Looking at the effect that President Donald Trump’s proposed budget would potentially have on New Orleans, where federal programs set for the chopping block support housing, social services, transportation and other needs, Deputy Mayor Ryan Berni had just one word for the plan: “Insanity.”
The budget proposal released Thursday is the first step in a process that will be refined over the coming months, with a more detailed spending plan expected in May and many changes likely in Congress. But the outline so far would eliminate many programs the city and others around the country rely on.
New Orleans officials estimate that proposed cuts to direct funding, grants and infrastructure programs could push the toll on the city to more than 20 percent of its annual budget.
And officials warned that other changes, such as the elimination of funding for creation of flood maps and a federal hiring freeze, could have major repercussions for residents even if they don’t directly impact the city’s finances.
“Obviously, beyond just the process and mechanisms of how dollars flow to local government, the budget has a real impact on real people and our ability to grow the economy and create jobs for middle-class and working families,” Berni said.
Foremost among the list of concerns is the proposed elimination of the Community Development Block Grant and HOME programs, two programs administered by the Department of Housing and Urban Development that provide direct funding to local governments. Local officials can then use the money for a variety of purposes, including affordable housing and social services.
New Orleans gets about $11.3 million a year in CDBG funding and about $2 million in HOME money.
Perhaps more than most cities, New Orleans has used those programs extensively over the past decade as it has recovered from the flooding after Hurricane Katrina.
The Trump administration argues that the CDBG program “has not been effective in rebuilding cities, but we can show how that money has been very effective in rebuilding the city after Hurricane Katrina because it’s a direct mechanism of the federal government funding local governments,” Berni said.
The money goes toward a variety of programs, including housing projects such as the Muses and Blue Plate Loft apartments, providing permanent supportive housing for the homeless and funding the Council on Aging, Head Start and summer jobs programs.
“These investments, the-cost benefits on these things, are extremely high, and in an era without (budget) earmarks or any way for a project to get direct funding from the federal government, (losing the money) really would be devastating for cities like New Orleans,” said Zach Butterworth, Mayor Mitch Landrieu’s director of federal relations.
The city also periodically gets between $5 million and $6 million in grants from the Department of Homeland Security that goes toward purposes such as upgrading radios for first responders. That money would be eliminated under the proposed budget, as would money from the Department of Labor that helps pay for workforce development initiatives.
The Department of Transportation’s TIGER grants, a competitive program that the city and the Regional Transit Authority have used to pay for projects such as the Loyola streetcar line and the planned new terminal for the Canal Street ferry, also are set to be ended.
The budget got immediate pushback from congressional Democrats, including U.S. Rep. Cedric Richmond, who represents New Orleans and chairs the Congressional Black Caucus.
“A budget is much more than numbers on a page. It is a moral document that reveals your priorities,” Richmond said in a news release. “With this budget, the president has made it clear that our state’s well-being is not high on his list. I consider this budget an insult to our state, and anyone who supports Louisiana cannot in good faith support it.”
The budget could also mean substantial problems in south Louisiana that aren’t directly tied to the city’s budget. For example, it would eliminate the $100 million to $150 million the federal government spends each year to pay for flood mapping to generate the maps used in the National Flood Insurance Program.
That cut would shift the burden of paying for those maps to those who have flood insurance, meaning a dramatic increase in premiums, Butterworth said.
Other elements of the spending plan also are causing concern, including a hiring freeze that Butterworth said would further slow down processing of permits for major coastal restoration projects.
The city and others around the country are preparing to fight back on the proposal. And with Landrieu poised to become president of the U.S. Conference of Mayors in June, New Orleans could end up center-stage in those fights.
“We’re going to be battling on all fronts,” Berni said.