By Jason Johnson, Dale Liesch and Jane Nicholes
With a Republican in the White House and GOP majorities in both houses of Congress, it’s likely the conservatives who’ve long called for federal budget cuts will get their wish in the coming fiscal year.
When President Donald Trump’s proposed budget leaked from the Office of Management and Budget last week, its key points were consistent with promises he made as a candidate. Notably, “the budget blueprint to make America Great Again” includes a 10 percent increase in military spending — bringing the possible defense budget to $574 billion in 2018.
Those proposed increases and a defense appropriations bill that pushes for a larger naval fleet have been welcome news for Austal USA, which employs around 4,000 people in Mobile building two vessels for the United States Navy.
However, the additional funding for defense and homeland security is made possible through deep cuts proposed in other federal programs, and with agencies with large local footprints in the crosshairs, the Mobile area could have as many budgetary losers as it does winners when Congress begins ironing out the details.
While Alabama’s representatives in Washington are quick to point out Trump’s recommendations are just that, many also have a general support for his fiscal priorities.
“This process has only just begun, and the beauty of our system of government is that while the president has an important role in identifying key national priorities, it is Congress that decides how taxpayer dollars are spent,” Alabama Sen. Luther Strange said. “I am encouraged that the president’s proposal prioritizes efforts to rebuild the military and cuts the influence of the EPA down to size. These are promising first steps for the thousands of Alabamians behind the cutting edge technologies used by our armed forces, as well as those who have struggled under the prior administration’s overreaching regulations.”
HUD cuts would impact Mobile
Chairwoman Kimberly Pettway told Lagniappe the Mobile Housing Board has long feared drastic reductions such as the $6 billion cut proposed for the U.S. Department of Housing and Urban Development in Trump’s first budget.
“It does not appear that affordable housing is a priority for this administration,” she said. “We had hoped to see otherwise.”
With that said, MHB will be somewhat insulated, as all of its properties slowly make the transition to the Rental Assistance Demonstration program. That will allow MHB to partner with private developers to inject more capital into projects; former Executive Director Dwayne Vaughn previously said the program would prevent MHB housing from reeling too badly from major cuts at the federal level. Instead of relying on funds for low-income public housing, RAD allows agencies to move to a voucher-based system, under a 20-year deal, where private developers manage the properties.
While that program helps stabilize funding year after year, the current budget proposal would strip more than $300 million away from HUD’s housing choice voucher [Section 8] program and pull more than $1.3 billion in funding from public housing repairs, according to Eric Jefferson, director of Mobile’s Housing First.
When asked if agencies could work around that level of cuts, Jefferson said “It depends.”
“No,” he said. “Not unless they give specific tax cuts to organizations that will make up the difference.”
The cuts would have an impact on some of MHB’s “supportive services,” Pettway said.
“If things remain as they appear, I fear we’re going to be quite constrained as [it] relates to supportive services,” she said.
“You certainly can’t have a $6 billion cut without feeling it. We’re remaining hopeful.”
U.S. Rep. Bradley Byrne, R-Montrose, said if the budget cuts make it through Congress intact, agencies like MHB would have to be more proactive in working with private developers in order to create housing options for low-income residents.
“We want to see more done with less money,” Byrne said. “We need to be thinking outside the box.”
The goal of public housing, Byrne said, is to ultimately get residents out of it.
“We don’t want to lock people into public housing forever,” he said. “It’s a sign of [government] failure, if someone has spent their whole life in public housing.”
In addition to cuts to low-income public housing, the possible reduction in the HUD budget could completely wipe out funding for the HOME program, which provides federal money for the development of new affordable housing units in the state. Ashley Kerr, project manager for the Low Income Housing Coalition of Alabama, said since there is no state money allocated for affordable housing Trump’s cuts could hit particularly hard.
“When it came out we were expecting it to be bad,” she said. “It’s pretty devastating to Alabama going forward.”
The HUD cuts would also eliminate the Choice Neighborhoods planning grant program, Kerr said. MHB benefited from two Choice Neighborhood grants in the last few years. The grants helped the board organize community meetings related to its transformation plans for properties on the city’s north and south sides.
The budget also calls for elimination of the Community Development Block Grant program, which would have a negative impact on the city.
Byrne called CDBG a “good program that has worked well for big and small towns.”
“I hope we don’t cut it,” he said.
Other cuts, such as those reported to hit the U.S. Coast Guard, might not actually happen, Byrne said.
Defense spending increases
Trump’s spending plan looks to increase military spending by more than $50 million, which could be good news for the Mobile area. The increase means a need for the full complement of 52 Littoral Combat Ships, Byrne said.
In addition, the budget would mean more ships being built at Ingalls in Pascagoula, where a large number of Byrne’s constituents work.
Byrne said the increased spending for the military was a must for two reasons. He said the U.S. has been living off an advantage it gained in the Cold War for more than 20 years. At the same time, the country’s adversaries — such as North Korea, Iran and others, including terrorist organizations — have been increasing their investment in weaponry, Byrne said.
“The gap is closing,” he said. “It would be irresponsible for us not to recognize it.”
He compared the U.S. now to 1930s Europe during the rise of Germany and Adolf Hitler.
“We don’t want to get caught flat-footed,” he said.
While he had no new details on the proposed Interstate 10 bridge over the Mobile River, Byrne said there are tax credit programs within the proposed budget that could bring the long-awaited project closer to reality. Byrne said the federal government is currently waiting for the Alabama Department of Transportation to move forward before anything further can be done.
Mobile Bay NEP
Despite being a reliable bloc in one of the country’s reddest states, Alabama’s Gulf Coast has a cultural and economic softspot for environmental protection, as evidenced by nationally recognized conservation programs like the Forever Wild land trust.
Mobile Bay National Estuary Program Director Roberta Swann said when she moved from Massachusetts it was evident people on the Gulf had “water running through their veins.”
“You would think everybody would want to be an environmentalist because it’s what everybody does, but yet, it seems nobody likes environmentalists … we’re all tree huggers,” she joked. “I found out pretty quickly most of that is just semantics — everybody’s a conservationist, but to be an environmentalist means you’re a liberal.”
No matter the label, Swann and her staff would be significantly affected if the 31 percent cut to the Environmental Protection Agency in Trump’s budget comes to pass. Unlike some grant-funded organizations, the country’s NEPs are funded through a specific line item in the EPA budget because the program is authorized through the Clean Water Act.
MBNEP has spent more than a decade evaluating environmental stressors that affect the local estuary and produced a number of comprehensive plans to address those issues and making growth planning more sustainable in the future. It’s also undertaken some of the more planning-oriented projects funded with money from the BP oil spill — stretching its $600,000 federal allocation into restoration work valued in the millions.
Swann said while its current model requires outside grants and local support, MBNEP’s success in securing those additional funding sources has been possible in part because the EPA funds the majority of its operating expenses. Though still it’s unclear what a 31 percent reduction to the EPA would mean locally, Swan said MBNEP would almost certainly have to rethink how it prices out labor for grant applications and work performed for local governments.
“The diversity of our funding sources has helped keep us resilient against cuts, but that’s not to say that a 31 percent cut wouldn’t make a huge dent in our program,” Swann said. “However, we’ve been told time and again that the president recommends, but Congresses decides, and we have strong congressional support.”
Weeks Bay Reserve
Another organization that would be directly affected by cuts to the EPA is the Weeks Bay Reserve, which could lose 70 percent of its funding if Trump’s proposed budget cuts come to pass.
The Baldwin County land reserve receives funding from the National Estuarine Research Reserve System (NERRS), which is part of the National Oceanic and Atmospheric Association — another agency that appears to headed for deep rollbacks of its congressional funding.
“It’s going to take some time for anything to happen,” Executive Director Yael Girard said. The budget year for which the cuts are targeted is fiscal 2018-2019, so the cut would not go into effect until Oct. 1 of 2018, she said.
But the foundation isn’t taking any chances and is publicizing the risk now. If there is no public outcry, the cut could get lost among the rest of the proposals in the budget and by the time it comes before Congress, it could be too late to save NERRS, Girard said.
With only 30 percent of its funding remaining, the Reserve would have to shut down most or all of the research being conducted on Weeks Bay. Current projects include studies on the best ways to use plantings to help stop erosion and preserve coastline. Planting density, how well plantings do in certain sands or soil, slopes and the effects of sea level rises are examples.
Girard said researchers are gathering the information in anticipation of receiving funds for restoration from BP oil spill money. Not only will that information not be available if NERRS is eliminated, but graduate students who are doing the research might not be able to complete their advanced degrees, she said.
Girard said the education component could also suffer, as schoolchildren might not be able to visit the reserve for programs. Overall, roughly 8,000 people visited the reserve last year.
Effect on ADEM
Part of Trump’s approach to EPA funding relies on states taking a more active role in funding and enforcing their own environmental policies. While that idea is supported by many congressional Republicans, not every state prioritizes the environmental equally.
While Byrne is no stranger to criticizing the EPA, he told Lagniappe he does have concerns with how a blanket cut to the agency might impact an already underfunded Alabama Department of Environmental Management.
“What’s true about ADEM, and true with a lot of other agencies, is that the state provides minimal or sometimes no funding, which has made them overly reliant on the federal government,” Byrne said. “The problem is, the federal government is going to be making some serious cuts, so the leaders of Alabama are going to have to decide what it is we want and what we’re willing to pay for, instead of sitting back and waiting on Uncle Sam to send a check.”
If the state budget cleared the Legislature today, it would mark the third year ADEM has received little to no operational dollars from the state — a steep reduction that prompted a 100 percent increase in the agency’s permitting fees since 2014.
Currently, almost 40 percent of ADEM’s budget comes from EPA grants that fund the state’s enforcement of federal environmental laws. Under Trump’s proposal, though, those grant programs would also be trimmed by 30 percent, which Director Lance LeFleur said would likely mean a 15 percent reduction in ADEM’s overall budget.
“Most of our costs are personnel costs, so when we look at costs, we look at them in terms of reductions in staffing,” LeFleur said. “If we take the cut of 30 percent and apply it to our budget, we would be looking at a reduction of somewhere around 40 employees, which is around 7 [percent] to 8 percent of our overall headcount.”
According to LeFleur, though, that percentage isn’t far from ADEM’s “normal attrition rate,” which is why he said the agency isn’t anticipating layoffs but could end up looking at “a kind of hiring freeze.” However, LeFleur said ADEM’s workload will likely see a comparable reduction because the administration and EPA head Scott Pruitt plan to eliminate a number of programs.
The problem environmental organizations like Mobile Baykeeper have with LeFleur’s assumption is ADEM’s history of “lax enforcement” before the state began slashing its allocation to the department in 2008.
According to Baykeeper Executive Director Casi Callaway, even before those cuts a single employee would be responsible for monitoring and inspecting thousands of permits related to stormwater construction sites, water and air quality, underground storage and more.
“The list of things ADEM does, or is supposed to do, is massive, and even though [LeFleur] is saying they’ll only lose around 40 people, we’ve already lost 100 people just from what’s happened at the state level,” Callaway said. “It’s impossible to do all that, so they don’t do it, and what you’re going to find is the majority of that is going to be pulled from monitoring and enforcement.”
Callaway said her biggest concern is ADEM’s funding dropping to a level that would prevent it from enforcing the law on violators even when organizations like Baykeeper bring them to the state’s attention. With no regulatory authority of the industries that receive environmental permits, Callaway said there’s only so much watchdog groups can do.
“The biggest thing the environment is going to lose is someone ensuring businesses, industry and developers abide by the law,” she added. “We’re losing the cop, even if it was an ineffective cop to begin with.”