Budget Blog

July 5, 2022 - Washington Report

By Leah Wavrunek posted 07-05-2022 03:12 PM

  

This Week on the Hill  

The House and Senate are out this week.

 

Treasury Updates SLFRF Reporting User Guides for July 31 Deadline

On Friday the Treasury Department released the updated State and Local Fiscal Recovery Fund (SLFRF) Project and Expenditure Report User Guide and the Recovery Plan User Guide. Both items are due July 31. The Project and Expenditure Report User Guide includes a frequently asked questions section to address common reporting concerns and according to the Revision Log (pg. 141), the guide was updated to reflect changes to tax offset provisions, changes to capital expenditure reporting, and additions to broadband fields. The Recovery Plan User Guide (see Revision Log pg. 8) was updated to incorporate CSV download and references to the updated Recovery Plan template. Additional information on recipient compliance and reporting responsibilities can be found here.

 

Treasury Releases Information for ERA2 Reallocation and Tranche Payments

Last week the Treasury Department released additional information for the Emergency Rental Assistance 2 (ERA2) program. The department updated the ERA2 Reallocation Guidance related to the Quarter 1 Assessment (see footnote #3) and posted instructions for grantees who wish to draw down additional tranche payments for ERA2 awards. More information on the program can be found here.

 

COVID-19 Relief Implementation

The following guidance and information was recently released to implement provisions in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (Division M of H.R. 133, the Consolidated Appropriations Act, 2021), and the American Rescue Plan Act of 2021 (ARPA).

  • Administration Launches National Effort to Support Students: The administration is calling on schools to use the $122 billion in ARPA funds to provide high-quality tutoring, summer learning and enrichment, and afterschool programs as part of a national effort to support student success. The Department of Education is also partnering with groups to recruit 250,000 new tutors and mentors and is expanding its Best Practices Clearinghouse.
  • PRAC Releases SLFRF Data Dashboard: The Pandemic Response Accountability Committee (PRAC) announced updated interactive data dashboards including for the State and Local Fiscal Recovery Fund (SLFRF), Shuttered Venue Operators Grant and Restaurant Revitalization Fund.
  • HHS Awards $155 Million to Expand Medical Training in Rural Communities: The Department of Health and Human Services (HHS) announced over $155 million in awards for 72 teaching health centers that operate primary care medical and dental residency programs. The program focuses on supporting residents in primary care residency training programs to meet the medical and mental health needs of rural and underserved communities. The funding includes $135 million in ARPA funds to support additional resident positions.

 

IIJA Implementation Resources Released

Federal agencies continue to release implementation resources pertaining to the Infrastructure Investment and Jobs Act (IIJA).

  • The Department of Transportation (DOT) announced it is accepting applications for the Reconnecting Communities Pilot (RCP) discretionary grant program. Created in the IIJA, funding from the $1 billion pilot program will help reconnect communities that were previously cut off from economic opportunities by transportation infrastructure. Of the $195 million available from the grant program this year, $50 million is dedicated to planning activities for communities that may be earlier in the process. Resources released include the Notice of Funding Opportunity, technical assistance information, additional guidance, webinars, and FAQs. Applications are due by October 13.
  • The National Oceanic and Atmospheric Administration (NOAA) announced funding opportunities from the agency’s $2.96 billion in IIJA funds to address the climate crisis and strengthen coastal resilience and infrastructure. Funding projects will support three major initiatives: Climate Ready Coasts ($1.467 billion over five years); Climate Data and Services ($904 million over five years) and Fisheries and Protected Resources ($592 million over five years).
  • The Department of Transportation (DOT) issued a Notice of Funding Opportunity (NOFO) for more than $573 million in available grant funding for the Railroad Crossing Elimination Program. Created by the IIJA, this new competitive discretionary grant program is intended to help improve safety, eliminate lengthy delays at railroad crossings, and ultimately lower the costs of transporting goods. At least 20 percent of available funding will go to rural and Tribal areas. Applications are due 90 days after date of publication in the Federal Register.
  • The U.S. Department of Agriculture (USDA) announced it is accepting applications for a new pilot program created under the IIJA to support the development of biobased products that have lower carbon footprints and increase the use of renewable agricultural materials, creating new revenue streams for farmers. Under the program, USDA can award up to $10 million divided among the highest rated applications that include eligible universities and private-sector partners. Applications are due by August 31.
  • The Department of Transportation (DOT) released the DOT Navigator, a new resource to help communities understand the best ways to apply for grants, and to plan for and deliver transformative infrastructure projects and services. For example, technical assistance resources for state departments of transportation can be found here.

 

Fiscal Year 2023 Budget Update

Last week the full House Appropriations Committee completed work on the twelve appropriations bills for fiscal year 2023. The bills can now be considered on the House floor.

 

Supreme Court Decision Addresses EPA Regulatory Authority

On Thursday the U.S. Supreme Court issued a 6-3 opinion in the case of West Virginia v. Environmental Protection Agency (EPA). In the decision, the majority found that Congress did not grant EPA the authority under the Clean Air Act to devise emissions caps based on the approach undertaken in the Clean Power Plan (a rule promulgated in 2015). Several judicial experts believe the decision could have implications beyond climate policy due to the majority and concurring opinions use of the “major questions doctrine,” which holds that Congress must explicitly grant an agency the authority to regulate issues that have “vast economic and political significance.” In a concurring opinion, Justice Gorsuch writes that “the Constitution does not authorize agencies to use pen-and-phone regulations as substitutes for laws passed by the people’s representatives.” A statement from the EPA Administrator on the opinion can be found here.

 

DOL Issues Statement on Expiration of Trade Adjustment Assistance for Workers Program

On Friday Department of Labor (DOL) Secretary Marty Walsh issued a statement on the termination of the Trade Adjustment Assistance for Workers Program, which expired on June 30. As a result of the expiration, the Employment and Training Administration began phasing-out activities as the department is required to cease making determinations on petitions immediately. The department recently published a guidance letter to explain the operation status of petitions and investigations, fiscal funding and the administration of benefits and services for participants after June 30, 2022. Fiscal year 2022 program training funds will be available to states through 2025.

 

HHS Renews Public Health Emergency for Opioid Crisis

The Secretary of Health and Human Services (HHS) renewed, effective July 4, the determination that an opioid public health emergency exists nationwide. The original determination was made on October 26, 2017 and the most recent renewal was effective April 4.

 

USDA Announces $943 Million to Offset Higher Food Costs for Schools

Last week the U.S. Department of Agriculture (USDA) announced it will provide $943 million in additional funding to schools to support the purchase of American-grown foods for their meal programs. Provided through the Commodity Credit Corporation, the funds will be distributed by state agencies to schools so they can purchase domestically-grown foods for their meal programs. The press release also highlights assistance provided by the recently enacted Keep Kids Fed Act (P.L. 117-158).

 

ACF Releases SSBG Fourth Quarter Awards

On Friday the Administration for Children and Families (ACF) released a Dear Colleague letter to program officials and state contacts for the Social Services Block Grant (SSBG) and Consolidated Block Grant (CBG). The letter provides grant recipients with notice of the fourth quarter awards and allocations for federal fiscal year 2022. The SSBG fourth quarter funds were released to all SSBG states and territory grant recipients to provide funding for the period from July 1, 2022 through September 30, 2022. An allocation chart can be found here.

 

Recently Released Reports

State Tax Changes Taking Effect July 1, 2022

Tax Foundation

Report on Indicators of School Crime and Safety: 2021

Bureau of Justice Statistics and National Center for Education Statistics

Medicaid: State Directed Payments in Managed Care

U.S. Government Accountability Office

 

 

Economic News

Unemployment Claims Reported for Week Ending June 25

The U.S. Department of Labor released unemployment insurance weekly claims data last Thursday that showed for the week ending June 25, the advance figure for seasonally adjusted initial claims was 231,000. This is a decrease of 2,000 from the previous week’s revised level, which was revised up by 4,000 from 229,000 to 233,000. The 4-week moving average was 231,750, an increase of 7,250 from the previous week's revised average of 224,500. The advance seasonally adjusted insured unemployment rate was 0.9 percent for the week ending June 18, a decrease of 0.1 percentage point from the previous week’s revised rate. The advance number of actual initial claims under state programs, unadjusted, totaled 207,421 in the week ending June 25, an increase of 1,060 (or 0.5 percent) from the previous week.

 

Real GDP Decreased in 46 States in the First Quarter 2022

New data released by the U.S. Department of Commerce shows that real gross domestic product (GDP) decreased in 46 states and the District of Columbia in the first quarter of 2022, as real GDP for the nation decreased at an annual rate of 1.6 percent. The percent change in real GDP in the first quarter ranged from 1.2 percent to -9.7 percent across specific states. Real GDP decreased in 8 of the 21 industry groups for which the department prepares quarterly state estimates, as nondurable goods manufacturing, retail trade, and finance and insurance decreased 17.0, 10.2, and 7.1 percent, respectively, for the nation and were the leading contributors to the decrease in real GDP. These three industries contributed decreases in all 50 states and the District of Columbia.

 

Personal Income Rises 0.5 Percent in May

Personal income increased $113.4 billion (0.5 percent) in May according to estimates recently released by the Department of Commerce Bureau of Economic Analysis. Disposable personal income (DPI) increased $96.5 billion (0.5 percent) and personal consumption expenditures (PCE) increased $32.7 billion (0.2 percent). Real DPI decreased 0.1 percent in May and real PCE decreased 0.4 percent. The PCE price index increased 0.6 percent; excluding food and energy, the PCE price index increased 0.3 percent. The increase in personal income in May primarily reflected increases in compensation and proprietors' income that were partly offset by a decrease in government social benefits. Personal outlays increased $38.3 billion in May, while personal saving was $1.01 trillion and the personal saving rate (personal saving as a percentage of disposable personal income) was 5.4 percent.

 

Third Estimate Shows GDP Decreased More in First Quarter 2022

Recently released data from the Department of Commerce Bureau of Economic Analysis shows that real gross domestic product (GDP) decreased at an annual rate of 1.6 percent in the first quarter of 2022. Gross domestic product is the value of the goods and services produced by the nation’s economy less the value of goods and services used up in production. This information is based on the “third” estimate, which is derived from more complete source data than were available for the “second” estimate issued in May, which showed a decrease of 1.5 percent. The update primarily reflects a downward revision to personal consumption expenditures (PCE) that was partly offset by an upward revision to private inventory investment. In the fourth quarter of 2021, real GDP increased 6.9 percent.