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

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.
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–
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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 +$2 billion for each of security,
nonsecurity discretionary spending in FY 2013 (+0.4%).
FFIS estimates about 18% of total state funding would be
subject to sequester in January 2013.
FY 2012 Appropriations:
At What Cost to States?
FY 2012 Funding for Major Discretionary Programs Compared to Previous Years
Federal Agency
FY 2010
FY 2011
Department of Education
-1.1%
0.2%
Department of Health & Human Services
-5.6%
-2.7%
Department of Housing & Urban Development
-5.4%
-2.9%
Department of Energy/EPA
-33.2%
-7.6%
Department of Justice
-40.9%
-24.7%
Department of Homeland Security
-35.4%
-15.3%
Department of Labor
-4.9%
-2.2%
Department of Transportation
-9.0%
-3.3%
TOTAL - Major Discretionary Grants
-7.2%
-2.7%
FY 2012 Appropriations: Major Themes

Continuing Resolutions, “megabus” replaced
“omnibus”
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Continued program eliminations (Even Start,
Education Technology State Grants, homeland
security)
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Adjustments in allocation methodology (LIHEAP)
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Across-the-board cuts (Labor/HHS/Ed – 0.189%,
Interior/Environment – 0.16%)
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Rescission of unobligated balances (SNAP
Employment and Training, Sec. 8 housing)
FY 2012 Appropriations: Major Themes


Additional reporting requirements for federal
agencies.
–
Centers for Disease Control and Prevention (CDC)
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Substance and Mental Health Services Administration
(SAMHSA)
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Prevention and Public Health Fund
Using Affordable Care Act funds to supplant
existing appropriations.
Discretionary Spending Caps
Discretionary Spending Limits Under Budget Control Act of 2011*
($ in billions)
Security**
Non-Security
Total
Dollar change from previous year
Percent change from previous year
FY 2010 FY 2011 President
$683 $689
$719
$402 $361
$397
$1,084 $1,050 $1,116
-$34
-3.2%
FY 2012
House Agreement FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021
NA
$684 $686
NS
NS
NS
NS
NS
NS
NS
NS
NA
$359 $361
NS
NS
NS
NS
NS
NS
NS
NS
$1,019
$1,043 $1,047 $1,066 $1,086 $1,107 $1,131 $1,156 $1,182 $1,208 $1,234
$66 -$31
6.3% -2.9%
-$7
-0.7%
$4
0.4%
$19
1.8%
$20
1.9%
$21
1.9%
$24
2.2%
$25
2.2%
$26
2.2%
$26
2.2%
*Figures exclude funding for overseas contingency operations
**Security spending consists of spending from within the departments of Defense, Homeland Security, VA, National Nuclear Security Administration, intelligence community management, and
budget function 150 (international affairs).
Sources: FY 2012 budget for FY 2010 and FY 2012 President; House Budget Committee website for House FY 2012; NGA for FY 2011
$26
2.2%
What We Can Say About a
Sequester?
Covered
18%
Exempt
82%
Total funding: $601 billion
What We Can Guess About a
Sequester?
Potential Impact of FY 2013 Sequester on Selected Discretionary Grant Programs
(dollars in billions)
Total Funding
Annual Change
Annual Percent Change
Cumulative Change
Cumulative Percent Change (compared to
FY 2010)
FY 2010
$132.2
FY 2011
$126.6
-$5.6
-4.2%
-$5.6
FY 2012
$123.9
-$2.7
-2.1%
-$8.3
Sequester Level
FY 2013
$113.0
-$10.9
-8.8%
-$19.2
-4.2%
-6.3%
-14.5%
And Then….

President’s FY 2013 budget would replace the BCA
sequester with other tax and spending policies to reduce
the long-term deficit.
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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:
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It deviates significantly from the BCA.
The Senate intends to adhere to BCA spending levels.
Hence, no concurrent budget resolution for FY 2013.
President’s FY 2013 Budget:
Major Themes
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Many repeat proposals from previous budgets
and American Jobs Act of 2011.
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Major restructuring of programs, program
consolidations.
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38 K-12 programs consolidated into 11 new programs
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55 highway programs consolidated into 5 new core
programs
A few new programs (SAMHSA, higher ed.,
Infrastructure Bank, American Jobs Act).
President’s FY 2013 Budget:
Major Themes

Restructures funding with emphasis on
competitive grants (public health, child care, ed.).
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Increased focus on program integrity,
performance, incentive payments (TANF, LIHEAP,
CSBG, SSBG, Head Start, Foster Care, UI).
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Reliance on program set-asides/transfers to fund
new initiatives (Title I Rewards, teacher quality,
workforce innovation fund, UI).
House Budget Resolution, FY 2013
Total
$1,400
National Defense
Global War on Terrorism
$1,200
Nondefense
$1,000
$800
$600
$400
$200
$0
2012
2014
2016
2018
2020
2022
Federal Funds Information for States
House Budget Resolution, FY 2013
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Suspends sequester provisions for FY 2013.
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This results in more defense spending and less
nondefense spending in FY 2013.
Calls for reconciliation.
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–
–
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Affects agriculture, energy and commerce, financial
services, judiciary, oversight and government reform,
ways and means.
Generates $18 billion in savings in FYs 2012-13, $261
billion over 10 years.
Combined with lower discretionary caps, this would
generate more deficit reduction than BCA.
If unsuccessful, sequester would occur in FY 2013.
House FY 2013 Discretionary
Budget Authority
Discretionary Budget Authority Under the FY 2013 House Budget Resolution, Selected Budget Functions
($ in millions)
Discretionary Budget Authority
National Defense
Energy
Natural Resources & Environment
Agriculture
Transportation
Community & Regional Development
Education, Training, Employment, and Social Services
Health
Income Security
Administration of Justice
Global War on Terrorism
FY 2012
$554,240
4,731
34,706
5,851
33,767
18,483
92,241
56,089
61,253
51,188
126,544
FY 2013
$554,240
2,007
30,559
5,872
30,197
10,927
91,498
56,621
59,901
51,836
96,725
Change
Dollars
Percent
$0
0.0%
-2,724
-57.6%
-4,147
-11.9%
21
0.4%
-3,570
-10.6%
-7,556
-40.9%
-743
-0.8%
532
0.9%
-1,352
-2.2%
648
1.3%
-29,819
-23.6%
House FY 2013 – Mandatory Proposals
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Medicaid becomes a block grant. (-$810 billion/10 years).
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Premium support in lieu of current Medicare.
SNAP becomes a block grant.
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Indexed to CPI-U and population
Eliminate federal program requirements, enrollment criteria
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.
Which Leaves us Where?
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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.
While Nero Fiddles…
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Major programs needing long-term reauthorizations:
– TANF
– ESEA
– WIA
– SAFETEA-LU
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Absent reauthorizations, more short-term
extensions, more inability for states to plan ahead.
Contemplating a Lame Duck
Session
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Looming sequestration
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Need to raise the debt limit
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Expiration of Bush-era tax cuts
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Expiration of payroll tax cut, other tax provisions
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FY 2013 budget
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Uncompleted reauthorizations (TANF, highways)
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The kitchen sink?
Are There Any Common Themes,
Any Areas of Agreement?
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Yes. Everyone references GAO report on
duplication and overlap. What does this
mean?
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Consolidate grant programs
Homeland Security as example
Reauthorizations for ESEA, WIA, and
transportation all consolidate programs
Less funding, more flexibility. At least in theory.
Comprehensive Approach
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General agreement on need to reduce
federal budget deficit.
Comprehensive deficit reduction.
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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)
The End: Questions?
Contact information:
Trinity Tomsic: [email protected]
Melissa Loeb: [email protected]
Steven Pennington: [email protected]
www.ffis.org