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Federal Budgets and Revenue Update

May 27, 2005
Volume 11, Number 7

An Information Service of the NCSL Budgets and Revenue Committee

Back Issues Archive

HOUSE MOVES FORWARD ON FY 2006 APPROPRIATIONS BILLS

House appropriators have moved over half of the FY 2006 appropriations bills out of subcommittee and four of those—Homeland Security, Interior & Environment, Energy & Water, and Military Quality of Life and Veterans Affairs—have received a favorable vote on the House floor. Recent committee activity includes:

Agriculture: The unnumbered bill, as reported out of committee on May 25, includes $5.3 billion for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) ($5.278 billion was provided in FY 2005). Funding for the Food Stamp Program is set at $40.7 billion ($35.1 billion was provided in FY 2005). The bill also includes an amendment prohibiting the use of FDA funds to enforce a ban on drug importation. Similar language has been stripped out by the full committee each of the past five years.

Science-State-Justice-Commerce: The unnumbered bill, as reported out of subcommittee on May 24, does not include funding for the President’s proposed “Strengthening America’s Communities Grant Program,” a consolidation of 18 existing economic and community development programs including the Community Development Block Grant and the Community Service Block Grant. The bill does provide $2.6 billion in federal assistance to state and local law enforcement. Of this total, the Edward Byrne Justice Assistance program receives $348 million while the State Criminal Alien Assistance Program receives $355 million. The President’s FY 2006 budget eliminated funding for these programs.

As a follow up to the May 6 edition of the Federal Budgets and Revenue Update, the House Homeland Security Appropriations bill includes language exempting DHS Office of Domestic Preparedness (ODP) homeland security grants from the Cash Management Improvement Act (CMIA). The CMIA provides the general rules and procedures for the efficient transfer of federal financial assistance between the federal government and the states—to minimize interest exchanges. Under the CMIA, states have to submit a receipt in order to draw down ODP grant funds. The exemption, which was also provided in FY 2005, allows states to draw down funds up to 120 days in advance of their use.

CUNO LEGISLATION INTRODUCED IN SENATE

On May 18, Senator George Voinovich (R-Ohio) and Representative Patrick Tiberi (R-Ohio) introduced legislation (S. 1066 and H.R. 2471 respectively) in response to the decision rendered in Cuno v. DaimlerChrysler. In general, the bill preserves the ability of states to provide certain tax incentives to individuals and corporations for the purpose of economic development. The legislation also specifies types of tax incentives not subject to protection under the bill. Two subcommittees of the House Judiciary Committee recently held a joint hearing examining the Cuno decision. For more information on the hearing, visit http://judiciary.house.gov/oversight.aspx?ID=164.

INDIVIDUAL AMT REPEAL SUPPORTED BY COALITION IN SENATE FINANCE

On May 23, a bipartisan group of Senate Finance Committee members introduced legislation repealing the individual alternative minimum tax (AMT). In testimony before the committee on May 23, Congressional Budget Office (CBO) Director Douglas Holtz-Eakin noted that, “In 2002, about 2 million taxpayers paid additional taxes as a result of the AMT; in 2010, roughly 30 million taxpayers are expected to owe more because of it.” The President’s Advisory Panel on Tax Reform may also make recommendations regarding the future of the AMT as part of its expected July 31 recommendations.

2005 Annual Meeting Graphic What: NCSL Annual Meeting
Where: Seattle, Washington
When: August 16 – 20, 2005
How to Register: online or send us the registration form.
Early bird saves $35-$85 until May 27; after May 27, go online and save $20

For more information, contact NCSL staff: Molly Stauffer, Nick Steidel.