Federal Budget and Revenue Update

Budget and Revenue Standing Committee

Federal Budget and Revenue Update
June 21, 2006

Volume 12, Number 7

An Information Service of the NCSL Budgets and Revenue Committee

Permanent Repeal of the Estate Tax

This week, the House will consider H.R. 5638 , the Permanent Estate Tax Relief Act of 2006. In an effort to reduce the cost of the bill, the legislation repeals the deduction of state estate taxes under the Internal Revenue Code beginning in 2010. According to sources, 24 states currently impose an estate or inheritance tax, which results in an estimated $4.7 billion in collections. State legislators may wish to contact their House delegation to discuss the impact of this potential change.

FY 2007 Appropriations Bills

The House is close to completing work on the FY2007 appropriations bills, with all eleven bills having been reported out of the full committee. Still waiting for floor action are Labor/HHS/Education and Science/State/Justice/Commerce.

Table 1: FY 2007 APPROPRIATION BILLS

HOUSE APPROVALS

SENATE APPROVALS

Approved by Subcmte

Approved by Committee

House
Vote

Approved by Subcmte

Approved by Committee

Senate
Vote

Agriculture (H.R. 5384) 5/03/06 5/09/06 5/18/06

Science/State/Justice/Commerce (House)
Commerce/Justice/Science (Senate)
6/14/06 6/20/06

Defense
6/7/06 6/13/06 6/20/06

District of Columbia

Energy & Water
5/11/06 5/17/06 5/24/06

Foreign Operations (House)
State/Foreign Operations (Senate)
5/19/06 6/5/06 6/9/06

Homeland Security (H.R. 5441)
5/11/06 5/17/06 6/6/06

Interior & Env. (House) (H.R. 5386)
Interior (Senate)
5/04/06 5/10/06 5/18/06

Labor/HHS/Education
6/7/06 6/13/06

Legislative Branch
6/1/06 6/1/06 6/7/06

Mil. Qual. of Life/Veterans Affairs (H.R. 5385) (House)
Mil. Const./Veterans Affairs (Senate)
5/04/05 5/10/06 5/19/06

Trans./Treasury/HUD/Judiciary/D.C. (House)
Trans./Treasury/Judiciary/HUD (Senate)
5/26/06 6/06/6 6/14/06

Labor, Health and Human Service, Education Appropriations, FY2007

On June 13th, the House Appropriations Committee approved the Labor , Health and Human Services, Education and Related Agencies Appropriations Act for FY2007. The bill appropriates $141 billion, an increase of almost one percent over FY2006 levels. Below are some highlights.

Department of Labor

Includes an amendment, offered by Representative Hoyer of Maryland, to increase the federal minimum wage to $7.25. The current minimum wage of $5.15 per hour was set in 1997.
Does not include the President’s proposal to consolidate funds for dislocated worker assistance, adult and youth training, and employment services state administration to create in its place
Career Advancement Accounts—self-managed accounts for certain workers in need of new skills/training.
Rescinds $325 million for Training and Employment Services (TES) from prior or current year balances, which may include funds for dislocated worker assistance, adult and youth training and employment services state administration.

Department of Health and Human Services

Community Services Block Grant— reduces funds for the grant program by $181 million below FY2006 levels. The President had sought to eliminate funds for the program.
Child Care and Development Block Grant— funds the program at $2.1 billion, matching the President’s request for this program.
Low Income Home Energy Assistance Program (LIHEAP) – provides $1.9 billion in FY 2007, consistent with regular funding levels over the last decade. The program did receive an extra $1 billion in supplemental funds in FY2006.
Bio-Terrorism State Grants— level funds the grant program at $824 million.
Social Services Block Grant— reduces funds by $550 million below FY2006 levels. The reduction stems from supplemental appropriations for Katrina relief under P.L. 109-148.
Health Professions Training— funds training programs for health care professionals serving underserved areas at $313 million, an increase of $18 million above FY2006 levels. The President’s budget proposal had eliminated funds for a number of these programs.
Rural Health Programs— funds rural health programs at $7 billion, $700 million above the President’s budget request, this includes allocating funds to a number of programs that the administration had proposed to eliminate or significantly reduce:
- Rural Outreach Grants—funds the program to improve health care services to rural Americans at $40 million, $29 million above the President’s proposal and $1 million above FY2006 levels.
- Rural Hospital Flexibility Grants— funds the program at $40 million. The President had proposed to eliminate funds for this program.
- Telehealth— provides $10 million for telehealth, $3 million over FY2006 levels.

In addition, the Committee level-funded several programs the President sought to eliminate, including:

The Preventive Health Block Grant ($100 million).
Emergency medical services for children ($19.8 million).
Universal newborn screening ($10 million).

Department of Education

No Child Left Behind (NCLB)— provides level funding at $12.7 billion in FY2007.
Individuals with Disabilities Education Act (IDEA)— reduces funds by $50 million below FY2006 levels.
Educational Technology State Grants— eliminates funds for this program. The program was funded at $272 million in FY2006.

Senate Appropriations

The Senate has begun work on its appropriations bills for FY2007. This week, the full committee is expected to consider the FY2007 Agriculture and Legislative Branch funding bills.

NCSL Annual Meeting

NCSL's 2006 Annual Meeting in Nashville August 15-18, where America's issues will take center stage. http://www.ncsl.org/annualmeeting/

For more information please contact Molly Ramsdell (Molly.Ramsdell@ncsl.org) or Garner Girthoffer (Garner.Girthoffer@ncsl.org).

Budget and Revenue Standing Committee

Federal Budget and Revenue UpdateJune 21, 2006

Federal Budget and Revenue Update
June 21, 2006