2013 Federal Budget Sequestration and Potential Local Impact. November 27, 2012

Size: px

Start display at page:

Download "2013 Federal Budget Sequestration and Potential Local Impact. November 27, 2012"

Howard Perkins
5 years ago
Views:

1 2013 Federal Budget Sequestration and Potential Local Impact November 27, 2012

2 WHAT IS SEQUESTRATION? (BCA) 2013 Federal Budget Sequestration and Potential Local Impact November 27,

3 HOW DID WE GET HERE? Reached Old Federal Debt Ceiling Budget Control Act of 2011 (S. 365) Enacted Failure of Super Committee to Find Savings Sequester Required by Law 2013 Federal Budget Sequestration and Potential Local Impact November 27,

4 HOW DID WE GET HERE? 2013 Federal Budget Sequestration and Potential Local Impact November 27,

5 UNDERSTANIDNG THE BREAKDOWN OF FUNDING LEVELS UNDER SEQUESTRATION 2013 Federal Budget Sequestration and Potential Local Impact November 27,

6 TRANSLATING FY2013 SEQUESTRATION CUTS 2013 Federal Budget Sequestration and Potential Local Impact November 27,

7 What is exempt from sequestration? Here is a snapshot of 149 exempt programs: * SNAP receives $8 million annual cut For a complete list of exempt programs, download the OMB Report Federal Budget Sequestration and Potential Local Impact November 27,

8 FY2013 PROJECTED CUTS: 8.2% Domestic discretionary reduction = $38 billion total Examples of FY2013 Cuts by Program HUD Community Development Block Grant (CDBG) = $242 Million Prince William County = $1.887 Million (8.2% = $154,734) HUD Section 8 Housing = $1.5 Billion Prince William County = $27.2 Million (8.2% = $2,230,400) HUD HOME Investment Program = $81 Million Prince William County = $573,000 (8.2% = $46,986) HUD Homeless Assistance = $156 Million Prince William County = $152,000 (8.2% = $12,464) U.S. Economic Development Administration (EDA) = $34 Million USDA Rural Development = $203 Million EPA State and Local Grants = $293 Million EPA Hazardous Substance / Superfund = $119 Million DOE Energy Efficiency & Renewable Energy = $54 Million FEMA State & Local Disaster Preparedness & Recovery Programs = $183 Million FEMA Disaster Relief = $580 Million 2013 Federal Budget Sequestration and Potential Local Impact November 27,

9 FY2013 PROJECTED CUTS: 8.2% Domestic discretionary reduction = $38 billion total Examples of FY2013 Cuts by Program DOJ State Criminal Alien Assistance Program (SCAAP) = $17 Million DOT Essential Air Service* = $12 Million (Discretionary funds only) FTA Transit Capital Grants = $163 Million HHS Substance Abuse & Mental Health = $275 Million Prince William County = $1.185 Million (8.2% = $97,170) HHS Child Care Discretionary = $187 Million Prince William County = $480,000 (8.2% = $39,360) HHS Older American / Aging Services = $121 Million DOJ State & Local Law Enforcement = $92 Million DOJ Juvenile Justice = $21 Million DOL WIA Title I Formula Grants to States = $262 Million 2013 Federal Budget Sequestration and Potential Local Impact November 27,

10 FY2013 PROJECTED CUTS: Medicare Total $ 11 Billion (2.0%) Limited to 2% cut from provider payments under parts A & B Medicare Advantage (Part C) Drug Plan Contracts (Part D) American Community Survey tells us that in 2011, 29,764 Prince William residents (7.1% of total population) were aged 65 and above and covered by Medicare 2013 Federal Budget Sequestration and Potential Local Impact November 27,

11 FY2013 PROJECTED CUTS: Mandatory/Direct Allocation = $5 billion total Programs Cut by 7.6% Payment-in-Lieu-of-Taxes (PILT) = $30 Million HHS Social Service Block Grant (SSBG) = $136 Million Prince William County = $972,000 (7.6% = $73,872) DOT Essential Air Services* = $4 Million (Mandatory funds only) HHS Prevention & Public Health Fund = $76 Million NTIA State & Local Implementation Program = $5 Million Programs Cut Less Than 7.6% FHWA Federal-Aid Highways = $56 Million HHS TANF = $2 Million SNAP = $8 Million Child Nutrition = $4 Million 2013 Federal Budget Sequestration and Potential Local Impact November 27,

12 Fiscal Cliff Timeline 2013 Federal Budget Sequestration and Potential Local Impact November 27,

13 GDP And Employment Impact of the Fiscal Cliff Change in the CBO s forecast for GDP and employment in the fourth quarter of 2013 of waiving various spending cuts and tax increases due at the end of 2012, avoiding the fiscal cliff. Total GDP could decrease by 2.75% Change in GDP forecast, adjusted for inflation 3.0% 2.5% Extend payroll-tax reduction for employees and emergency unemployment benefits Change in full-time employment* forecast, in millions Total employment could decrease by 3.4 million jobs 2.0% 1.5% Extend most expiring tax provisions and index alternative minimum tax for inflation % 0.5% Eliminate across-theboard cuts in domestic spending and reductions in Medicare doctor payment rates *Or the equivalent Source: Congressional Budget Office As reported in the Wall Street Journal 0.0% Eliminate across-theboard cuts in defense Federal Budget Sequestration and Potential Local Impact November 27,

14 AIA Report 2013 Federal Budget Sequestration and Potential Local Impact November 27,

15 Federal Funding to Prince William County (FY2011 Audited Financials) Dept. Of Education: $ 54,857,000 Dept. of Housing and Urban Development: 31,813,000 Dept. of Agriculture: 20,941,000 Dept. of Health and Human Services: 15,587,000 Dept. of Transportation: 7,885,000 Dept. Of Energy: 1,540,000 Dept. of Justice: 916,000 Dept. of Homeland Security: 874,000 Office of National Drug Control Policy: 858,000 Dept. of Defense: 716,000 Dept. of the Interior: 578,000 Dept. of Labor: 88,000 Corp. for National and Community Service: 25,000 Dept. of Veterans Affairs: 1,000 TOTAL EXPENDITURES OF FEDERAL AWARDS: $136,679, Federal Budget Sequestration and Potential Local Impact November 27,

16 Federal Funding to Prince William County Schools (FY2013) SOURCE IDEA Title VI-B (Special Education): $12,740,000 Title I (Intervention/Remediation Services): 6,900,000 Head Start (Preschool): 2,675,000 Teacher Incentive Performance Award (TIPA): 1,624,000 Title III, Part A (English Language Acquisition): 1,524,000 Title II, Part A (Improving Teacher Quality): 1,263,000 Title VIII (Impact Aid): 600,000 Carl Perkins Vocational & Technical: 721,000 Junior ROTC: 400,000 IDEA Preschool Child Find: 338,000 Adult Education & Family Literacy: 302,000 Other: 335,000 TOTAL FEDERAL AWARDS: $29,422, Federal Budget Sequestration and Potential Local Impact November 27, 2012

17 Potential Impact to Prince William County Schools (PWCS) FY 2013 Title VIII, Impact Aid is the only general revenue received by PWCS from the Federal government. This program is subject to immediate sequestration; a reduction of 8.2% amounts to $49,200 FY 2014 In general, education programs in the Federal budget are forward funded in the budget. As such, these programs will not be impacted by sequestration until the beginning of FY 2014, (July 1, 2013.) The non-defense discretionary funds would be subject to a reduction of approximately 8.2%. If all remaining funds were subject to sequestration, PWCS would face a reduction of approximately $2.3 million. Of significant note: 1. Title I (Improving Basic Programs) would result in a reduction of funding by 8.2 percent or $565,800. This reduction will likely require the reduction of staff and direct instructional services to students; 2.Title VI-B (Special Education) An 8.2% reduction in funding amounts to $1,045,000. However, other Federal special education laws prohibit reducing service to students and may even require total special education expenditures to remain the same as prior years Federal Budget Sequestration and Potential Local Impact November 27, 2012

18 Federal Funding to Prince William County (FY2011 Audited Financials) Prince William County Residents Businesses Population: 414,506 At-place Employment: 110,008 Civilian Labor Force: 234,175 Civilian Federal Employees: 7,500 Government Workers: 49,097 Federal Contractors (Total): 282 (Federal, State and Local) Employees: +5,900 Defense Contractors: 171 Employment: +4,000 Non-Defense Contractors: 111 Employment: +1,900 Additional Quantico - 6,900 military personnel, 6,700 civilians, and 2,500 family members Fort Belvoir (Fairfax) 30,000 employees 2013 Federal Budget Sequestration and Potential Local Impact November 27,

19 Can this be avoided? YES! Congress could pass legislation and President Obama would need to sign before January 2, 2013, OR Congress could pass legislation to postpone cuts and buy time for a grand bargain on the federal debt and deficit HOWEVER Moody s Investors Services warned it would lower the U.S. credit rating if negotiations do not produce a plan to stabilize and reduce the national debt. So, there is still real pressure to address our nation s long-term debt AND Both Moody s and S&P have stated that a reduction in the federal rating would have a corresponding reduction in the County s rating 2013 Federal Budget Sequestration and Potential Local Impact November 27,

20 Recommendations Adhere to Principles of Sound Financial Management Do not automatically backfill Federal or State cuts Potential Exceptions Strategic services such as Schools and Public Safety may be impacted more than community is willing to accept Nov. 20, 2012 BOCS approved the Chairman sending a letter to the Federal delegation Requesting action to avoid the fiscal cliff and its negative impacts 2013 Federal Budget Sequestration and Potential Local Impact November 27,

Federal Policy and Legislative Update. Virginia Association of Planning District Commissions July 20, 2017

Federal Policy and Legislative Update Virginia Association of Planning District Commissions July 20, 2017 Presentation Overview Budget and Appropriations Update Congressional To Do List Notable Administration