Agenda Packets - 1985/03/11 - Laserfiche WebLink

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2 COMMUNITY DEVELOPMENT BLOCK GRANT /I Community Development Block Grant funds to entitlement cities (those over 50,000 in population) may be cut by nearly one-fourth under the Administration's proposed budget plan for FY86. When OMB passed back the FY86 budget plan to HUD it recommended that in addition to the 10 percent cut already proposed for CDBG, the Farmers Home Public Facility Program should be transferred from Agriculture to HUD, with no funding, and combined with the state - administered small cities CDBG program. The current 70 percent - 30 percent split for entitlement and non -entitlement jurisdictions in the CDBG program would be changed to 60 percent - 40 percent. This increases the cut for entitlement cities by 14.3 percent. Cities funded through the small cities program would feel the impact of this proposed shift as well, since they would be competing with rural jurisdictions for funding. PUBLIC TRANSIT Based on materials obtained from the Office of Management and Budget, it appears that the Administration is planning to propose in February elimination, starting in FY86, of all public transportation assistance, except for the $1.1 billion generated annually by the one -cent gasoline tax set -aside. Under the OMB scenario, the $1.1 ' billion, currently a discretionary program, would replace the $2.7 / billion formula program. No operating assistance or new rail starts would be permitted. The cut, if proposed, would represent a 71 per cent reduction in federal transit assistance to cities. HEALTH A cut of almost eight percent below current services levels is expected for the Public Health Service, a reduction of $386 million from the FY85 level and $724 million less than the agency would spend to keep programs operating at current levels. The cuts, which extend across the Public Health Service, affect programs in the Health Resources and Services Administration, the Alcohol, Drug Abuse and Mental Health Administration, the Centers for Disease Control, the Food and Drug Administration, and the National Institutes of Health, formerly considered untouchable. Entitlement programs will be cut in the FY86 budget as well. The biggest cuts are expected in Medicare, scheduled to be reduced by $4.9 billion in FY86 and $21.6 billion by FY88. The bulk of savings will come from a one year freeze in hospital payments and extension of the freeze on physician fees.