State Braces For Pain From Bush Plan

February 7, 2005
By DAVID LIGHTMAN, Washington Bureau Chief

WASHINGTON -- President Bush today begins rolling out the tough, more incendiary details of his agenda as he unveils his fiscal 2006 budget and the expected wrenching cuts in popular community and social service programs.

State and local officials in Connecticut are bracing for bad news. One of the most obvious victims is expected to be the Community Development Block Grant program, an important way of paying for neighborhood improvements.

The program is expected to be cut sharply - it is likely to be consolidated along with 17 other programs for a total savings of $1.8 billion, according to reports - and the reverberations could be felt locally in ways big and small.

In Hartford, for instance, the program now helps to pay for an array of services, including weekend senior meals, after-school youth programs and a Blue Hills Civic Association initiative to shovel snow and rake leaves at the homes of seniors.

Also expected to be cut are Amtrak, school aid and a host of health-related programs.

"It's going to be a painful budget for Connecticut and the entire region," said Richard Munson, executive director of the Northeast-Midwest Institute, a Washington-based research group.

After weeks of lofty rhetoric and historic speeches, today the White House gets down in the political trenches.

Connecticut should not see the budget as a doomsday document, said David Keating, executive vice president at the Club for Growth, a Washington-based conservative research group.

"You have to look not just at individual programs, but the impact of the overall budget," Keating said. Cutting spending will ultimately mean lower deficits and a healthier economy, which will benefit everyone, he argued.

Connecticut's $13.3 billion general fund gets about $2.5 billion from Washington. The state also gets $600 million more in transportation and grant money - plus military contracts, help for health care and other payments.

Although the overall total is not expected to drop drastically, the state has at least two reasons for concern today.

One, the federal deficit is expected to reach $427 billion this fiscal year, sharply limiting how much Washington spends on the dozens of programs the state wants funded.

Bush wants to cut projected deficits in half by 2009, which means few increases, and lots of cuts, in the array of aid programs. In his State of the Union address last Wednesday, he said he would hold the growth of discretionary programs - which include many of the state and local aid packages - to less than the inflation rate.

The second worry is that the state's ability to reverse these trends is diminishing as political power shifts to the Sun Belt.

Perhaps the most deeply felt cuts could come from the community grant program, long a favorite of older communities, particularly in the Northeast.

According to Capitol Hill sources, the administration is planning not only to cut funds, but shift the program from Housing and Urban Development to the Commerce Department.

Activist groups are concerned such a shift would change the program's mission. About one-fourth of community grant program money last year was used for housing-related programs such as rehabilitation and assistance for first-time homebuyers.

In addition, there are reports the program would be changed to award money on a competitive basis, meaning towns and cities would have to fight for funds. Now, cities like Hartford are guaranteed money based on formulas that take into account income, population, housing stock and other factors.

"It's very unsettling for everybody," said Karen L. Winey, Hartford grants program administrator. Hartford has already seen cutbacks. It got $4.4 million in community grant money from this year's federal budget, down 5.6 percent from the previous year.

The program has a broad reach in the city. Among its expenditures:

The Blue Hills Civic Association gets $12,500 annually to serve 125 young people. They are dispatched throughout the neighborhood to shovel snow, rake leaves and deliver community newspapers to seniors.

The San Juan Center gets $20,000 for its after-school program, which helps pay for services to 65 children.

Center City Churches receives $35,000 a year for its weekend senior meal program, the only program of its kind in the city. If funding is cut, Winey said, "they will probably have to cut down on weekends. They can't cut back the number of meals; you can't say you'll only serve the first 50 people."

Hartford Areas Rally Together CHARGE/HOME Program and Urban League of Greater Hartford Inc. each received $67,500 this year to help people move from rental units to city home ownership.

Other programs aimed at helping low-income people, such as housing subsidies, Medicaid and health care, also are expected to be cut significantly. They tend to have "less powerful backers than many other programs, such as farm programs or NASA," noted Robert Greenstein, director of Washington's Center on Budget and Policy Priorities.

Under health and human services, for instance, reductions are possible in programs for mental health, maternal and child health, preventive health, child care, community services and curbing substance abuse.

Connecticut's funding for each of these programs was cut in the fiscal 2005 budget, and more reductions are expected.

Less dire is the outlook for transportation and energy. Regional economist Matt Kane thought low-income energy assistance would be funded at slightly below this year's total.

The one transportation component facing big trouble is Amtrak; the president is expected to recommend eliminating the company's federal subsidy.

Bush is expected to continue funding maintenance on the Washington-to-Boston corridor, but ending the $1.2 billion subsidy Congress approved last year to keep the system running.

The fight over these and other programs will probably go on until the Christmas season. With record deficits and a determined, freshly re-elected president fighting for the cuts, Connecticut will have a huge fight on its hands.

"The Bush administration has made it clear," said Kane, "they are very serious and determined to cut this deficit, and they want significant cuts."