Loading...
HomeMy WebLinkAbout8.1 Oppose Fed Budget Control Act STAFF REPORT CITY CLERK File #660-50 CITY COUNCIL DATE:October 16, 2012 TO: Honorable Mayor and City Councilmembers FROM: Joni Pattillo, City Manager SUBJECT: Consideration of Resolution Opposing Federal Budget Control Act (PL 112-25) Prepared by Amy Cunningham, Assistant to the City Manager EXECUTIVE SUMMARY: The City Council will consider a resolution opposing the Federal Budget Control Act which would avert the pending funding sequester. The sequester will negatively impact funding that is critical to supporting core local programs. FINANCIAL IMPACT: The financial impact is currently unknown to the City of Dublin. RECOMMENDATION: Staff recommends that the City Council consider the proposed resolution and take the appropriate action. Submitted By Reviewed By Budget Manager/ Assistant City Manager Assistant to the City Manager DESCRIPTION: The League of California Cities has requested that cities consider the attached resolution opposing the pending federal funding sequester; the sequester would adversely impact core local programs as outlined below. In July 2011, Congress passed the Budget Control Act (PL 112-25), which established mandatory spending caps on most federal programs through 2021, and arranged additional across-the-board annual spending cuts to federal defense and non-defense discretionary programs over this same period. Included in non-defense discretionary (NDD) programs are critical local government oriented programs, which include the Community Development Block Grant (CDBG), HOME Investment Partnership, COPS and Byrne Justice Assistance Grants. ITEM NO. 8.1 Page 1 of 3 These programs have already experienced significant cuts over the last two federal fiscal years in the following amounts –  CDBG27% - (from $3.99 billion in FY 2010 to $2.9 billion in FY 2012)  HOME44% - (from $1.8 billion in FY 2010 to $1 billion in FY 2012)  COPS55% - (from $298 million in FY 2010 to $166 million in FY 2012)  Byrne/JAG31% - (from $511 million in FY 2010 to $352 million in FY 2012) Potential Impacts Under federal sequestration, additional cuts of approximately 8.4 percent would be imposed on these programs for FY 2013 starting on January 2, 2013. From 2013 through 2021, funding for these programs would be reduced by nearly 28 percent. These programs provide critical support to cities, assisting with implementation of community and economic development initiatives, affordable housing projects, human services programs and public safety services and equipment. Beyond these programs, the sequester would also impose cuts to federal surface transportation funding, with roughly $739 million in highway and road funding vulnerable to these scheduled spending cuts. The sequester would also significantly impact national defense programs. These cuts would be particularly harmful to California, which stands to lose $2 billion in defense contract revenue through the sequester, resulting in an estimated loss of 135,000 private-sector jobs and $11.7 billion in gross state product [GSP]. Key Concerns Achieving deficit reduction cannot be done solely through cuts to local government programs. While there is bipartisan consensus that Congress and the White House need to implement reforms to reduce the federal deficit, targeting solely NDD programs will not achieve sufficient reductions since the deficit has been over $1 trillion and discretionary spending has been less than $500 billion. NDD programs are not the cause of the growing national debt, as they account for less than 1/5 of the total federal budget and have been historically stable. Yet 90 percent of federal deficit reduction over the last two years has focused on dramatically decreasing NDD spending. While it may seem like low hanging fruit, cutting NDD programs could result in tremendous, long-term unintended economic and social consequences. NDD programs are successful and productive, leveraging significant funding from non- federal sources to help spur economic growth and recovery. For example, every one dollar of CDBG funding traditionally leverages another three dollars in private and public investment. This equates to over one billion dollars being directed into areas hit hard by economic turmoil. These leveraged funds, along with CDBG, are helping to spur the economic investment needed to revitalize the lagging economy. California cities need a fully funded CDBG program now more than ever to revitalize neighborhoods, stimulate economic development, and maintain community facilities and services. Deficit reduction should not shift costs to local governments, because it would harm fragile economic growth and force reductions or elimination of some city services. 83.7 Page 2 of 3 percent of the nation's population resides in metropolitan areas whose basic services would be severely impacted by federal sequestration. While economic growth following the 2008 mortgage foreclosure crisis has been slow, metro areas have been responsible for nearly 88 percent of the recovery in the nation's real GNP and over 83 percent of employment growth to date. Allowing federal sequestration to proceed in its current form would reduce funding for locally-oriented federal programs, shifting costs to state and local governments and stifling national economic growth. The attached resolution (Attachment 1) expresses opposition to the federal funding sequestration and urges President Obama and Congress to create a balanced approach to deficit elimination. If approved, a copy of the executed resolution will be forwarded to federal legislative representatives to demonstrate opposition to the legislation. NOTICING REQUIREMENTS/PUBLIC OUTREACH: Copy of report provided to Jordan &Associates. ATTACHMENTS: 1. Resolution Opposing Further Cuts to Federal Programs that further impact Core Local Government Programs ("Sequestration") Page 3 of 3 RESOLUTION NO. XX - 12 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN * * * * * * * * * * * OPPOSING FURTHER CUTS TO FEDERAL PROGRAMS THAT FURTHER IMPACT CORE LOCAL GOVERNMENT PROGRAMS ("SEQUESTRATION") WHEREAS , last year President Obama and congressional leaders reached an agreement to raise the debt ceiling by $2.1 trillion and reduce spending by the same amount; and, WHEREAS , this agreement was enacted by Congress and signed into law (PL 112-25) by President Obama in August, 2011; and, WHEREAS , PL 112-25 instituted annual caps on non-defense discretionary spending that are designed to reduce the deficit by $935 billion over the next ten years; and, WHEREAS , the $935 billion in cuts to non-defense discretionary spending have already significantly impacted core local government programs such as CDBG, HOME, infrastructure grants and local law enforcement assistance; and, WHEREAS , PL 112-25 also created a 12-member congressional Joint Select Committee on Deficit Reduction (the "Super Committee") that was tasked with reviewing the entire federal budget and finding an additional $1.5 trillion in spending reductions over the next ten years by November 23, 2011; and, WHEREAS , the Super Committee deadlocked; and, WHEREAS , in the event of a Super Committee deadlock, PL 112-95 called for an additional $1.2 trillion in cuts to discretionary spending to be spread over the next nine years beginning in FY 2013, and split evenly between defense ($600 billion) and non-defense ($600 billion) discretionary spending; and, WHEREAS , the additional $1.2 trillion cut is called "sequestration" and is scheduled to be implemented in January, 2013; and, WHEREAS , the spending levels imposed by sequestration would lead to non-defense discretionary spending levels that would cripple or eliminate core local government programs; and, WHEREAS , the spending levels imposed by sequestration would severely impact the Defense Department budget, would lead to declined investment in the local military bases of Camp Parks Reserve Forces Training Area and could lead to another round of base closures and realignments; and, WHEREAS , discretionary spending (defense and non-defense) makes up less than one- third of the federal budget; and, ATTACHMENT 1 WHEREAS , total discretionary spending (defense and non-defense) was less than the budget deficit in FY 2011 and will probably be less than the budget deficit in FY 2012, meaning that the deficit cannot be eliminated solely through discretionary spending cuts; and, WHEREAS , budget experts and economists are calling the combination of expiring tax provisions and sequestration a "fiscal cliff" that needs to be urgently addressed; and, WHEREAS , most non-partisan budget experts and economists agree that eliminating the budget deficit will require a balanced approach that includes reforms to the mandatory spending programs that make up the bulk of the budget, increased revenue and reasonable discretionary spending caps; and, WHEREAS , metro areas have been responsible for nearly 88 percent of the recovery in the nation's real GNP and over 83 percent of employment growth to date; and, WHEREAS , non-defense discretionary programs are successful and productive, leveraging significant funding from non-federal sources to help spur economic recovery; NOW THEREFORE BE IT RESOLVED by the Mayor and City Council of the City of oppose the sequestration; and, BE IT FURTHER RESOLVED that the City of Dublin opposes further cuts to discretionary spending that hurt the mission of or the troops at Camp Parks Reserve Forces Training Area or that further impact core local government programs; and, BE IT FURTHER RESOLVED that the City Council of City of Dublin calls upon President Obama and Congress to avert sequestration and craft a balanced approach to deficit elimination that shares the burden evenly, does not disproportionately harm national economic growth by shifting costs to local governments or harm national defense. PASSED, APPROVED AND ADOPTED this 16th day of October, 2012, by the following vote: AYES : NOES : ABSENT : ABSTAIN : ______________________________ Mayor ATTEST : _________________________________ City Clerk ATTACHMENT 1