The federal budget is a central component of the congressional “power of the purse.” Each fiscal year, Congress and the President engage in a number of activities that influence short- and long-run revenue and expenditure trends. This report offers context for the current budget debate and tracks legislative events related to the federal budget. …. Trends resulting from current federal fiscal policies are generally thought by economists to be unsustainable in the long term. Projections suggest that achieving a sustainable long-term trajectory for the federal budget would require deficit reduction. Reductions in deficits could be accomplished through revenue increases, spending reductions, or some combination of the two. ….
Source: Dmitriy Plit, Florence Zeman, Moody’s, Sector Comment, Public housing authorities – US, April 4, 2018
The recently enacted federal omnibus spending bill appropriates $2.75 billion for the Public Housing Capital Fund, a substantial increase over the $1.94 billion for federal fiscal year 2017.
US states, local governments and transit authorities’ funding constraints add a layer of difficulty to the Trump administration’s infrastructure plan. The proposal relies on municipalities’ ability to increase leverage, identify new revenue streams and attract private sector partners.
No wonder the Trump administration is gunning for them.
Among the disappeared in Donald Trump’s fiscal-year 2018 budget was something most of us didn’t notice at first: the dissolution of the Institute of Museum and Library Services. Take that away and virtually all federal support for public libraries disappears. While the institute doesn’t represent a massive amount of money—by one accounting, its $230 million was 0.006 percent of the federal budget in 2016—it has been crucial for sustaining libraries, especially those in struggling urban neighborhoods and rural areas…..
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.
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….
Source: Bernard Yaros, Regional Financial Review, November 2017
Which U.S. regions would benefit the most from the Trump administration’s spending objectives? This article focuses on the regional impact of shifts in defense spending, veterans benefits, and border security expenditures.
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. ….
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….
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.