Earmark Ban Called Unfair to Small Towns

Posted March 4, 2011 at 4:49pm

For the Ferguson Group, the Congressional ban on earmarks has been a call to arms.

The firm — which has long prided itself on nabbing federal dollars for small and medium-sized municipal governments ­— is waging a campaign to convince lawmakers that if they won’t earmark funding for individual projects, they should instruct federal agencies to make sure small towns get their fair share.

“We’re not shy,” said William Ferguson, CEO of the Ferguson Group. “We’re looking out for our clients. I am trying to sell the idea that local communities can fairly compete for money and do the kinds of things they were doing under earmarks.”

To drive home its point, the Ferguson Group has produced a study showing that competitive federal grant programs favor a handful of big cities while shutting out smaller municipalities, which often lack experienced grant writers and don’t meet stringent federal standards.

As part of what it calls its “2012 Fix” program, Ferguson has been circulating the study on Capitol Hill, around K Street and to the group’s clients. The Ferguson Group is trying to drum up support in Congress for inserting instructions in spending bills on how federal grants should be distributed.

The effort underscores how lobbyists who specialize in appropriations are responding to the new austere budget era in which “earmark” has become a dirty word.

Critics of earmarks say they skew federal budget priorities, resulting in money going to projects not because they are worthwhile but for more political reasons such as the clout of a lawmaker or the desire of party leaders to help vulnerable Members.

But defenders of such projects say they also ensure a wider distribution of federal funds to places that would not ordinarily get grants from federal agencies.

The study done by Ferguson compared federal funding in 14 areas in fiscal years 2006 and 2008, when the budget included earmarks, to 2007, when Congress approved a continuing resolution without such projects.

It found that in the fiscal year when money was distributed solely through competitive grants, “federal agencies drastically cut the number of grants awarded and allocated funding to only a select few entities.”

“In general only the largest jurisdictions benefited when federal funding was administered by the various federal agencies in FY 2007,” the report stated.

For example, in a program that provides funding for buses and bus facilities, there were 441 earmarks in 2006 with an average grant of $842,858.

In 2007, when the money was distributed by the Department of Transportation through a competitive grant program, the agency awarded seven grants to recipients in five states. The average grant size was almost $62.6 million. The recipients of the bus money that year were New York, San Francisco, Miami, Seattle, San Diego and Minneapolis, which received two grants.

There was a similar outcome in the Community Oriented Policing Services law enforcement technology program administered by the Justice Department, according to the Ferguson study. In 2006 the program included 424 earmarks, averaging $505,000. The next year, when the Justice Department invited only selected agencies to compete for the COPS grants, 37 law enforcement agencies received funding. The average size of each grant was almost $4.3 million.

President Barack Obama has welcomed the end of earmarks and pledged to veto spending bills that include them. A spokeswoman for the Office of Management and Budget declined to comment on the federal competitive grant program and said her office was studying the Ferguson report.

The Department of Transportation responded with an e-mail noting that Obama “was not in office during the 2007 continuing resolution on which the Ferguson report is based, but local governments have been very successful in their applications for competitive, merit-based programs over the last two years.”

The agency cited a transportation grant program created under the 2009 economic stimulus program that in its second round of funding awarded 45 percent of its capital grants and 76 percent of its planning grants to local governments.

Transportation officials also said that Obama’s budget proposal for next year includes a number of programs for which local governments and smaller entities would be eligible, including a National Infrastructure Bank and a competitive grant program called Transportation Leadership Awards.

Congressional Republicans have been cool to Obama’s proposals for more infrastructure spending, citing lack of sources to pay for it and an unwillingness to raise the gas tax.

Other lobbyists who specialize in appropriations say they will be focusing more on seeking grants because of the ban on earmarks. Howard Marlowe, president of Marlowe & Co. and president of the American League of Lobbyists, said that lobbyists are becoming familiar with executive branch officials who oversee grants.

“Many of us are feeling our way through right now,” he said.

He also predicted there will be “semi-earmarks” in authorization bills, which could direct money to smaller cities. Some firms like Ferguson have hired grant writers to help clients navigate the confusing process of applying for federal money.

Ferguson’s firm has its work cut out for it. The chief executive cited the example of how he is trying to salvage funding for the city of East Palo Alto, Calif., which had tentatively received a $400,000 earmark for a youth parolee re-entry program in this year’s budget until the new Congress eliminated all such projects. Unlike Palo Alto, its better-known neighbor that is home to Stanford University, East Palo Alto has suffered from high crime rates and poverty. Ferguson said the area needs such assistance.

“We’d like to go back and help them get a grant for $400,000,” he said.