Budget is a double whammy for region
Trump’s proposal would increase local costs while gouging area’s revenue
For the Washington region, the best thing about President Trump’s budget is that Congress will probably change it, officials and analysts say.
Unfortunately, the result may not be a whole lot better.
The White House plan, issued Thursday, would deliver a double whammy to the federal capital and its suburbs.
As in the rest of the country, it would cut federal spending in ways that stick local and state governments with sharply higher costs to protect the poor, improve transportation and safeguard the environment.
That could stall or reverse highprofile efforts by District Mayor Muriel E. Bowser (D) and others to reduce homelessness and narrow the income divide in a metropolitan area marked simultaneously by great wealth and deep poverty.
But the federal budget is likely to have an even greater impact on the Washington region than else-
where because of Trump’s pledge to dramatically shrink the federal civilian workforce. The plan would cost at least 15,000 local jobs in the first year and drain at least $2.6 billion from the regional economy, according to one estimate.
That would reduce tax revenue and make it harder for local governments to fill the gap created by lower federal spending on social services and other programs.
“We’re potentially going to get hit with a slowing economy and a reduction in federal assistance,” Maryland state Sen. Richard S. Madaleno Jr. (D-Montgomery) said. “It definitely has the potential to sink the regional economy into a significant recession.”
The Trump administration said it wants to cut domestic programs that are wasteful, ineffective or better handled by local government.
But it wants to boost spending on the military and cybersecurity, two areas important to the Washington regional economy that could partially offset reductions in agencies responsible for health, social services and the environment.
Still, local officials and experts expressed increasing alarm as they analyzed the White House’s proposed budget. The initial outcry focused on headline-grabbing moves to defund the federal program to clean up the Chesapeake Bay and to potentially kill the light-rail Purple Line in suburban Maryland.
The budget also would deeply cut federal funding across the region that is vital to providing more affordable housing in an area with soaring rents and home prices. It would slash support for job training and Meals on Wheels. And it could kill a program that helps 22,000 households in the District alone to pay electric and home heating bills.
Local county and municipal leaders said their coffers don’t have anywhere near enough money to replace the lost revenue. They would face hard choices over whether to raise taxes, shift funds from schools or other priorities, or reduce services for their neediest residents.
“Some of the most painful cuts are to funds that help low-income individuals get back on their feet so that they can become productive and successful members of the community,” Fairfax Board of Supervisors Chairman Sharon S. Bulova (D) said. “Shifting funding responsibility to state and local governments is a death sentence to these services.”
Some local leaders expressed hope that Congress will soften the blow, noting that lawmakers have the final say over the federal budget and typically give White House proposals a thorough rewrite.
“There’s no sugarcoating this,” Montgomery County Executive Isiah Leggett (D) said. “The challenge for us, number one, is to make sure that these cuts don’t come to fruition.”
Some programs on the chopping block — such as Community Development Block Grants, which fund numerous programs to help the poor — have enjoyed broad political support in the past.
But Republicans control both houses of Congress, and many of them were already pushing for changes that could hurt the region, in the eyes of the Democratic elected officials who dominate it.
GOP defense hawks want to increase military spending beyond the level proposed by Trump, which could result in sharper cuts on the civilian side. And while many Republicans want to protect environmental and farm programs, the State Department, and foreign aid, the GOP appears less interested in preserving spending on programs important to the Washington region’s housing and other anti-poverty efforts.
The Republicans “have the entire legislative and executive branch of government,” Leggett said. “When they’ve got both of those, it becomes much more difficult to stop.”
New hurdles to housing
In both the District and the inner suburbs, Trump’s budget would dismantle a patchwork of federal programs that the jurisdictions rely on to create housing for their most vulnerable residents.
It also cuts a variety of other programs that serve the elderly, disabled and unemployed.
“It’s a vicious plan, really,” George Mason University economist Stephen S. Fuller said. “This will discriminate against smaller and poorer jurisdictions, particularly the populations that were targeted as needing these kinds of services. This deepens the division between the haves and the have-nots.”
Trump’s plan calls for eliminating funding for Community Development Financial Institutions, a Treasury program that helps entice developers and investors to build housing and businesses in low-income neighborhoods.
Without it, experts say, the effectiveness of the District’s Housing Production Trust Fund could be severely curtailed. Bowser has poured $100 million a year into the fund, but without federal incentives, the money would only stretch a fraction of the distance in coming years.
More immediately, Trump’s budget could eliminate funding for more than 1,000 of the city’s allotment of roughly 11,000 federal housing vouchers, according to an analysis by the Center on Budget and Policy Priorities.
Depending on how the cuts are implemented, hundreds of lowincome families, seniors and homeless veterans waiting for units could be cut off from new placements.
Combined, experts said, even half of Trump’s proposed cuts would all but upend Bowser’s pledge to end chronic homelessness in the city by the end of the decade.
“It likely will result in increasing our homelessness statistics in the District,” said Stephen Glaude, president of the Coalition for Nonprofit Housing and Economic Development. “Where we’ve been making progress, this will slow us down.”
Elected officials in the suburbs have similar worries. In anticipation of Trump’s plan, Fairfax stopped enrolling new clients for housing vouchers about a month ago. Last year the program helped pay rents for 9,000 people in the county; their incomes averaged $17,470.
Alexandria Mayor Allison Silberberg (D) said her small city would lose two grants from the Department of Housing and Urban Development totaling $1.2 million in the coming year if the budget passes.
“These two programs provide affordable housing for renters and homeowners, and energy assistance that literally helps people pay for heat in the winter and cooling in the summer,” Silberberg said. “These programs are not abstract. They’re real. People’s lives are on the line.”
In Prince George’s County, officials estimate the jurisdiction would lose $3 million for nutrition programs for the elderly and for a foster grandparent program. It also would lose about $7 million of federal funds for job training, which represents almost its entire budget for that purpose.
Trouble on two fronts
At the same time that local governments would struggle to protect services decimated by the White House plan, they would face a shrinking tax base as federal workers lose their jobs.
George Mason’s Fuller, a longtime expert on the region’s economy, said the proposed budget would lead to the loss of between 15,000 and 24,600 federal jobs in the area in the first year. About 370,000 people in the area hold federal jobs now.
The loss in payroll income, combined with an expected drop in federal spending on procurement, could mean a reduction in total federal revenue in the region of between $2.6 billion and $3.9 billion annually, he said.
“We could be worse than that, depending on what this Congress does,” Fuller said.
The region’s highest-ranking Republican elected official, Maryland Gov. Larry Hogan, sought to deflect criticism of Trump’s budget by emphasizing that it might never come to pass.
In an email to a reporter, Hogan’s spokesman, Douglass Mayer, began, “As you know, Congress sets the budget on the federal level, and they haven’t passed a budget in eight years (or more).”
Then, in response to specific questions about the budget’s potential impact on Maryland, Mayer wrote six times: “If any of these proposals ever become law or even draft legislation, we will take a serious look at how to address them during our own budget process.”