Mayors Worry Looming Federal Cuts Could Deal Heavy Blow to City Budgets

Canal Street in New Orleans, Louisiana

Canal Street in New Orleans, Louisiana Shutterstock

 

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“The only place you can take it from are the things that we use to actually protect our cities,” New Orleans Mayor Mitch Landrieu said in an interview.

WASHINGTON — After meeting with congressional leaders Thursday, mayors expressed unease over the possibility federal dollars going to cities could get crimped as President Trump seeks to increase funding for defense and security while slashing other spending.

Mayors visiting the nation’s capital said members of Congress they met with did seem supportive of preserving a tax exemption for municipal bonds—a priority for state and local governments.

But New Orleans Mayor Mitch Landrieu said there’s “general concern” that the ways the Trump administration will seek to pay for new spending will eat into federal dollars cities depend on.

“The only place you can take it from are the things that we use to actually protect our cities,” he told Route Fifty on Thursday.

Cutting funding for the U.S. Department of Housing and Urban Development's Community Development Block Grant program, or for initiatives like the U.S. Department of Transportation’s Transportation Investment Generating Economic Recovery, or TIGER, grant program, were two examples Landrieu mentioned.

He also said there was a need for greater federal support for local law enforcement and that the funding Washington has provided for this area has eroded over the years.

This has affected initiatives to help people with mental health and opioid addiction problems, Landrieu said, as well as the federal prosecution of gun crimes and money going toward homeland security grants. At the same time, he said: “Our local law enforcement have become the tip of the spear in pushing back on this new terrorist threat that we have in the country.”

Landrieu, a Democrat, is the current vice president of the U.S. Conference of Mayors.

Members of the conference were in Washington on Thursday to meet with congressional lawmakers and members of the Trump administration.

As for the federal income tax exemption for interest earned on municipal bonds, which is believed to reduce borrowing costs for state and local governments, Oklahoma City Mayor Mick Cornett, a Republican who is currently president of the Conference of Mayors, said: “We’re not hearing any pushback.”

States and localities commonly rely on municipal bonds to finance infrastructure projects.

Cornett made his comments after meetings with Senate Majority Leader Mitch McConnell of Kentucky, House Appropriations Committee Chairman Rodney Frelinghuysen, a New Jersey Republican, and U.S. Rep. Bill Shuster, a Pennsylvania Republican who chairs the House Transportation and Infrastructure Committee.

It's expected the Trump administration will release a budget blueprint later this month.

Community Development Block Grant, or CDBG, funds are a special area of concern for the mayors. The block grant program has been around since the 1970s and provides a flexible source of federal funding that localities can use for a wide variety of purposes.

For instance, the Kentucky Department for Local Government this week announced it had approved $220,000 in Community Development Block Grant funding for substance abuse and recovery programs in the city of Erlanger.

The city of Arlington, Georgia, was awarded $500,000 in CDBG funding last year for sewer improvements.

Those are just two of many examples of how the money gets used.

Asked if lawmakers the mayors spoke with Thursday gave any indication about cuts that could be proposed for the grant program, Cornett replied: “They acknowledged that that might come up, and we may have to fight for it.”

“The people that live in our cities send a lot of money up here and those CDBG dollars are one of the few sources we have that have some discretion to them,” he added. “Nobody knows what the specific needs in a city are better than the city government and the mayor.”

Bill Lucia is a Senior Reporter for Government Executive’s Route Fifty and is based in Washington, D.C.

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