Category Archives: Budget – United States

How Are Health Centers Responding to the Funding Delay?

Source: Kaiser Family Foundation, Fact Sheet, February 2018

From the summary:
Health centers play an important role in our health care system, providing comprehensive primary care services as well as dental, mental health, and addiction treatment services to over 25 million patients in medically underserved rural and urban areas throughout the country. Health care anchors in their communities and on the front lines of health care crises, including the opioid epidemic and the current flu outbreak, health centers rely on federal grant funds to support the care they provide, particularly to patients who lack insurance coverage. However, the Community Health Center Fund (CHCF), a key source of funding for community health centers, expired on September 30, 2017, and has since been extended through only March 31, 2018. The CHCF provides 70% of grant funding to health centers. With these funds at risk, health centers have taken or are considering taking a number of actions that will affect their capacity to provide care to their patients. This fact sheet presents preliminary findings on how health centers are responding to the funding uncertainty.

Funding and Financing Highways and Public Transportation

Source: Robert S. Kirk, William J. Mallett, Congressional Research Service, R44674, CRS Report, January 11, 2018

Almost every conversation about surface transportation finance begins with a two-part question: What are the “needs” of the national transportation system, and how does the nation pay for them? This report is aimed almost entirely at discussing the “how to pay for them” question. Since 1956, federal surface transportation programs have been funded largely by taxes on motor fuels that flow into the Highway Trust Fund (HTF). A steady increase in the revenues flowing into the HTF due to increased motor vehicle use and occasional increases in fuel tax rates accommodated growth in surface transportation spending over several decades. In 2001, though, trust fund revenues stopped growing faster than spending. In 2008 Congress began providing Treasury general fund transfers to keep the HTF solvent….

Giving or Getting: New York’s Balance of Payments with the Federal Government

Source: Donald J. Boyd, Lucy Dadayan, and Jim DeWan, Nelson A. Rockefeller Institute of Government, September 2017

From the press release:
Today, the Rockefeller Institute of Government released a new report, Giving or Getting: New York’s Balance of Payments with the Federal Government, to examine what states gave in tax dollars versus what states got from the federal government.
Modeled off of the “Fisc” reports issued by Daniel Patrick Moynihan, the former United States senator from New York, the Rockefeller Institute of Government report found that:
• Thirteen states had a “negative” balance of payment with the federal government. From worst to least they are: New York, New Jersey, Illinois, California, Massachusetts, Connecticut, Minnesota, Texas, North Dakota, Colorado, New Hampshire, Nebraska, and Wyoming. New York’s residents and economy contributed approximately $48 billion more in taxes to the federal government than New York received in federal spending —- the largest of any state.
• New York’s negative balance of payments roughly equals the combined shortfalls of 2nd ranked New Jersey and 3rd ranked Illinois. California and Massachusetts rounded out the list of top five states.
• On a per-capita basis, New York had the third-worst balance of payments, after New Jersey and Connecticut. New York’s people and economy paid the federal government $2,425 more per person than they received. By contrast, the average state experienced a positive balance of payments of about $1,305 per capita.
• New York’s negative balance of payments is driven primarily by federal taxes, rather than spending. Payments from New York to the federal government were $12,820 per capita, or approximately $3,401 higher than the national average.
• Federal spending in New York was $329 lower than the U.S. average, adding to the revenue disparity, but the revenue difference is much larger than the spending difference. ….

The Effects of Terminating Payments for Cost-Sharing Reductions

Source: Congressional Budget Office, pub no. 53009, August 2017

Under the Affordable Care Act (ACA), insurers receive federal payments to cover costs incurred when offering plans with reduced deductibles, copayments, and other cost sharing to some people who purchase plans through the ACA marketplaces.

If those payments for cost-sharing reductions stopped after the end of this year, participating insurers would raise premiums to cover the costs. CBO and the staff of the Joint Committee on Taxation estimate that ending those payments would increase the federal deficit, on net, by $194 billion from 2017 through 2026, mostly because that change would result in increased costs for premium assistance tax credits. The number of people uninsured would be slightly higher in 2018 but slightly lower starting in 2020….

Federal Share of State Revenue Rises as Medicaid Grants Expand

Source: Phillip Oliff, Justin Theal, and Brakeyshia Samms, The Pew Charitable Trusts, States’ Fiscal Health, July 25, 2017

The share of states’ revenue made up by federal dollars rose in fiscal year 2015, capturing the first full year of expanded Medicaid eligibility in some states. The federal government provided 31.9 percent of 50-state revenue in fiscal 2015—the third-largest share on record—up from 30.7 percent in fiscal 2014.
For a second consecutive year, federal dollars as a share of state revenue increased in a majority of states—29 in fiscal 2015. Health care grants have been the main driver of increases in federal funding to states in recent years.

Federal grants to states rose 10.2 percent in fiscal 2015, outpacing overall revenue growth of 6.3 percent. The $55 billion increase in federal funds boosted the share of state revenue coming from the U.S. government to its third-highest level since at least 1961. The federal share of state revenue, however, was still lower than just after the Great Recession, when an influx of economic stimulus dollars and falling state tax revenue increased the federal share to 35.5 percent in fiscal 2010 and 34.7 percent in fiscal 2011. Declines in the federal share after fiscal 2010 reflected the phasing out of stimulus funds and the recovery of states’ tax collections. Changes in either revenue source affect the ratio of federal to total dollars.

CDBG Works

Source: David W. Burns, Report on City Projects, June 2017

From the summary:
The Community Development Block Grant (CDBG) program is the key tool cities use to revitalize low and moderate-income neighborhoods and serve the people who live in them. Administered by the Department of Housing and Urban Development, CDBG was launched in 1974 and has served thousands of communities across the nation. “Entitlement” communities receive funds directly from the federal government based on a highly targeted formula. The balance of funds go to States which administer CDBG resources to smaller towns and communities on a competitive basis. CDBG allows local governments the flexibility to design their own comprehensive revitalization plans in the context of targeted objectives to serve low and moderate income people. ….

…. CDGB is not just another federal program. It is a lifeline to poor neighborhoods that for too long have suffered disinvestment in both their physical infrastructure and their people. This publication, CDBG WORKS, is designed to illustrate the types of projects CDBG makes possible. CDBG funds housing rehab programs for in-home seniors and those with disabilities, making it possible for them to gain access and stay in their homes. It funds Boys and Girls Clubs to provide youth productive activities as an alternative to the streets. It supports community and social service organizations that provide counseling to victims of domestic violence and those who suffer from homelessness and mental health problems. The list goes on and on. ….

The Trump team’s poor arguments for slashing SNAP

Source: Patricia Smith, The Conversation, June 25, 2017

The Trump administration aims to slash spending on the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, by US$193 billion over the next decade. The proposal would also overhaul how the nation’s main nutrition assistance program operates, potentially encouraging additional cuts by the states.

Curbing SNAP’s reach is only one way that Office of Management and Budget Director Mick Mulvaney and other officials are trying to trim the safety net to save taxpayer dollars – while simultaneously boosting military spending.

As an economist who studies nutrition policy, I don’t understand what good the administration thinks it can do by overhauling and paring back an effective and efficient program. By many measures, SNAP successfully satisfies an essential human need and fulfills its mandate to promote the general welfare….

The Water Infrastructure Finance and Innovation Act of 2014: Structure and Effects

Source: Sridhar Vedachalam, R. Richard Geddes, Journal – American Water Works Association, Volume 109 Number 4, April 2017

From the abstract:
Many US municipalities confront serious challenges due to aging water and wastewater infrastructure. Many systems require immediate repairs, upgrades, and replacement, but available funding is scarce. Readily available low-interest financing is of great help to such municipalities. The Water Infrastructure Finance and Innovation Act (WIFIA) approved by Congress in 2014 was a step in that direction. WIFIA is a five-year pilot program focused on supporting large-scale projects that may be under-served by existing state revolving funds (SRFs). The authors examine the structure and implementation of WIFIA and its impact on existing financing mechanisms. The cost of debt service in four representative communities in New York was compared under WIFIA, SRFs, and tax-exempt municipal bonds. Although WIFIA financing offered the lowest debt service cost, savings from WIFIA depended on the spread between US Treasury rates and borrowing rates of the SRF-administering agency.

The Trump Budget Threatens Children’s Health

Source: Thomas Huelskoetter, Center for American Progress, May 30, 2017

The Children’s Health Insurance Program (CHIP) has been a vital part of America’s health care safety net since its creation in the 1990s. Last year, it provided coverage for almost 9 million children. CHIP is traditionally considered a bipartisan success story and has played a critical role—together with Medicaid and the private market reforms in the Affordable Care Act—in reducing the rate of uninsured children to a historic low of 4.8 percent.

However, CHIP’s funding is not permanent and must be reauthorized this September. Recently, the bipartisan National Governors Association strongly recommended that Congress extend CHIP funding for five years, explaining that “access to health insurance is critical to ensuring a healthy start for our nation’s children.”

Unfortunately, the Trump budget rejects this bipartisan tradition of support by proposing to cut CHIP funding by 20 percent. At first glance, the budget’s proposal to extend CHIP funding for two years may appear to be a positive step. In reality, however, the budget pairs this extension with funding cuts and policy changes that would result in children losing CHIP coverage and potentially becoming uninsured. Even including the cost of the funding extension, the Trump budget would cut CHIP by a net $3.4 billion from fiscal year 2017 to fiscal year 2018—a 20 percent reduction….