Capitol to Capitol
An Information Service of NCSL's Standing Committees

Volume 20   Issue 13 - April 12, 2013

BEHIND BUDGET DOOR #3

The president unveiled his FY 2014 budget proposal—weighing in at $3.77 trillion—on Wednesday, and it’s a mixed bag for states. It includes additional funding for infrastructure and education but could lower the demand for municipal bonds. The proposal would reduce the nation’s deficit by $1.8 trillion over the next 10 years by increasing taxes on high-income families, health care savings, and changing the manner in which inflation is measured, among other things. However, $1.2 trillion in savings would go toward replacing the sequestration reductions scheduled over the next eight years. The proposal would also (1) provide employers with tax relief in states indebted to the federal unemployment insurance trust fund, (2) increase the federal cigarette tax to pay for a new “Preschool for All” initiative with states, and (3) provide $50 billion in stimulus-like funding for infrastructure projects. For further analysis, NCSL has compiled a full budget summary.
 
The president’s proposal—typically released the first week of February, but delayed this year because of uncertainty surrounding the fiscal cliff—marks another step in the FY 2014 federal budget process. In March, both the House and Senate passed budget resolutions detailing their fiscal vision for the next year and beyond. The chairs of the House and Senate Budget Committees, Rep. Paul Ryan and Sen. Patty Murray, are working on a framework for budget resolution negotiations. Both were cautious about expectations. “We are committed to working to find common ground. We look forward to continuing the conversation as we move toward a conference committee,” the leaders said in a joint statement.
 
NCSL urged both Congress and the president to address the nation’s fiscal challenges by enacting comprehensive legislation for long-term deficit reduction. NCSL’s statement also recommends lawmakers adhere to NCSL’s long-held deficit reduction principles, including mechanisms for shared savings and program flexibility, no new unfunded mandates, relief from maintenance of effort requirements, establishing a countercyclical trigger for enhanced Medicaid federal matching funds during economic downturns and enactment of the Marketplace Fairness Act. NCSL staff contacts: Michael Bird, Jeff Hurley


SEQUESTER UPDATE

“Consult with state and local government partners.” That was the core message delivered to federal agencies in the fourth and most recent Office of Management and Budget sequestration memorandum. The memo urges agencies to consider how to reduce the administrative burdens of grants so that public funds are used cost effectively while still “protecting mission responsibilities” and adhering to legal requirements. NCSL will share with states any information that surfaces from federal agencies regarding steps that can be taken to deal with sequestration-caused grant reductions. Meanwhile, please share with NCSL any information from your state regarding sequestration-related administrative or red tape relief. NCSL staff contacts: Michael Bird, Jeff Hurley


LESS DUPLICATION PLEASE

From catfish inspections and baggage screenings to supplemental payments to Medicaid and combat uniforms, there are 17 areas where federal programs duplicate and overlap each other and 14 areas where there is the potential for higher cost savings and revenue collections, according to an April 9 Government Accountability Office report. Previous reports are available on the GAO website. NCSL contacts: Michael Bird, Jeff Hurley