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March 17, 2017
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Administration releases FY 2018 budget blueprint

This week, the Trump Administration released its budget blueprint for federal Fiscal Year (FY) 2018, which begins October 1, 2017.  The blueprint outlines $1.15 trillion in discretionary spending, representing a 1.2 percent decline compared to FY 17 levels.  Mandatory spending is not included in the proposal.  Defense and homeland security programs would see an increase in funding -- including a 10 percent increase in defense spending -- while other discretionary programs would see decreases.

Federal agencies that are responsible for programs relevant to regional planning activities in northeast Illinois would all see decreases in funding.  This Policy Update reviews each briefly.

Transportation

The U.S. Department of Transportation would see a 13 percent decrease in its overall funding, dropping from $18.6 billion in FY 17 to a proposed $16.2 billion.  The popular Transportation Investments Generating Economic Recovery (TIGER) grant program would be cut entirely, the transit Capital Investment Grants (also called "New Starts") would be restricted to current projects with full funding grant agreements, and Amtrak's long-distance trains would be cut.  Air traffic control would be moved to an independent, non-governmental organization, and federal support for commercial air service to rural airports would be terminated.

Moving forward, the budget proposal calls for all New Starts projects to be funded locally, essentially terminating the federal government's involvement in major transit capital expansion projects.  Doing so would further exacerbate the imbalance in federal support for major highway versus transit projects – while federal funds are currently eligible for 80 percent of highway project costs, they are only allowed to cover half of New Starts costs.

The region has been successful in securing TIGER grants over the past eight years, including substantial funding for the CREATE program of rail improvements, CTA Blue Line improvements, and the reconstruction of 147th Street in the south suburbs.  The region has also benefitted from the New Starts program, and was recently awarded a $1 billion full funding grant agreement for the CTA Red and Purple Modernization Program.  Chicago Union Station is Amtrak's busiest hub outside the Northeast Corridor and serves as the terminus for seven long-distance routes.

Housing and economic development

The U.S. Department of Housing and Urban Development would also see a 13 percent decrease in overall funding, dropping from $46.9 billion in FY 17 to a proposed $40.7 billion in FY 18.  In part, these cuts would come from the elimination of the Community Development Block Grant (CDBG) program, HOME Investment Partnerships Program, and the Choice Neighborhoods Program, along with a decrease in the Section 4 Community Development and Affordable Housing program.

HOME provides formula-based funding for affordable housing development, while CDBG offers formula-based assistance for eligible communities to spend on neighborhood revitalization, economic development, and improved services.  The Choice Neighborhoods program provides planning and implementation grants to neighborhoods with distressed public or public-assisted housing.  In 2016, agencies in Illinois were awarded about $150 million in CDBG funding, including some $105 million awarded to municipalities and counties in northeastern Illinois.  Local agencies have also received disaster relief funding through the CDBG Disaster Recovery program, such as the $83 million received by Cook County in 2013 after spring floods.

The U.S. Department of Commerce would see a 16 percent decrease in funding, dropping from $9.2 billion in FY 17 to a proposed $7.8 billion in FY 18.  Cuts includes the elimination of the Economic Development Administration (EDA) and the termination of the Manufacturing Extension Partnership (MEP).  With EDA and MEP support, the CMAP region bolstered its global competitiveness with multi-county economic development strategies and provided cutting-edge technical assistance to small and medium-sized manufacturers.  The U.S. Department of Labor would experience a 21 percent cut in funding, falling from $9.6 billion in FY 17 to a proposed $7.1 billion in FY 18.  Several job-training programs would be reduced or eliminated.

Environment

The Environmental Protection Agency (EPA) would see a 31 percent decrease in funding, falling from $8.2 billion in FY 17 to a proposed $5.7 billion in FY 18.  Cuts would come from a variety of the EPA's programs, including the elimination of the Great Lakes Restoration Initiative (GLRI), the Clean Power Program, and other climate change programs.  Local projects funded through the GLRI include a number of stream restoration and stabilization projects, improvements to Northerly Island in downtown Chicago, and prevention measures, such as electric barriers, to keep invasive species from crossing between the Great Lakes and Mississippi River basins.  The proposed FY 18 budget would include a modest increase for local drinking and wastewater infrastructure via the State Revolving Fund program. 

Within the proposed Department of Commerce's budget, programs for coastal and marine management would be eliminated.  It is unclear whether the proposed cuts to the National Oceanic and Atmospheric Administration's research programs would affect the Midwest Regional Climate Center, which provides high quality climate data and applied research on climate-related issues, including the threat posed by the West Nile virus.

Within the Department of Energy's budget, energy efficiency programs like the Weatherization Assistance Program and Energy Star would be eliminated.  CMAP helped to initiate the Energy Impact Illinois program, which was launched with funding from federal energy efficiency programs. 

Moving forward

In short, the Administration's proposals for the FY 18 would substantially reduce federal support for the nation's transportation, housing, economic development, and environmental protection programs.  Several programs of particular importance to northeastern Illinois would be eliminated or significantly reduced.  The overall direction of the budget proposal is inconsistent with GO TO 2040, which supports innovative, future-oriented investments in infrastructure and human capital to support the region's long-term prosperity and quality of life.

This week's release of the Administration's budget blueprint is the first step in a longer process, with a more detailed budget proposal and Congressional action expected later this spring.  As outlined in the agency's 2017 Federal Agenda, CMAP calls on federal policymakers to support initiatives and programs that acknowledge the interconnected nature of transportation, land use, and economic development issues, and to provide levels of funding commensurate with the necessary federal leadership in these areas. 

CMAP will continue to monitor the development of the FY 18 budget closely, articulate the agency's policy positions to our Congressional delegation and other stakeholders, and outline potential impacts on the region's transportation, land use, housing, environment, and economic development goals.

 


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