Special Analysis
2012
Updated State-by-State Analysis of BCA Sequester
Special Analysis 12-01February 7, 2012
Summary
The Budget
Control Act of 2011 (BCA, P.L. 112-25) included automatic across-the-board
(ATB) spending reductions if Congress and the president failed to enact a Joint
Select Committee (JSC) bill by January 15, 2012, that reduced the federal
budget deficit by at least $1.2 trillion over 10 years. Since a bill was not
enacted, this process, known as sequestration, is scheduled to take effect on
January 2, 2013, for fiscal year (FY) 2013 spending.
This Special Analysis estimates state-by-state funding levels in FY 2013 for the programs tracked by FFIS and subject to sequester. It updates FFIS Special Analysis 11-06, which was prepared prior to the completion of the FY 2012 appropriations process. This analysis provides hypothetical illustrations designed to give states a sense of the magnitude of potential spending reductions. At this point, it is not possible to determine the precise implications of a sequester on grant-in-aid funding. However, FFIS will periodically update this analysis as additional information becomes available.
2011
State-by-State Analysis of BCA Sequester
Special Analysis 11-06December 2, 2011
Summary
The Budget Control Act of 2011 (BCA, P.L. 112-25) includes automatic across-the-board (ATB) spending reductions unless Congress and the president enact a Joint Select Committee (JSC) bill by January 15, 2012, that reduces the deficit by at least $1.2 trillion over 10 years. This process, known as sequestration, would take effect on January 2, 2013, for fiscal year (FY) 2013 spending. With the recent failure of the JSC to produce a deficit-reduction proposal, there is little chance of a package becoming law by January 15, 2012. Moreover, because the JSC failed to meet its November 23, 2011, deadline, any legislation would need to be considered under regular House and Senate rules, not the fast-track procedures outlined in the BCA. Absent the reversal of BCA provisions by Congress and the president, sequestration seems likely.
This Special Analysis estimates state-by-state funding levels in FY 2013 under a full sequester for the 210 programs tracked by FFIS. These are hypothetical illustrations designed to give states a sense of the magnitude of potential spending reductions. It is not possible to determine the precise implications of a sequester on grant-in-aid funding.
Revised Hypothetical Impact of BCA Sequester on Major Discretionary Grants
Special Analysis 11-05November 22, 2011
Summary
On August 2, 2011, the president signed the Budget Control Act of 2011 (BCA, P.L. 112-25), which provides for an increase in the federal debt limit and includes several provisions aimed at reducing long-term budget deficits (see Budget Brief 11-13 for more details). One of these provisions created a Joint Select Committee on Deficit Reduction (JSC) to develop recommendations for reducing the federal budget deficit by at least $1.2 trillion over 10 years. The legislation resulting from these recommendations would be considered by Congress under special, expedited procedures, designed to prevent amendment and limit debate. If the efforts of the JSC fail to achieve at least $1.2 trillion in deficit reduction and are not enacted by January 15, 2012, then an automatic process to reduce spending is triggered. This process, known as sequestration, would take effect on January 2, 2013, for fiscal year (FY) 2013 spending, and result in across-the-board (ATB) cuts to nonexempt discretionary and mandatory spending.
With the apparent failure of the JSC to produce a deficit-reduction proposal, the prospect of sequestration has moved closer to reality. This Special Analysis calculates the hypothetical impact of sequestration on funding for major discretionary grant programs of importance to states in FY 2013.
Hypothetical Impact of BCA Sequester on Major Discretionary Grants
Special Analysis 11-04September 1, 2011
Summary
On
August 2, 2011, the president signed the Budget Control Act of 2011 (BCA, P.L.
112-25), which provides for an increase in the federal debt limit and includes
several provisions aimed at reducing long-term budget deficits (see Budget Brief 11-13 for more details). One of these provisions
creates a Joint Select Committee on Deficit Reduction (JSC) to develop
recommendations for reducing the federal budget deficit by at least $1.2
trillion over 10 years. The legislation resulting from these recommendations would
be considered by Congress under special, expedited procedures, designed to
prevent amendment and limit debate. If the efforts by the JSC fail to achieve
at least $1.2 trillion in deficit reduction and are not enacted by January 15,
2012, then an automatic process to reduce spending is triggered. This process,
known as sequestration, would take effect on January 2, 2013, for fiscal year
(FY) 2013 spending, and result in across-the-board cuts to nonexempt
discretionary and mandatory spending. This Special
Analysis calculates the hypothetical impact of sequestration on funding for
major discretionary grant programs of importance to states in FY 2013.
An Overview of Federal Block Grants and Implications for States
Special Analysis 11-03May 12, 2011
Summary
The dramatic increase in the federal budget deficit in recent years has led federal lawmakers to look at options for reducing the deficit and debt to more sustainable levels. As part of this budget debate, federal block grants have reemerged as a way for the federal government to rein in spending. At the same time, many states have renewed their calls for additional flexibility in an effort to achieve better program results and gain more control over their budgets by reducing the state costs associated with federal programs.
The current fiscal environment is similar to 1996 when Congress converted a major open-ended entitlement program, Aid to Families with Dependent Children (AFDC), into the Temporary Assistance for Needy Families (TANF) block grant. As was the case in 1996, lawmakers are now considering converting major open-ended entitlement programs into block grants. Recent block grant proposals have emerged for Medicaid and the Supplemental Nutrition Assistance Program (SNAP).
This Special Analysis looks at the history of block grants, the funding associated with current block grants, and some of the major issues surrounding this type of federal aid to states.
Inventory of State Matching and MOE Requirements
Special Analysis 11-02February 11, 2011
Summary
Although the federal government provides state and local governments with almost $500 billion in federal funds each year, most of these funds come with strings attached. Some grants require states to implement certain program changes—such as the testing provisions in No Child Left Behind—and many require states to contribute to the cost of the program through matching or maintenance-of-effort (MOE) requirements
This Special Analysis provides an inventory of all formula grants and major project grants, and indicates whether those programs have state matching or MOE requirements. It focuses on programs for which state and local governments are the recipient of funds.
Deficit Commissions Recommend Changes that Carry Risks, Opportunities for States
Special Analysis 11-01February 2, 2011
Summary
Federal fiscal years (FYs) 2009 and 2010 were characterized by expanded federal aid to states that was part of the economic stimulus bill, which in turn led to a marked increase in the federal budget deficit. The next several years are likely to see a reversal of this pattern, with yawning federal budget deficits leading to calls for reduced federal spending targeted toward states.
To address the problems of deficits and debt, several reports have been issued of late that contain options for reducing the federal deficit and long-term debt to more sustainable levels. Two reports are most prominent. One, The Moment of Truth, was issued by The National Commission of Fiscal Responsibility and Reform (known as the Bowles-Simpson commission, after its co-chairs). The other, Restoring America’s Future, was issued by The Debt Reduction Task Force of the Bipartisan Policy Center (known as Domenici-Rivlin, after its co-chairs).
Both reports call for dramatic changes in federal spending and taxation, many of which have important implications for states. Neither is likely to be adopted in anything resembling its entirety, as many of their components are probably too controversial to win a majority vote in Congress. But both are likely to inform budget debates in the coming weeks, months, and years. Table 1 summarizes major provisions of the two reports.
2010
State Policy Reports: Federal Spending in the States
Special Analysis 10-05October 28, 2010
Summary
The U.S. Bureau of the Census released its report for fiscal year (FY) 2009 that tracks the flow of federal funds to the states. States can use the report to assess how they fare in their fiscal relationship with the federal government.
Inventory of Competitive Grants
Special Analysis 10-04August 17, 2010
Summary
FFIS alerts states to competitive grant opportunities through its Competitive Grant Updates. These weekly updates include recent announcements about the availability of funds.
This Special Analysis provides an inventory of all the competitive grants managed by the U.S. departments of Education, Health and Human Services (HHS), Housing and Urban Development (HUD), Justice, and the Environmental Protection Agency (EPA), for which state and local governments as well as territories are eligible to apply. The information comes from the December 2009 print edition of the Catalog of Federal Domestic Assistance (CFDA). It provides the grant name, the CFDA number, and the most recent funding level, which is federal fiscal year 2010 for most grants. The grants are listed from highest to lowest funding levels within each department. The funding levels represent estimated obligations for a given program. A few of these programs include multiple types of assistance, such as a formula and competitive portion.
A Strategic Look at Unspent ARRA Funds
Special Analysis 10-03July 30, 2010
Summary
In an effort to address increasing concerns about the federal budget deficit, Congress has sought to identify offsets for any legislation with a significant cost. A common theme that has emerged is the rescission of unspent funds included in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5). Certain program areas, such as education and broadband technology, have been mentioned specifically.
At this point, it is unclear how Congress is defining unspent funds: unobligated at the federal level, obligated at the federal level, but not yet spent, or both. Regardless of the definition, these funds may already be committed at the federal and/or state level. For example, federal agencies may have awarded unobligated funds or are in the process of awarding the funds. Funds that are obligated at the federal level but not yet liquidated may already be obligated by states, meaning that states have entered into contracts and have projects underway to spend the funds.
In addition, it is not surprising that some ARRA funds remain unspent, given that most formula grant programs allow states until the end of fiscal year (FY) 2010 or FY 2011 to obligate the funds. States then have additional time to liquidate the funds, with ARRA providing the longest timeframe for capital programs. (See Table 1 for specific obligations and liquidation deadlines, where available.)
This Special Analysis uses recent ARRA financial data released by federal agencies to identify the amount of unspent ARRA funds as well as programs or areas that may be at risk. It also summarizes the legislative proposals to rescind ARRA funds.
Health Care Reform: Inventory of Funding Opportunities
Special Analysis 10-02May 24, 2010
Summary
The health care reform law includes a number of funding opportunities of interest to states. This analysis provides a listing of those programs along with key funding information. For some programs, the law includes both authorization and appropriations, thereby guaranteeing funding at the specified levels for the years cited in the law. The majority of programs, however, only receive an authorization in the law and will require funding through the appropriations process. As such, it is unclear if or when (and at what levels) these programs will be funded.
2010 Census: Impact on Federal Grant Allocations
Special Analysis 10-01May 13, 2010
Summary
In a recent analysis, the Brookings Institution examined the impact of the decennial census on the flow of federal funds. The report’s findings underscore the notion that the single most important step a state can take to maximize federal funding is to ensure that all of its residents get counted in the decennial census. While population counts play a critical role in the distribution of federal funding, other formula factors, such as hold-harmless and minimum-allocation provisions, can mitigate the effect of population changes on state funding levels.
This analysis summarizes both the Brookings report and a recent census-related analysis issued by the Government Accountability Office (GAO). To assess the impact of the census on grant allocations, it provides a detailed description of the funding formulas for population-dependent programs tracked by FFIS and the state funding levels associated with these programs