Budget Impacts on the Northeast
States continue to evaluate the potential impact of President Trump’s FY2018 budget proposal on the millions of federal dollars flowing into the region and the implications for the region. The proposed cuts to federal programs at the Department of Energy, NIH, EPA and Department of Transportation could have major impacts. The elimination of the Low Income Heating Energy Assistance Program (LIHEAP) will have devastating effects on households in the Northeast who rely on the program to help pay unaffordable home energy bills. Last year the program provided more than $700 million to the Northeast.
In transportation, funding for FTA’s New Starts would be limited to projects with full funding grant agreements already in place. Of note, this could impact the NY/NJ Gateway rail tunnel which is considered a vital component for easing congestion along the Northeast Corridor. The budget’s proposed 31 percent cut to EPA funding would impact states environmental budgets greatly. Other regional programs targeted for elimination include the Northern Border Regional Commission which invests in the economy and infrastructure of distressed communities in northern regions of Maine, Vermont, New Hampshire and New York.
The budget proposes major funding increases that would benefit some of the region’s programs, services and business. For example, some of the region’s large veterans population would benefit from a six percent boost in Department of Veterans Affairs funding while large increases to DOD and DHS spending would benefit the region’s defense industry, including shipyards in Maine and Connecticut.
Many of the cuts have hit bipartisan pushback on the Hill. Members of the Northeast Congressional delegation including Appropriations Committee top-ranking members Senators Collins and Leahy have also expressed concern with the steep cuts. Massachusetts Senator Ed Markey has released a
report that details how the budget would impact the Commonwealth, especially its healthcare economy and research programs. The budget’s 18 percent reduction in NIH, would translate to a $463 million cut for Massachusetts alone and could significantly cut funding for critical medical research at the region’s top universities.
The White House will submit a more detailed FY2018 budget request in May. In the meantime, Congressional leaders are discussing when to move a FY2018 budget resolution to tie it to a tax reform package. At the same time, Congress is also negotiating the final FY2017 appropriations bills that must be enacted before the current continuing resolution (CR) expires on April 28 or else an additional CR will be required. The President is expected to propose reductions to FY2017 funding including eliminating the remaining $372 million FY2017 LIHEAP funds to help offset defense spending increases. However, these cuts could be a tough sell on Capitol Hill.
