What’s in the Congressional Spending Bill for State and Local Governments

By Liz Farmer

In the federal spending bill expected to pass today, several government programs are getting funding boosts, including two that President Trump sought to eliminate a year ago.

Community Development Block Grants, which help fund an array of local government projects spanning from affordable housing assistance to small business loan programs, are set to see a $300 million increase in funding. That puts total federal funding at $3.3 billion for a program that Trump’s 2017 budget proposal had targeted for elimination. It’s also the first meaningful increase for the program since the early 1990s.

“Every year, it costs more to build roads and homes and to rehab facilities,” says the Urban Institute’s Brett Theodos. “So a program that’s the same dollar value every year is actually a shrinking program in terms of what it can produce on the ground.”

Congress also plans to triple funding for the Transportation Investment Generating Economic Recovery (TIGER) program that’s popular with states and cities. Funding for the program will increase from $500 million to $1.5 billion. That’s a huge boost given that only a year ago, administration officials were saying the program should be defunded and the money spent elsewhere. The majority of the increase will fund local and state multimodal and multijurisdictional projects that include things like transit, bike lanes and rail lines. Nearly one-third of the funding will be set aside for rural areas.

The budget, which would avoid another government shutdown, passed the House and the Senate. Trump, however, tweeted on Friday that he is “considering a VETO of the Omnibus Spending Bill based on the fact that the 800,000 plus DACA recipients have been totally abandoned by the Democrats (not even mentioned in Bill) and the BORDER WALL, which is desperately needed for our National Defense, is not fully funded.” On Thursday, White House officials had said he would sign the bill.

The funding boosts are not a total surprise since February’s spending deal included increases in domestic spending. But states were still doing a fair amount of guesswork when it came to anticipating exactly how much money certain programs would get from the feds, says John Hicks, executive director of the National Association of State Budget Officers.

“This is a really good budget for states as it relates to traditional programs where they partner with the federal government,” he says. “I’d say the numbers here in many areas are even higher than what states were counting on.”

For example, highway funding will get a $3.5 billion boost. More than two-thirds of the increase will come in the form of discretionary funding and will supplement what’s coming from the Highway Trust Fund.

Education funding will see a $2.6 billion increase, with $400 million of that being set aside for charter schools.

Child care development grants, which help pay for child care so that low-income parents can find work or go back to school, are set to almost double to a historic $5.2 billion in funding. The Center for Law and Social Policy called the boost a “significant win” that will help 230,000 children and their parents across the country.

Affordable housing scored some wins as well. It will see a 12.5 percent increase to the Low-Income Housing tax Credit and a two-year extension of the U.S. Interagency Council on Homelessness, which had faced defunding last fall.

And, with the 2018 elections looming and the probe into Russia’s 2016 election tampering in full swing, the bill includes $380 million in Help America Vote Act dollars to safeguard election security. The National Association of Secretaries of State said the “money will go a long way to aiding the states as they prepare for 2018 elections and beyond.”

The budget, however, doesn’t address a few issues pertinent to states and localities.

There’s no mention of a path to citizenship for 1.8 million so-called Dreamer immigrants. A deal on that reportedly fell apart after Democrats rejected a White House bid to extend protections in exchange for $25 billion in funding for a border wall. It also doesn’t reinstate subsidies to help stabilize the cost of insurance on state health insurance exchanges. And it takes away $4.5 billion — a 6 percent cut — from food stamps.

Additional reporting by J.B. Wogan.

Source URL: https://www.governing.com/week-in-finance/gov-finance-roundup-congress-spending-bill.html