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February 9, 2015

White House Releases FY16 Budget Proposal

On February 2, 2015, the Obama Administration released its $4 trillion budget proposal for federal Fiscal Year 2016 (FY16), which will begin October 1, 2015.  In its proposal, the Administration would reverse the effects of budget "sequestration" and increase discretionary spending by 7 percent.  The budget would rely in part on tax increases, particularly a tax on foreign-held earnings of U.S. corporations, to support the increase in spending levels.  CMAP has reviewed previous budget proposals for FY15, FY14, and FY13.

The federal budget significantly influences several topic areas of interest to CMAP and its partners.  Three key topics include transportation, housing, and economic development.  The Administration's budget proposal includes a six-year, $478 billion transportation reauthorization program, described in a separate Policy Update.  The remainder of this post describes the proposal's housing and workforce and economic development provisions.

Housing

The budget proposal would provide $49 billion to the U.S. Department of Housing and Urban Development (HUD) for its programs, a total increase of $4 billion compared to FY15.  Of particular note, the proposal would provide $2.8 billion to the Community Development Block Grant Program (CDBG), $1 billion for the HOME Investment Partnerships Program (HOME), and $250 million for the Choice Neighborhoods 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.  In addition, the Choice Neighborhoods program provides planning and implementation grants to neighborhoods with distressed public or public-assisted housing.  While the proposal would increase funding for the Choice Neighborhoods program by $170 million and the HOME program by $100 million, it would reduce CDBG funding by $200 million. 

In addition, the FY16 budget outlines a new HUD grant program to support local and regional planning for housing.  The $300 million Local Housing Policy Grants program would offer funding to local jurisdictions and regional coalitions "seeking to create new policies, program or regulatory initiatives to create a more elastic and diverse housing supply."  The program would require collaborative partnerships to address the related issues of housing, affordability, transportation, employment, and economic mobility.  

Workforce and Economic Development

The budget proposal would provide $9.8 billion to the U.S. Department of Commerce, representing a substantial $1.3 billion increase compared to FY15.  The proposal would increase funding to the Economic Development Administration (EDA) by $23 million for a total of $273 million.  The EDA supports regional economic development planning, and the budget includes $25 million for a Regional Innovation Strategies Program to further this work.  Additionally, the proposal includes $39 million for a Partnership Planning Program to support local economic development planning efforts.

The budget proposal includes numerous provisions to support education and job training, including tuition-free community college for eligible students, a new American Technical Training Fund, and a $3 billion program to support science, technology, engineering, and math (STEM) education.  More specifically, the STEM initiative would consolidate existing federal programs and provide streamlined funding for STEM-focused high schools, STEM teacher preparation, undergraduate STEM education, and research into STEM learning and teaching.

The budget proposal also includes numerous provisions to support manufacturing industries, for example by launching seven new advanced manufacturing institutes, supporting research and development, and establishing a new American Made Scale-Up Fund to support the commercialization of advanced manufacturing technologies.  The Chicago region has benefited from similar programs and is already home to one advanced manufacturing institute, the Digital Manufacturing and Design Innovation Institute.  Also, the Chicago Metro Metals Consortium was awarded the Investing in Manufacturing Communities Partnership distinction in 2014, making the region eligible for a variety of federal funding streams to support growth in metals manufacturing.  The coalition of public and private sector stakeholders will also work with CMAP's Local Technical Assistance (LTA) program to evaluate the impact of potential infrastructure investments on the region's metal manufacturing cluster.

FY16 Budget Proposal and GO TO 2040

The Administration's FY16 budget proposal includes substantial increases in funding for the nation's transportation, housing, and economic development programs.  Much of the emphasis is consistent with GO TO 2040, including promoting innovation through investments in research, development, and commercialization, supporting the development of industry clusters and  for human capital, along with additional resources for housing options. 

The budget also proposes a new fund for comprehensive planning through the Local Housing Policy Grants program.  This would continue some elements of the Sustainable Communities Initiative (SCI) by providing funding for multijurisdictional and/or regional planning that addresses housing supply and elasticity as well as jobs/housing imbalance through coordinating planning for housing, transportation, land use and the regional economy.  SCI was a key source of local funding for comprehensive and integrated planning efforts throughout the country, and provided funding for the creation of CMAP's LTA program in 2010.  Planning comprehensively for the interrelated nature of transportation, land use, and economic success is critical to the long-term viability of communities and the region overall.

As federal policymakers consider the Administration's FY16 budget request, CMAP calls on them to support initiatives and programs that address the interconnected areas of transportation, land use, housing, the environment, and economic development, in addition to support for regional comprehensive planning efforts. CMAP's federal agenda outlines principles that will help to guide the agency's support or opposition to specific pieces of legislation over the course of the federal legislative calendar.