FY2019 Appropriations Process Under Way on Capitol Hill
June 5, 2018
With the FY2018 omnibus spending package finished only weeks ago, Congress is well underway with the FY2019 appropriations process. Hoping to avoid a showdown over federal spending as election season approaches, House and Senate Republican leaders are ramping up spending, farm, and infrastructure bills. House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) announced floor action on the first of FY19 appropriations bills as part of a three-bill “minibus,” strategy. The first “minibus,” comprised of the Military Construction-Veterans, Energy-Water and Legislative Branch bills, is set to go to the House floor when lawmakers return next week.
With the House moving quickly to address FY2019 appropriations, it is important for AEO members, like you, to engage in this process by communicating with your policymakers to support AEO’s FY2019 funding requests. At AEO, we know that federal investment in microbusiness development matters. In fact, 88 percent of small businesses that receive business development services are still in business after five years. This compares to an overall five-year business success rate of less than 50 percent. Businesses that receive training also tend to have average annual revenues that are 38 percent higher than those that do not. Most importantly, business ownership provides an opportunity for increased income and wealth generation in underserved communities.
Despite these statistics showing the value of business assistance to our economy, national and local organizations have fewer resources to expand on this development. Though there have been slight increases in funding or maintained funding levels in FY2018 House and Senate Appropriations Committee, cyclical changes in priorities across the small business spectrum paired with the merging of government programs mean funding for rural development and underserved communities is still at an all-time low.
For FY2019, AEO is pushing for the following funding levels:
Key committees have begun moving forward with appropriations bills that address the above AEO priorities. On May 24th, the House Appropriations Financial Services and General Government (FSGG) Subcommittee approved its draft FY2019 appropriations bill, which included a funding request of $191 million for the CDFI Fund. This is not only over one-third less than AEO’s request of $300 million, but it is also $59 million less than what was appropriated in FY2018 ($250 million). According to the CDFI Coalition, the impact of the 23% reduction in funding would have ripple effects resulting in “a reduction of nearly $700 million in financing for small businesses, needed community facilities and affordable housing in economically distressed and low wealth rural, urban and Native communities across America.”
The House FSGG bill continues the CDFI Bond Guarantee Program (BGP) with $500 million in guarantee authority, maintaining the FY2018 level, but at less than AEO’s request of $1 billion. The bill will head to the full committee for further consideration and markup.
SMALL BUSINESS ADMINSTRATION LENDING PROGRAMS
The outlook for SBA lending programs is bit better – they would receive full funding to support $30 billion in 7(a) and $7.5 billion in 504 small business loans. Also included is $12.3 million for veterans programs, $130 million for Small Business Development Centers, and $18 million for Women’s Business Centers which is the same as FY2018 funding levels. AEO is requesting an increase in funding for Women Business Centers to $21.75 million.
AEO may get a “win” with funding for SBA Microloan Technical Assistance, with our request of $31 million currently included in the FY2019 appropriations bill. Additionally, SBA Microloan program is slated for $42 million in funding, slightly lower than our request of $44 million.
RURAL DEVELOPMENT PROGRAMS
The House Appropriations Agriculture Subcommittee passed their bill for FY2019 appropriations which included level funding levels from FY2018 for Rural Business Development Grants at $34 million. The Intermediary Relending Program would receive a boost in funding for FY2019 to $20 million, an increase of $2 million, more than requested by AEO.
Unfortunately, as with FY2018 appropriations, the Rural Microentrepreneur Assistance Program as been zeroed out in FY2019.
To ensure programs supporting microbusinesses get the funding they need, we ask you to reach out to your Representatives and Senators to encourage them to support AEO’s FY2019 funding requests. This funding is vital to assisting entrepreneurs in underserved and rural communities with the successful startup and growth of their businesses.