1. Federal Funds Information for States www.ffis.org www.ffis.org Progress? Or Same Old, Same Old? NASBO Annual Meeting Stowe, Vermont August 2015

2. 2015 Congressional “To Do” List FY 2016 appropriations Reconciliation Surface transportation ESEA (No Child Left Behind) Debt limit Other issues/deadlines

3. Where the money goes: pieces of the federal budget pie Composition of Federal Outlays in FY 2014 ($ in billions, % of total)

4. Many grants have been flat…

5. …and the future is uncertain

6. BCA still the law of the land Mandatory sequestration occurs on October 1 for covered programs – FY 2016: -6.8% for non-defense – e.g., SSBG, PSSF, highway spending outside the obligation limitation Discretionary sequestration built into the caps

7. Budget Resolution Process

8. Divergent paths create problems

9. Differences of magnitude, not direction

10. The most progress in years

11. How do major program areas fare? ($ in millions) Proposed FY 2016 vs. FY 2015 Federal AgencyFY 2015PresidentHouseSenate Agriculture $6,9020%-2%-1% Education 36,5476%-4%-2% HHS 26,7145%-2%-1% HUD 42,2698%3%2% Energy/EPA 2,5990%-22%-20% Justice 1,2551%6%-3% Homeland Security 1,4821%0%-1% Labor 6,06610%0%-4% Transportation 55,56829%-0%-1% Total – Discretionary 179,61413%-1%

12. There’s always a “but” OMB recommends a veto of any legislation “that implements the current Republican budget framework” CR all but certain A new budget deal to amend the BCA? – Changes to mandatory programs? Focus on timing: a mid-December convergence?

13. All’s quiet on the reconciliation front Ambitious agenda gave way to “replace ACA, deal with King v. Burwell” July 24 deadline came and went Project creep?

14. Must do: surface transportation Short-term: Extend HTF, surface transportation programs (expire 10/29/15; HTF solvent through 2015) Long-term: Reauthorize programs for multiple years (Senate passed 6-year reauthorization; House plans to release bill in the fall) Expect another short-term extension…until mid-December?

15. ESEA reauthorization on the move Heading to conference. Issues: – Title structure – Authorized spending levels – Title I portability – Title I formula change in Senate – Title II formula change in House/Senate – MOE requirements – Eliminated and added programs – See www.ffis.org for full coveragewww.ffis.org

16. ESEA money is in formula grants

17. ESEA formula money is in Title I

18. Title I drives $14.4B

19. Title II drives $2.3B

20. Will the debt limit wreak havoc? Current estimate: end of CY 2015. Will budget deal/CR/HTF be added to the mix? Will reductions to mandatory programs be on the table? These events always pose a risk to the economy, state tax revenues.

21. Other Issues/Deadlines TANF reauthorization (9/30/15; House discussion draft) Child welfare financing (Senate discussion draft) Older Americans Act (Senate passed) Child nutrition (9/30/15 for some; no action) PILT/SRS (9/30/15) AIP (9/30/15) Tax extenders (for CY 2015)

22. Take-aways Appropriations: CR for sure, budget deal possible, conflict certain Reconciliation: delayed, and president must sign Surface transportation: short-term fix, long-term problem ESEA: optimism abounds Debt limit: poses the greatest risk for mayhem Focus on mid-December

23. Questions? Check for updates at www.ffis.org mhoward@ffis.org 202-624-5848www.ffis.org mhoward@ffis.org