How Do State and Local Programs Fare in the Fiscal 2017 Federal Spending Deal?

The Wyandot County Courthouse in Upper Sandusky, Ohio

The Wyandot County Courthouse in Upper Sandusky, Ohio Michael Grass / Route Fifty


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Legislation has emerged to keep the federal government running through September. But tougher negotiations could be on the horizon for the upcoming budget cycle.

WASHINGTON — Funding levels for many of the federal programs state and local governments rely on are largely unchanged from the previous fiscal year in the roughly $1 trillion spending deal congressional lawmakers have reached.

The 1,665-page bill marks a rare compromise between Democrats and Republicans on Capitol Hill. If passed by Congress and signed by President Trump, the legislation would keep the federal government running for the rest of the 2017 fiscal year, which ends on Sept. 30.

Congress is expected to vote on the bill before the week is over. The federal government is currently operating under a one-week stopgap funding measure Trump signed last week.

White House budget director Mick Mulvaney during a briefing on Monday described the fiscal 2017 bill as “really solid” for the Trump administration and said it “lines up perfectly with the president’s priorities.”

But debates about fiscal year 2018 spending are on the horizon. And those negotiations could get tough. In the “skinny budget” proposal Trump sent to Congress earlier this year he proposed cuts that were steep and sweeping.

The plan calls for the total elimination of funding for programs and agencies that are spared in the fiscal 2017 legislation, such as the U.S. Department of Housing and Urban Development’s Community Development Block Grant program and the Appalachian Regional Commission.

“This was a bipartisan bill from the get-go,” Mulvaney said of the 2017 legislation. “What we're hopeful that we can see as we go through the 2018 process is more of a Republican-driven process, especially in the House.”

Below is a look at how funding levels for some of the programs affecting states and localities fare in the 2017 bill.


Community Development Block Grant program: $3 billion, same as enacted fiscal 2016 level.

Community Development Block Grants are a flexible source of funding local governments use for a wide variety of projects—rehabbing housing, upgrading sewers and improving parks are a few examples. The money also goes to support programs that assist people such as seniors citizens, the homeless and victims of domestic violence.

HOME Investment Partnerships Program: $950 million, same as enacted fiscal 2016 level.

The HOME program provides states and localities with grants meant to support affordable housing. The money goes toward activities like buying and fixing-up housing and offering rental assistance to low-income Americans.


Highways: The legislation would allow $44 billion from the Highway Trust Fund to be spent on highway and bridge improvements under the Federal-aid Highway Program. The amount is $905 million above the fiscal year 2016 level and is aligned with the levels authorized in the 2015 “Fixing America’s Surface Transportation Act,” or FAST Act.

Transit: The bill would limit “transit formula grants” from the Highway Trust Fund’s Mass Transit Account to $9.7 billion, an increase of $386 million over fiscal 2016 enacted levels.

High-Speed Rail: A GOP summary of the legislation notes that “no funding is provided for high-speed rail.”

Transportation Investment Generating Economic Recovery, or TIGER, grants: $500 million, same as enacted fiscal 2016 level.

TIGER is a competitive grant program open to state and local governments, along with other public entities like transit agencies and port authorities. The grant dollars have gone toward projects ranging from a streetcar line in Atlanta to safety improvements in New Mexico on U.S. 491, a rural highway in the Four Corners region.


Rural Development Water and Wastewater Infrastructure Loans: $1.2 billion, same as enacted fiscal 2016 level.

Rural Development Water and Wastewater Infrastructure Grants: $571 million, an increase of $49 million over the enacted fiscal 2016 level.


Office of Community Oriented Policing Services, COPS: $221 million, a roughly $9 million increase over the enacted fiscal 2016 level.

Community oriented policing focuses on building trust between police departments and the places they serve. The COPS program awards grants to state and local law enforcement agencies and provides other assistance.

Protecting Trump: The bill provides $27 million to reimburse state and local law enforcement for costs tied to protecting President Trump when he was still president-elect, according to a Democratic summary of the legislation.

Sanctuary Cities: The Democrat’s summary also says the legislation does not include “poison pill riders restricting so-called ‘sanctuary cities’ from receiving federal grants,” a reference to jurisdictions that limit their cooperation with federal immigration authorities.


The legislation provides the independent agency $152 million, $6 million more than its enacted fiscal 2016 funding level. The commission backs economic development initiatives in parts of 13 states spread across the Appalachian region.


Disaster Relief Fund: $7.3 billion is provided, of which $6.7 billion is designated for major disaster relief, $132 million more than the fiscal 2016 enacted level.


Total State and Tribal Assistance Grants: $3.5 billion, roughly in line with fiscal 2016 levels.

Funding is unchanged in the legislation for the Brownfields program—commonly used to redevelop old industrial sites.

Clean Water State Revolving Funds: $1.3 billion, same as enacted fiscal 2016 level.

Drinking Water State Revolving Funds: $863 million, same as enacted fiscal 2016 level.

These funds help support water and wastewater infrastructure projects.


Payments in Lieu of Taxes, or PILT: Fully funded at $465 million.

The program is intended to help offset the property tax revenue that local governments forgo because the federal public lands within their boundaries are non-taxable.

Secure Rural Schools:

A spokesman for the National Association of Counties said Monday he was not aware of any mention of the Secure Rural Schools program in the funding bill.

Secure Rural Schools funnels money toward more than 700 counties located near national forests to help them pay for schools, roads and other services. It was designed to make up for reductions in the amount of federal timber harvest revenues going to these places.

Ensuring that the program remains funded is a top priority for many rural counties and school districts in the western U.S.

The Senate Committee on Energy and Natural Resources has a hearing scheduled for Tuesday that is slated to focus on on PILT and Secure Rural Schools.

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

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