Agenda - Council - 08/27/1985 - Laserfiche WebLink

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� I Mayors, Managers, and Clerks Page 2 ' CDBG Cut 15 Percent - No Termination Senate Appropr Only Cuts 10 Percent More confusion for cities stems from the contradictions also present in action taken last Friday by the Senate Appropriations Committee which approved CDBG funding with only a ten percent reduction under current funding levels ($3.125 billion) as compared with the budget resolution dust passed by Congress calling for a 15 percent cut to ' $2.94 billion. The House had earlier called for a 10 percent reduction in FFY '86, and a freeze at that level for '87 and '88. ' The difference of $185 million could be affected by a decision by the Senate Appropriations Committee to accept the budget target enacted by Congress. The Senate committee maintained current levels of funding for the HUD's Secretary's Discretionary Fund ($60.5 million) to be available to deal with unusual circumstances that will likely result from proposed program cuts. In addition, funding was also retained for the Section 108 loan program used for economic development by CDBG entitlement cities. Also retained was the Section 312 rehabilitation loan program. Funding retained by the ' Senate committee action would provide technical assistance and revenues for special projects if the committee's current actions are sustained. t UDAG Reduced 20 Percent UDAGs, threatened with elimination and steep cuts throughout budget negotiations, actually retains a bit more funding than had been approved earlier by the House. Final budget resolution provides $352 million for the program in FFY '86, as compared with $440 million in FFY 1 85, a 20 percent reduction. The House had previously proposed cuts of 25 percent. Other Budget Resolution Action p Other programs affecting cities also faired better in the final budget resolution than in earlier proposals. Mass transit funding was reduced by 15 percent, whereas the ' Senate had proposed a 20 percent cut. The Economic Development Association, slated for terminated by the Senate, cut by 20 percent, and no elimination of the program was approved. In addition, conferees rejected the Administration's efforts to drastically reduce and eliminate housing assistance programs. What Did not Happen No action was taken to limit or cap any non -needs entitlements, despite early NLC support and indications of some movement during negotiations. No freeze on tax expenditures or defense spending resulted from the resolution. There, too, NLC policy did not prevail. But, NLC's top priority, General Revenue Sharing, actually emerged far better than it might have been - foreseen just weeks ago. Budget deficit reduction, however, is still a very large question left unanswered. With Congress in recess now until September 4, it will be important for cities to communicate their views on the saving of needed programs for cities and the continued need for Congress to more carefully and systematically examine the rapid growth of tax expenditures while avoiding the addition of difficult and costly mandates for local government.