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Federal Funding Outlook

Federal Funding Outlook. NGMA Annual Grants Training Conference April 24, 2012. Federal Funds Information for States. It All Began…. FY 2012 appropriations completed in late December 2011. Major discretionary programs: -2.7% versus FY 2011, -7.2% versus FY 2010.

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Federal Funding Outlook

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  1. Federal Funding Outlook NGMA Annual Grants Training Conference April 24, 2012 Federal Funds Information for States

  2. It All Began…. • FY 2012 appropriations completed in late December 2011. • Major discretionary programs: -2.7% versus FY 2011, -7.2% versus FY 2010. • Major mandatory programs : +5.5% versus FY 2011, +8.5% versus FY 2010. • BCA baseline would allow +$2 billion for each of security, nonsecurity discretionary spending in FY 2013 (+0.4%). • FFIS estimates about 18% of total state funding would be subject to sequester in January 2013.

  3. FY 2012 Appropriations: At What Cost to States?

  4. FY 2012 Appropriations: Major Themes • Continuing Resolutions, “megabus” replaced “omnibus” • Continued program eliminations (Even Start, Education Technology State Grants, homeland security) • Adjustments in allocation methodology (LIHEAP) • Across-the-board cuts (Labor/HHS/Ed – 0.189%, Interior/Environment – 0.16%) • Rescission of unobligated balances (SNAP Employment and Training, Sec. 8 housing)

  5. FY 2012 Appropriations: Major Themes • Additional reporting requirements for federal agencies. • Centers for Disease Control and Prevention (CDC) • Substance and Mental Health Services Administration (SAMHSA) • Prevention and Public Health Fund • Using Affordable Care Act funds to supplant existing appropriations.

  6. Discretionary Spending Caps

  7. What We Can Say About a Sequester?

  8. What We Can Guess About a Sequester?

  9. And Then…. • President’s FY 2013 budget would replace the BCA sequester with other tax and spending policies to reduce the long-term deficit. • FY 2013 discretionary spending would increase about 2.7%; mandatory would increase 7%. • House budget resolution would change everything, but its adoption mainly signals that the process is broken: • It deviates significantly from the BCA. • The Senate intends to adhere to BCA spending levels. • Hence, no concurrent budget resolution for FY 2013.

  10. President’s FY 2013 Budget: Major Themes • Many repeat proposals from previous budgets and American Jobs Act of 2011. • Major restructuring of programs, program consolidations. • 38 K-12 programs consolidated into 11 new programs • 55 highway programs consolidated into 5 new core programs • A few new programs (SAMHSA, higher ed., Infrastructure Bank, American Jobs Act).

  11. President’s FY 2013 Budget: Major Themes • Restructures funding with emphasis on competitive grants (public health, child care, ed.). • Increased focus on program integrity, performance, incentive payments (TANF, LIHEAP, CSBG, SSBG, Head Start, Foster Care, UI). • Reliance on program set-asides/transfers to fund new initiatives (Title I Rewards, teacher quality, workforce innovation fund, UI).

  12. House Budget Resolution, FY 2013

  13. House Budget Resolution, FY 2013 • Suspends sequester provisions for FY 2013. • This results in more defense spending and less nondefense spending in FY 2013. • Calls for reconciliation. • Affects agriculture, energy and commerce, financial services, judiciary, oversight and government reform, ways and means. • Generates $18 billion in savings in FYs 2012-13, $261 billion over 10 years. • Combined with lower discretionary caps, this would generate more deficit reduction than BCA. • If unsuccessful, sequester would occur in FY 2013.

  14. House FY 2013 Discretionary Budget Authority

  15. House FY 2013 – Mandatory Proposals • Medicaid becomes a block grant. (-$810 billion/10 years). • Indexed to CPI-U and population • Eliminate federal program requirements, enrollment criteria • Premium support in lieu of current Medicare. • SNAP becomes a block grant. • Based on low-income population indexed for inflation • Requires time limits and work requirements • Consolidate workforce/job training programs. • Reorganize/consolidate K-12 programs. • Deficit-neutral tax reform. • Repeal ACA.

  16. Which Leaves us Where? • No concurrent budget resolution. • No full-year appropriations bills completed prior to November elections. • Likely lame-duck session to get things in order between elections and January sequester. • In short, another year of muddling through.

  17. While Nero Fiddles… • Major programs needing long-term reauthorizations: • TANF • ESEA • WIA • SAFETEA-LU • Absent reauthorizations, more short-term extensions, more inability for states to plan ahead.

  18. Contemplating a Lame Duck Session • Looming sequestration • Need to raise the debt limit • Expiration of Bush-era tax cuts • Expiration of payroll tax cut, other tax provisions • FY 2013 budget • Uncompleted reauthorizations (TANF, highways) • The kitchen sink?

  19. Are There Any Common Themes, Any Areas of Agreement? • Yes. Everyone references GAO report on duplication and overlap. What does this mean? • Consolidate grant programs • Homeland Security as example • Reauthorizations for ESEA, WIA, and transportation all consolidate programs • Less funding, more flexibility. At least in theory.

  20. Comprehensive Approach • General agreement on need to reduce federal budget deficit. • Comprehensive deficit reduction. • Could serve as alternative to sequestration • Could address numerous issues including the federal debt limit, federal spending levels, and taxation • Or not (may prove too difficult)

  21. The End: Questions? Contact information: Trinity Tomsic: ttomsic@ffis.org Melissa Loeb: mloeb@ffis.org Steven Pennington: spennington@ffis.org www.ffis.org

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