February 6, 1997

(2/6/97) Reaction To President's 1998 Federal Budget Proposal

The President's budget this year proposes several initiatives that mayors have called for and that mayors will support on Capitol Hill. While we are never pleased when a budget proposal calls for any cuts in established programs that have helped cities, as this one does in several cases, we must keep the gains and losses in perspective: the President's goal of strengthening communities is clearly in evidence here.

• BROWNFIELDS -- To redevelop "brownfields" the budget calls for $88 million -- an increase of $50 million -- for the Environmental Protection Agency program which funds local brownfields site assessment, redevelopment planning and local revolving loan fund capitalization. Another $25 million would come from HUD to help leverage state, local and private funds to redevelop the cleaned-up sites and create jobs. And another $2 billion over five years would come from a tax incentive designed to help spur private sector clean-up activities. This budget reflects the fact that momentum for brownfields redevelopment, one of the mayors' highest priorities, is building.

• EDUCATION -- The President proposes several new education initiatives for school districts including a $5 billion fund to leverage new construction or renovation in districts with substantial need. America Reads would provide $2.45 billion over five years to recruit and train over a million tutors to teach reading in early elementary grades. $250 million in new grants would go to reduce unemployment among out-of-school youth in high poverty areas, including Empowerment Zones and Enterprise Communities. $50 million would help keep schools open during non-school hours, giving students access to after-school educational and recreational activities. And funding for the time-tested Head Start program would increase $324 million to $4.3 billion.

• WELFARE -- The budget contains several new initiatives to help states and localities move people from welfare to work, including $3 billion over three years in performance-based grants to states and cities for job creation and placement, an expanded tax credit for employers who hire long-term welfare recipients, and support for several transportation initiatives intended to assist in getting welfare recipients to jobs. It also proposes the partial restoration of some of the cuts in food stamps and immigrant assistance which were included in the welfare reform law. The budget would continue to provide benefits to individuals without children, age 18-50, who cannot find jobs and limit benefits to six out of 12 months to those who will not take jobs. It would make modest increases in Food Stamp benefit levels. It would restore SSI and Medicaid to legal immigrants who become disabled after entering the U.S. and provide Medicaid to eligible legal immigrant children.

• CRIME -- The budget proposes $1.37 billion in community policing grants, enough to put 17,000 additional officers on the streets. To address youth gangs and violence, it proposes $100 million for prosecutorial services, $50 million for a new juvenile court initiative and $75 million for a local youth crime intervention initiative. On the other hand, the budget proposes no funding for the $523 million Local Law Enforcement Block Grant, a grant which provides funds through a highly targeted formula directly to local governments for a variety of law enforcement activities. In cities like Chicago, which currently receives $18.4 million through this program, these flexible funds have augmented COPS funds as part of a comprehensive anti-crime package.

• DRUG CONTROL -- The budget would increase federal drug control spending by five percent, to $16 billion. Even though slightly more of the increase would go into demand reduction, the budget continues to spend nearly twice as much money on supply reduction. Proposed is a coordinated, multi-agency approach to combating all types of substance abuse -- including tobacco and alcohol -- among young people. Funding for the Drug Enforcement Agency to combat methamphetamine use would be increased by $11 million.

• ISTEA -- The budget reflects the Administration's intent to seek renewal of the Intermodal Surface Transportation Efficiency Act (ISTEA) in a form consistent with the current program structure that was created in 1991 -- a structure strongly supported by mayors.

• COMMUNITY DEVELOPMENT/HOUSING -- Within the Department of Housing and Urban Development we see a mix of gains and losses. The Community Development Block Grant would remain at the current $4.6 billion level. The HOME Investments Partnership program is cut by $100 million to $1.3 billion. Section 108 Loan Guarantees are cut from $1.5 billion to $1.26 billion. The Economic Development Administration is cut from $349 billion to $319 billion. At the same time, Housing Opportunities for Persons with AIDS is increased from $171 million to $204 million. Community development banks are increased from $50 million to $125 million. Empowerment Zones and Enterprise Communities would be expanded. While HUD's budget authority overall would increase from $19.3 billion to $24.8 billion, nearly all of the $5.5 billion increase would go into renewal of Section 8 contracts now terminating or expiring.

• EMPLOYMENT/TRAINING -- The budget proposes level funding for the summer youth employment program and small increases for adult, youth, and dislocated worker training programs.

• ARTS -- The President's proposal to fund the National Endowment for the Arts at $136 million -- a 37 percent increase over the amount appropriated by Congress -- would help restore the 40 percent cut incurred by NEA last year.

CONTACT: Mike Brown, (202) 861-6708.

The United States Conference of Mayors

J. Thomas Cochran, Executive Director
1620 Eye Street, NW, Washington, DC 20006
Telephone (202) 293-7330, FAX (202) 293-2352

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