State Watch

Trump budget blueprint shifts costs to rural voters who elected him

Greg Nash

President Trump’s budget outline released last week sent shockwaves through state and county offices across the country, as the administration forecasts a major policy shift that would put billions of dollars in obligations on the shoulders of cash-strapped local governments — including many rural communities that voted heavily for Trump in November.

The blueprint, which suggests cutting billions in funding from several departments, would shift the responsibility to pay for key programs from the federal government to state and local governments. And while the budget is virtually certain to undergo significant rewrites, local officials worry that it hints at the administration’s future plans to reshape state and federal relations.

“The budget was a shock. We knew the president was going to do things differently. I don’t think we knew how differently,” said Matt Chase, executive director of the National Association of Counties. “It’s almost this seismic shift, the federal government saying we’re going to step back and it’s up to you, state and local” governments.

{mosads}The new approach should be no surprise to those who followed Trump on the presidential campaign trail, the administration said. 

“That shift was telegraphed by candidate Trump months and months and months ago,” said John Czwartacki, the top spokesman at the Office of Management and Budget. “You had an American First candidate, you’ve got an America First president, and now you have an America First budget.”

“You have a shift programmatically to state and local governments, trust in people who are closer to the problems, closer to where real voters live,” Czwartacki said. “Taken as a whole, what we want to do overall with this budget is we’re trying to breed economic opportunity. The president’s agenda is going to do that across the board.”

The budget blueprint shows deep cuts to security, economic development and low-income assistance programs. It would slash $667 million from the Department of Homeland Security’s state and local grant program. It would eliminate Community Development Block Grants, a $3 billion program that pays for local economic development projects. And it would eliminate the Low Income Home Energy Assistance Program (LIHEAP), which last year sent just over $3 billion to the states to help heat the homes of low-income Americans.

An analysis by the National Governors Association obtained by The Hill estimated that the budget would slash $1.5 billion from a workforce-training program administered by the Department of Labor. It would also cut $210 million from the State Criminal Alien Assistance Program, which reimburses four states for costs associated with detaining undocumented immigrants accused of crimes.

In a conference call Thursday with the nation’s governors, Office of Management and Budget Director Mick Mulvaney laid out the administration’s priorities in broad generalizations before apologizing and leaving for his next appointment. Governors still on the call with White House staffers watched minutes later as Mulvaney appeared on television to brief reporters, multiple senior aides to governors said.

On the call, several governors raised questions about cuts to programs important to their states. Maine Gov. Paul LePage (R) asked about specific cuts to low-income housing subsidies. Missouri Gov. Eric Greitens (R) asked about cuts to the Community Development Block Grant Program. 

White House staff did not offer specific answers to those questions and others. The staff promised to respond to each question in more detail, though those responses have yet not reached governors’ offices. A source close to Mulvaney said the director wanted to spend more time with the governors, but he was pulled off the call to attend the press briefing.

Spokespeople for LePage and Greitens did not respond to requests for comment.

Local officials in several states said the cuts do not represent actual cost savings to taxpayers, because state and county governments will have to pick up the slack by raising taxes. Unlike the federal government, states must balance their budgets. If those states pass costs on to counties, smaller rural areas with tiny tax bases are most likely to bear an unmanageable burden.

“We have restrictions on us in terms of what we can do in terms of revenue,” said J.D. Clark, the Republican chief executive of Wise County, Texas. “If we’re just shifting [costs], we’re not fixing a lot here.”

“It’s going to be a big impact as you shift the cost to the locals,” Athens County, Ohio, Commissioner Lenny Eliason (D) said. “It’s not a real savings to the taxpayers, it’s just a cost shift.”

Mark Poloncarz, the Democratic executive of Erie County, N.Y., said cuts to LIHEAP will fall disproportionately on the heads of rural voters in his county.

“There’s approximately 22,000 households in Erie County that rely on the HEAP program to pay for the heat in winter months that are in rural areas,” Poloncarz said. “They would have difficulty paying for their heat in the winter, and I think that would be a rude awakening for many of them.”

But the OMB said the proposals are meant to deal with a national debt that is approaching $20 trillion.

“President Trump didn’t consult with special interests or lobbyists to build this budget. He is not beholden to anyone other than the American people, rich or poor, urban and rural,” Czwartacki said. “When we have a near $20 trillion federal debt, which means more than $60,000 on the head of every man, woman and child in this country, we have to be careful before we spend a dime on any program.”

Clark, the county judge in conservative Wise County, which gave Trump 84 percent of the vote in November, said cuts to the Community Development Block Grant program would be especially costly to small rural counties trying to repair or develop new infrastructure. Two towns in Wise County, which is experiencing significant growth from the nearby Dallas-Fort Worth metroplex, have used the grants to build new sewer and wastewater treatment facilities. 

While large counties such as Los Angeles County can float bonds or go to Wall Street in search of capital to replace the lost federal funds, smaller rural counties — which overwhelmingly backed Trump in November — will have a more difficult time finding revenue.

Those smaller rural counties will suffer from cuts, too, to local economic development spurred by some of the agencies the Trump budget proposes to cut altogether. The budget proposes ending the Appalachian Regional Commission; the Delta Regional Authority, which covers 252 counties in eight states along the Mississippi River; and the Denali Commission, which supports rural towns in Alaska.

The budget blueprint also proposes ending the Economic Development Administration, which provides grants to stimulate economic growth in states and localities. The administration says those grants are duplicative of others offered through the departments of Agriculture and Transportation.

“We don’t see how this budget helps an unemployed coal worker in Ohio. They’re losing their workforce training money, they’re losing some of their housing assistance, their heating assistance,” Chase said.

Some local officials said they were optimistic about provisions in the blueprint that would roll back regulations imposed or considered by the Obama administration, including the Waters of the United States rule and a Labor Department rule governing overtime pay.

“It looks like there’s going to be an opportunity with some of these budget cuts to roll back some regulations that have been a concern to local governments,” Clark said.

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