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NCSL Legislative Summit, July 2009 FEDERAL FUNDING UPDATE

NCSL Legislative Summit, July 2009 FEDERAL FUNDING UPDATE. Trinity D. Tomsic ttomsic@ffis.org Federal Funds Information for States ( www.ffis.org ). Major Issues Facing Congress. FY 2010 Appropriations Health Care Reform Reauthorization Bills Highway Trust Fund PASS ID Higher Education.

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NCSL Legislative Summit, July 2009 FEDERAL FUNDING UPDATE

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  1. NCSL Legislative Summit, July 2009FEDERAL FUNDING UPDATE Trinity D. Tomsic ttomsic@ffis.org Federal Funds Information for States (www.ffis.org)

  2. 2 Major Issues Facing Congress • FY 2010 Appropriations • Health Care Reform • Reauthorization Bills • Highway Trust Fund • PASS ID • Higher Education

  3. Actions to Date FY 2009 Supplemental Appropriations Bill $350m for seasonal flu preparedness efforts $30m for Operation Stonegarden (part of State Homeland Security Grant Program) $82m for refugee assistance $250m for wildfire suppression The American Recovery and Reinvestment Act Reporting guidance released Guidance expected on Race to the Top Funds CHIP Reauthorization Substantial funding increases, new flexibility, FMAP fix 3

  4. FY 2010 Appropriations Process President’s Budget Congressional Action Major State Programs At Risk Potential Increases 4

  5. President’s FY 2010 Budget Proposes increases for both defense and non-defense programs Slight increases or level funding for most discretionary programs Funding reductions for some programs included in ARRA A few small-scale new initiatives Health Reform Reserve Fund, savings from proposed changes to Medicaid and Medicare 5

  6. 6 Congressional Action

  7. 7 Congressional Action, Cont.

  8. 8 At-Risk Programs

  9. 9 At-Risk Programs, Cont.

  10. 10 Potential Increases

  11. 11 Potential Increases, Cont.

  12. Health Care Reform House Proposal Committee mark-up (Energy and Commerce, Ways and Means, Education and Labor) Mandatory Medicaid Expansion (133% FPL) Mandated Medicaid Physician Rate Increase 100% Federally-Financed; MOE requirements Senate Proposals HELP committee bill passed 7/15/09 Finance committee (Medicaid, Medicare, tax) No legislative language Mandatory Medicaid expansion; temporary federal funding 12

  13. Health Care Reform, Cont. Tremendous pressure to pass legislation CBO critical of cost; failure to control health spending Potential State Costs Mandatory Medicaid Expansion - $23 billion (low estimate) Potential rate increases affect existing population and expansion population Talk of FMAP formula change (winners and losers) 13

  14. 14 Program Reauthorizations July 16, 2009: The Senate Energy and Natural Resources Committee yesterday held its first hearing this Congress on legislation to overhaul the nation’s hardrock mining law, which has not been reauthorized since 1872. The committee is considering two different bills to reauthorize the 1872 law.

  15. 15 Program Reauthorizations • Ryan White AIDS Programs • Programs sunset on Sept. 30, 2009; congressional action needed • Extension likely (language included in pres. budget) • Reauthorization debate: revamp program vs. more time to analyze 2006 reauthorization • No Child Left Behind • 2002 rewrite of Title I programs expired Sept, 30, 2007 • State groups focused on funding, flexibility, and reassertion of states’ role in education policy • Congressional action failed last year; no action anticipated this year

  16. 16 Program Reauthorizations, Cont. • Child Nutrition/WIC • Programs expire on September 30, 2009 • Clean Water/Drinking Water SRF • Passed House 3/12/09 • Increased funding, extend loan repayment, expand program eligibility • Workforce Investment Act • Authorization expired Sept. 30, 2003 • Lots of discussion; little action • Senate HELP committee recently held hearing

  17. 17 Program Reauthorizations, Cont. • Federal-Aid Highways • Highway Trust Fund broke; Senate proposes $20 billion general fund transfer (solvent 12/31/2011) • Programs expire Sept. 30, 2009; congressional action needed • President: 18-month extension w/fixes • Senate Committee: Approved 18-month “clean” extension • House Committee: $500 billion reauthorization

  18. 18 Other Issues • REAL ID vs. PASS ID • Senate bi-partisan proposal introduced; administration support • Lower state cost; additional federal funds to implement minimum standards • 2010 Census Looming • Impact on federal funding allocations ($300 billion) • Higher Education • President announced $12 billion community college initiative • Student loan program overhaul possible

  19. 19 Take Aways – Short Run • FY 2010 appropriations may happen on time (most bills, at least); status quo for states • Few reauthorization bills will pass • Talk of another stimulus will continue, even without broad support • Health Reform will pass if cost issue addressed, state impact likely in long-term • Continued focus on ARRA implementation

  20. 20 Take Aways – Long Run • Federal outlays will continue to be record- and deficit-breaking; states benefit • What goes up must come down. Short-term gains will be reversed over the long term. • Major restructuring of state-federal programs? Many argue that crises are an ideal time to shake things up.

  21. 21 FFIS Publications/Email List Almost all states subscribe to FFIS, please contact Carol Ryder for your password and to be added to the distribution list. ryder@ffis.org 202-624-5849

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