Community Development Block Grants (CDBG) reduced
CDBG is a critical source of flexible community development funding for cities and communities. In the past, President Bush has moved to eliminate the program and replace it with a much smaller program under the Commerce Department, but was thwarted by Congress. The FY08 proposal recommends a formula change that would substantially reduce the number of eligible communities. The budget proposal is more than $1.3 billion less than FY04 levels and represents a roughly 20 percent cut from last year. When adjusted for inflation, CDBG is approximately half what it was in 1981.

CDBG
FY08 Budget: 3 billion
FY07 Continuing Resolution (H.J. Res. 20): 3.7 billion
FY06 Enacted: 3.7 billion

HOPE VI program for public housing “zeroed out”
The HOPE VI program provides funding for the conversion of distressed public housing projects into redeveloped, mixed-income communities. The Bush Administration has argued that the program has achieved its objectives and should be eliminated. The new budget again calls for zero funding. The FY08 request also calls for rescinding the $99 million provided by Congress in FY06 for HOPE VI. In recent years, Congress has rejected this approach and provided limited funding, though overall levels have declined steadily.

HOPE VI
FY08 Budget: 0
FY07 Continuing Resolution (H.J. Res. 20): 99 million
FY06 Enacted: 99 million

Brownfields Economic Development Initiative (BEDI) “zeroed out”
Like HOPE VI, BEDI has been regularly targeted for elimination in recent budgets. Congress has provided minimal funding with $10 million in 2006. The majority of federal brownfields funding is provided through the Environmental Protection Agency, but BEDI provides not only an additional source of funding but also has eligible uses that can spur development associated with remediation and reuse. Section 108 loan guarantees are eliminated in the proposed budget.

BEDI
FY08 Budget: 0
FY07 Continuing Resolution (H.J. Res. 20): 10 million
FY06 Enacted: 10 million

HOME program for affordable housing and homeownership increased
HOME provides formula grants to states and localities to fund various affordable housing or homeownership activities. The budget provides a $200 million increase from FY06 levels, but HOME funding has been essentially flat in recent years, with the FY08 proposal down slightly from FY04 appropriated levels. HUD does call for doubling the American Dream Downpayment Initiative to $50 million, increases homelessness assistance by $118 million from expected FY07 levels, and boosts the HIV housing program by a modest $14 million.

HOME
FY08 Budget: 1.9 billion
FY07 Continuing Resolution (H.J. Res. 20): 1.7 billion
FY06 Enacted: 1.7 billion

Environmental Protection Agency
The proposed FY08 budget for EPA is $7.2 billion, a cut of 6.6 percent from the expected FY07 appropriations based on the House-passed continuing resolution. In FY06, EPA received appropriations of $7.6 billion.

EPA’s smart growth office is the federal government’s most significant smart growth program. Unfortunately, the budget calls for cutting funding and staff from the innovation program area of the environmental program and management section of EPA, which houses EPA’s smart growth program. The President’s budget explicitly targets that office for reductions in staffing and budget.

The bad news continues for other growth-related budget items. The Clean Water State Revolving Loan Fund is slated for a $400 million reduction from the expected FY07 funding of $1 billion approved in the House passed long-term continuing resolution. This is likely to meet with great opposition, especially since the House Transportation and Infrastructure Committee last week approved a huge increase to $20 billion over five years (H.R. 720).

Other programs, including various brownfields programs, will hold relatively flat.

Brownfield Projects
FY08 Budget: 89.3 million
FY06 Enacted: 88.7 million

Brownfield Sec. 128 Grants
FY08 Budget: 49.3 million
FY06 Enacted: 49.5 million

Brownfield EPM
FY08 Budget: 24.5 million
FY06 Enacted: 23.4 million

Clean Water State Revolving Loan Fund
FY08 Budget: 687.5 million
FY06 Enacted: 837.5 million

Drinking Water State Revolving Loan Fund
FY08 Budget: 842.2 million
FY06 Enacted: 837.5 million

State and Local Air Quality Grant
FY08 Budget: 185 million
FY06 Enacted: 220 million

State and Tribal Assistance Grants
FY08 Budget: 2.7 billion
FY06 Enacted: 3.1 billion

Environmental Program and Management
FY08 Budget: 2.29 billion
FY06 Enacted: 2.33 billion