Agenda Packets - 1986/03/10 - Laserfiche WebLink

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Federal outlook FY 1987 Budget The deepest cuts to cdy pngpam, history occurred in 1%5, and the trr continues in the president'sfi,cal )e 1987 budget prop.-4. Tho- budget pro poses major rnreases m tax ,ubsdos d in defense. foreign ad. anal on it federal debt. On the other hand calls for ebnnnutaon or sharp reuuctun Of almost every Cn) program in &at year 1987. In addnun. funding :drrad)' approved for some city programs for fiscal year 1986 would either be deferred or rescindedose The budget props elimination of the following programs: revenue shar- ing. mumcipai wastewater grants. urban development action grants, the EconoouC Development Admimstra. Igin. airport grants. cofmmmn' set vm block grants. energy consenal." programs, rental development and reh+hdnaivm gram, elderly and . m gregate housing, and section S housing. Steep reductions are proposed in com mumty development block grants (in 1986), hghwa)' funding. education, and public transportation grants t 1986 and 19871. In areas affecting cures, the budget proposes to • Cut Community development block grants 26 percent retroactive to Jam fury and hold them at the $2.6 billion level for 1986 and 1987. The prese dent will propose to change the diva son of funding between entidemenl cities and small cities from the cur- rent 70 laercenu30 percent to 65 percentr35 perrent. to offset the effect of the proposed elunimtion of the Farmers Home Admrustratsin rural housing and development programs. • Cut 201 wastewater treatment grants 25 percent per year and ebm. mate them by 1990 The expenditure of funds would bit hinted to ongoing prgeris • Emanate urban development action grants in 1987 and cut currrntyear funding 66 percent, so that the awards made in Januan would be the last ones under the program. an ar • RerIW Y• fundm)• Inr nuhlx' tran,lorla Ism to $1.22 bill" 62 percent below levels. The budget proposes a nil rescrsldd of WI million in fiscal year 1986 discretionary grants already approst•d Operating asst.: ante for all urbanized areas over 200,000 population would bit ebnu- wed Alin targeted for terrmldixm are Amtrak subsidies and the car Carrnr suhsdt pn-knm. whnh wa, designed to guarantee essential car service b> sdmg funinmmm5. • Reduce the 1987 funding for two major shelter programs, subsidized housing and low assume operaosns. by 67 percent from $10.7 billion to $3 5 billion Current —year funding would drop to $7 billion. (a 63 per cent rrdat txmi. to be accomplished by rescissions and deferrals of funds already appropriated for housing. The adminatnoin proposes to requite state and kraal gu.'rrmtents t'. pa) half of the administrative costs of the section 8 existing and housing voucher programs. • Reduce by 17 percent the funding for four )ob training programs —block grants, summer youth, dislocated workers. and the job corps as coma pued to 198ti Levrls. Curren -year funding would we a rescission of over $300 million. • Cancel the Octuber general revenue sharing payment and terminate the program on September :N). The final payment an July would be reduced about 16 percent. • Accelerate city payments of Suual Secunty taxes by putting cities on the same payment schedule as pn- vatc businesses and uwreasung the rate of interest charged on late deposits of SocW security payments. Cures would pay the Social Security system directly nlher than going !tough a state agem,c a, Ic the current practice. General federal aid • Cut highway funding by $2.6 billion. Sen David Durenberger has intrm about 15 percent. ducted a bill i5. 2037) which would by .Aran HoWe un.vide genoral purpow federal ad t- local governments The House has introduced a companion bill (H R. 4085), The new program. targeted rascal assistance, is a targeted version 4gc n, ral r; wine ,luN,j deanptrd i„ proedr a safety net for needy comn:u mties. II would provide hurling of $2.3 billion per year. about halt the current funding Level for revenue sharing. In eider to reduce hs,al dupantu-, betweeft high gnome and low tancome communities, funds would be targeted tc areas with low per capta Income and high poverty levels The funding for- mula would be based on nerd. tax effort, and fiscal npacin. Cbmrnumor, with menmey 25 percent above !her stateaverage would not be eliplaw I�r the pt ogram Tax reform The Senate Finance Comnuttee is drafting its own tax reform bill. reject utg huh the admrustraton proposal and the House -passed mrasute The Coninullm Wig consider a new con sumptctn m tax, such as some forof a national ,ale, tax or a value added tax. which the adrmmstntion opposes. It Congress adopts such a tax, it would interf,re with the ability of state and local governments to impose sales taxes and could eliminate state and kxa. sales !:sees. The Comrruttre wig dis- cuss the deCucibnb!)' of state and "cat taxes, although the House has indica!ed it wit refuse to approve the eumuution of state and kcal tax deducubihl. The flounce committee is not expected to present a ball to the Senate cuaW this all The includes The House version rludes a pro siun requiring all cities that tax prop erty. Der. l nrnrorr:•, ,,. v"me !_ provide an udornutsin report to each ndividual who paid such taxes and to he IRS Cndeo ;;w proposai. cities vould be :equred to provide the firs; dornutgm returns to idiv:dual tax ayers by the end of Januan, 1988 and the IRS by the end of February. 988. for taxes pad in 1*7 11 16 Minne•ou Cities