Inside208

Breakdown of President Obama’s Final Budget

Posted on February 16, 2016 by Dene Westbrook

Last week, President Obama released his final budget proposal and there are significant notable items for local governments. Below is a brief summary of some key items. For the entire budget you can visit the White House’s online resource, which is a pretty neat tool for exploring the proposal.

The President’s budget totals a record $4.1 trillion. Approximately $1.2 trillion is discretionary, with that being split in half between military spending and domestic programs. One of the biggest items that stands out is the $320 billion influx of revenue over 10 years from a $10 per barrel oil tax, which would equate to about $.25 per gallon. But this funding wouldn’t just go to building roads. In fact, the President’s proposal puts a much greater emphasis on transit and multi-modal transportation, increasing the spending ratio of highway to transit spending from 4 to 1 to 2 to 1 with $17 billion for FY 2017 under the “21st century Clean Transportation Plan.” Specifically, it would provide $20 billion above current levels to reduce traffic and provide new ways for families to get to work and school, $3.7 billion in grants for high speed rail, and $5.9 billion for safer, more efficient transit systems. It also allocated another $725 million in TIGER (Transportation Investment Generating Economic Recovery) grants and would make it a mandatory, ongoing program rather than the existing annually-authorized program.

In the Housing, Community and Economic Development budget, the proposal would expand and make permanent the New Markets Tax Credits, which promote investments in low income communities. HUD’s Fair Housing Initiatives Program would see a $6 million increase. There would be $15 million in additional funding for housing choice vouchers and $215 million for Economic Development Assistance Programs, which fund a variety of local and regional programs. However, Community Development Block Grants (CDBG) would see a slight decrease in funding – $2.8 from $3 billion.

The Department of Justice budget would be essentially flat, but there programs that would better benefit cities tucked within it. For example, a new $500 million for the 21st Century Justice Initiative program to help local governments reduce crime and build community trust with law enforcement. An additional $74 million is proposed for the COPS program (Community Oriented Policing Services) and a variety of other smaller local-government focused programs.

In the Environmental Protection Agency budget, there may be a nod to the Flint water crisis in the President’s budget via increased funding in the Drinking Water State Revolving Loan Fund of $157 million. However, this is offset by a decrease in the Clean Water SRF of $414 million. There are also modest increases in both the Brownfields Program and the Superfund program, both programs used for the restoration and redevelopment of abandoned or under-utilized industrial and commercial sites, which are frequently contaminated. On the energy front, the President proposed $2.9 billion to support a range of strategies aimed at reducing US reliance on oil, increasing energy affordability and increasing environmental responsibility.

The President’s budget is the first step in the process, and now it is up to Congress to determine if they will debate any of it or move forward with their own, or simply punt to a Continuing Resolution.

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at sminnick@mml.org 517-908-0301.

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