs, but overall staffing levels are held at the current number of 15,000 position. Brownfields received the same funding as 2016, $80 million, guaranteeing that the vital assessment and cleanup grants will proceed this year as normal. Superfund received a small $7.5 million increase.
The Appalachian Regional Commission (ARC) also received a small $6 million increase over its previous budget. ARC will leverage its modest $152 million across the region to support vital infrastructure, planning, economic development and (badly needed) workforce development.
Water infrastructure also received considerable attention in the omnibus bill. States are given greater authority to work with local communities burdened by unsafe drinking water—specifically lead—and the bill gives them greater latitude to provide debt relief. And funding to several programs supporting water infrastructure received increased allocations, including $10 million for a new Water Infrastructure Finance and Innovation program (WIFIA).
And rather than gutting the Department of Housing and Urban Development (HUD), the omnibus bill asked it to do more with more. Community Planning and Development programs received an additional $152 million over last year’s funding levels. The Tenant-Based Rental Assistance program jumped by $663.5 million and Project-Based Rental Assistance was increased by $194 million.The Choice Neighborhoods Initiative—a competitive grant funding program used to redevelop and rehabilitate public and HUD-assisted housing and revitalize neighborhoods—was increased by $12 million to $137 million total. Funding for Grants for Homeless Assistance received an additional $133 million over last year—and now the total targeted towards battling homelessness stands at $2.4 billion. The Housing for the Elderly Program received an additional $69.7 million. And Community Development Block Grants—the source of great consternation in recent weeks—were held at the same level ($3 billion).
Perhaps sensing the impending high cost of disruption to our built-environment, disaster relief funding was increased by nearly $1 billion dollars. HUD received $400 million for its CDBG disaster recovery assistance, but $528 million for the Emergency Relief Program for road and bridge repairs. Overall, the omnibus bill allocates more than $8 billion for emergency and disaster relief funding to fight wildfires, flooding and other natural disasters. (Not to mention $990 million for emergency famine relief, including $300 million earmarked for Food For Peace in war-torn South Sudan, Somalia, Yemen and Nigeria.)
Transportation funding was modestly increased. TIGER Grants were pegged at the same $500 million as the prior year; however, the Federal Transit Administration received a total of $12.4 billion—$657 million above 2016.
There was even $103 million to help combat rampant opioid abuse.
This is all welcome, especially when the alternative was draconian cuts. Without federal funding support many communities simply will not have the capacity to carry on. As Gary, Indiana Mayor Karen Freeman-Wilson mentioned on a recent panel about the proposed ‘skinny budget’:
“As mayor, I’m part firefighter and part planner… we’re just running from emergency to emergency, not being able to do the work to rebuild, build ladders out of poverty, and re-invent a … city that depended on industry that no longer exists.”
Such is the scale of the dilemma squaring up to global realities with local tools and tiny budgets. On the same panel Hartford Mayor Luke Bronin said he is similarly focused on fiscal challenges. “If the ‘skinny budget’ goes through, I don’t see any prospect for making up for that.” Nestor M. Davidson added that “if cities are going to be a gap-filler, and keep innovating, we have to have a strong understanding of the authority that cities have.”
They’ll need a lot more than authority to act. If cities, states or any government entities or organizations are to step into the gap created by a federal government retreating en masse as envisioned in the ‘skinny budget’ or similar proposals, then it’s going to take time, treasure and talent to scale up a response. If the baton is dropped, there is no backstop for infrastructure, remediation and redevelopment. Projects will simply stall. Our to-do list will only grow longer as our ill-fit and outdated built-environment atrophies that much more.
The truth is that it takes a lot of energy to turn the Titanic. If the goal is to structurally adjust EPA’s mission, for example, and redistribute EPA functions to the state level, then a temporary surge of resources would be required just like any corporate reorganization, merger or spin-off. The government has legal obligations to comply with, even more so than a corporation. Every major revision to every rule or regulation sets a burdensome bureaucratic process in motion. Every time an EPA rule changes, agency staff must draft the text of the new rule, then hire unbiased third-party consultants to calculate its economic impacts and public-health consequences. And the Agency must keep the public informed throughout the process. By law, its employees must process tens of thousands public comments and industry briefs, both for and against, that will always greet the proposal, withdrawal or change of every EPA rule.
It’s laborious, but it makes for effective implementation of the laws Congress passes. During the usual slow boil process, EPA builds up an administrative record that supports the agency’s action under a given rule. The administrative record contains reams of files with the complete history of the rule’s life and every single public comment received (and replied to). This kind of detailed due diligence and regulatory record building requires professional staff. It takes brainpower to write good policy, and then more brainpower to study the impacts of that policy. It takes good listeners to meet with the private sector—and lots of them to get to every voice in relevant sectors to engage or provide input into the process. And it can take years.
And despite dwindling resources (EPA personnel continued falling under Obama from 18,000 to 15,000), EPA maintains an excellent record in court because it does the due diligence necessary to make adjustments when Congress changes the rules or implements a new one. It has to. EPA can count on being sued by someone with each change.
If staff resources were cut—the ‘skinny budget' proposed reducing EPA staff by another 3,000 to 12,000—EPA may stumble from its stellar record of administrative rule-changing. Fast and loose rulemaking (or even careful and thoughtful rulemaking) can face legal obstacles that become bigger, more expensive problems later on. A complete and diligently prepared administrative record built through a detailed and engaged implementation process makes for a robust legal defense. It also happens to be a recipe for good policy.
On the other end of the project management spectrum, short-circuiting the process for sake of speed of change may very well have the opposite effect. Cutting back staff while simultaneously attempting multiple major pivots in the Agency’s mission only increases its vulnerability to legal action.
Similarly, handing off catalytic EPA or HUD functions to states and local government before ramp up on the other end will likely end in a lot of drops. To do it right, it would take simultaneous ramp ups on two levels: one at the federal level and then another at the state and local level. It's more or less a single effort at the federal level, but would require myriad efforts beyond. And each state, city, county and other local entity has its own processes to authorize, fund and manage government programs.
Right now, there is no plan and little hope of the surge on the order necessary for state and local governments to fill the gap—nevermind a realistic timeline just for planning and approval. Today’s municipal leaders are merely “firefighters,” as the mayor of Gary said, putting out one fire before running to the next. There is a serious shortage of staff, money and materials at the municipal level already.
Thankfully, the omnibus bill won’t ask states and locals to somehow do more with even less. For now, at least. The omnibus bill is only a short term fix that funds the government through September. The 2018 budget fight looms, whereupon we may take up all these issues again.
In the meantime, the redevelopment renaissance will build on. Interest rates are going up, but slowly. Hovering near historic lows, it’s still a very advantageous time to finance infrastructure investment. There’s also record cash on the sidelines looking to go to work, and enough pent up demand for infrastructure, redevelopment and community revitalization to soak up trillions of dollars.
But there may not be enough workers. Not without a surge in workforce development anyway. We’ll explore this issue and more in the next installment of our macro series.
See our previous policy coverage:
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