CSAC Bulletin Article

Federal Issues Update

May 4, 2017

Congress Set to Clear Massive Omnibus Spending Bill

On Wednesday, the House approved a fiscal year 2017 omnibus appropriations package after negotiators struck a long-awaited deal earlier this week to keep the federal government open through the end of September. The bill, which passed with bipartisan support, now heads to the Senate, which will have to approve it by Friday, when current funding expires.

Although GOP congressional leaders made the decision last year to delay consideration of the 2017 budget in order to give the Trump administration sufficient opportunity to mold the legislation, the final agreement rejects many of the priorities sought by the president. By way of illustration, the $1.1 trillion funding bill does not include the $18 billion in discretionary spending cuts proposed by the White House or money for a border wall (the measure would allow funds to be spent on replacement border fencing). Also left out of the legislation were a bevy of policy riders that Democrats considered to be “poison pill” amendments.

At the same time, congressional Republicans and President Trump were able to secure several notable wins. For example, the budget package provides a $15 billion boost in supplemental defense spending, with $2.5 billion of the funding contingent on the administration delivering a new plan to combat the Islamic State. The bill also includes $1.5 billion for border security, although funding cannot be used for additional Immigration and Customs Enforcement agents, or, as previously noted, for the construction of a border wall.

All told, the final fiscal year 2017 budget represents a victory for California’s counties. Faced with the possibility of significant spending cuts in the current year, Congress ultimately rebuffed many of the programmatic funding reductions that were being aggressively pursued by the White House.

A number of local government programs were maintained at their current level, including the State Criminal Alien Assistance Program (SCAAP; $210 million) and the Community Development Block Grant (CDBG) program ($3 billion). Meanwhile, several programs of interest to counties received spending increases, such as the Payments-in-Lieu-of-Taxes (PILT) program (+$13 million), rural development programs (+$166 million), and highway funding (+905 million). It should also be noted that the legislation would continue the Rohrabacher-Farr marijuana rider, which prohibits the Department of Justice from prosecuting businesses and individuals that are acting in compliance with state-legal medical marijuana laws.

Senate Committee Hears From Counties on SRS and PILT Funding; SRS Extension Introduced

The Senate Energy and Natural Resources (ENR) Committee held an oversight hearing on Tuesday, May 2 to examine federal payments to local governments provided through the Secure Rural Schools (SRS) program and the federal Payments-in-Lieu-of Taxes (PILT) program. The hearing also explored the need for the federal government to provide greater fiscal certainty for resource-dependent communities with tax-exempt federal lands.

The panel of invited witnesses included: officials from the Department of the Interior and the U.S. Forest Service; Mayor David Landis from the Ketchikan Gateway Borough (Alaska); Commissioner Gordon Cruickshank from Valley County (Idaho); Commissioner Mike Manus from Pend Oreille County (Washington); Commissioner Mark Whitney from Beaver County (Utah); and, Mark Haggerty from Headwaters Economics.

The witnesses all spoke to the challenges faced by rural communities when the federal government does not meet its obligations. They also urged the committee to immediately reauthorize SRS and fully fund the PILT program.

In her opening statement, ENR Committee Chairwoman Lisa Murkowski (R-AK) encouraged members to think creatively about funding payments for tax-exempt lands, including alternative management models that could help generate more revenue. For his part, Mark Haggerty proposed establishing a permanent endowment that would fund the program through commercial receipts derived from federal lands. Meanwhile, other members of the committee discussed the importance of increasing timber sales to boost revenues.

While the issue of increased logging has become a partisan debate that divides Republicans and Democrats, committee members from both parties made clear that they support reauthorizing SRS and fully funding the PILT program.

Following the hearing, bipartisan legislation (HR 2340; S 1027) was introduced in the House and Senate to reauthorize SRS – which is currently expired – for an additional two years. As previously mentioned, PILT was included at its full funding amount ($465 million) in the year-end budget deal.

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