Highlights from the President's FY15 Department of Treasury Budget Request

FY14 enacted is used for Department of Treasury comparisons, unless otherwise noted.

The administration’s FY14 request for the Department of the Treasury’s domestic programs is $13.8 billion (9.2 percent increase). Under the proposed budget, Treasury would continue to fund programs focused on economic development, small business support, and job creation.

The Treasury Department recommends a legislative proposal that would provide $1.5 billion (18.6 percent decrease) for a second round of funding for the State Small Business Credit Initiative (SSBCI) to support state-sponsored, public-private partnerships that increase lending, investment, and technical assistance to small businesses and manufacturers. Of that funding, $1 billion would be awarded on a competitive basis to states that target underserved groups and $500 million would be allocated to states according to a need-based formula.

The Community Development Financial Institutions (CDFI) Fund provides infusions of capital to financial institutions that serve economically distressed urban and rural communities. The president’s budget proposes $224.9 million (0.49 percent decrease) in funding for the CDFI Fund, with a lower level of funding due to the proposed termination of the Bank Enterprise Award Program. Proposed funding would include:

• CDFI Core Program — $151.3 million (3.37 percent increase) to expand the availability of credit, investment capital, and financial services in distressed urban and rural communities;
• Healthy Food Financing Initiative — $35 million (59.1 percent increase) to develop healthy food outlets in areas classified as “food deserts,” low-income areas where a majority of residents do not have access to a supermarket; and,
• Native American CDFI Assistance Program — $15 million (no change) to assist distressed Native American communities with access to credit, capital, and financial services through the creation and expansion of Native American CDFIs.

The president’s budget proposes the permanent extension of the New Market Tax Credit program, which allows Community Development Entities (CDEs) in low-income communities to apply to the CDFI Fund for tax credit investment authority in annual competitive rounds. Tax credits are then awarded to private investors in return for equity investments in CDEs. The president’s proposal would allow up to $5 billion in qualifying investment each year starting in 2014. The  budget recommendation allocates $2 billion in new tax credits for the proposed Manufacturing Communities Tax Credit Program, which would support qualified investments in communities affected by mass layoffs or military base closures.

The proposed budget also would extend the CDFI Bond Guarantee Program by one year to provide long-term capital to CDFIs that support lending in underserved communities. The proposed budget does not appropriate new funds for the program, but does support the administration of $325 million in bonds guaranteed by the Treasury Department in FY14 to finance loans to CDFIs that provide financing for affordable multi-family rental housing, healthcare facilities, charter schools, and commercial real estate in low-income or underserved rural areas.