Issue Briefs

Congress passed the SUPPORT for Patients and Communities Act (H.R. 6), sending the agreement to the president for signature. The bill covers a wide range of issues, including:

• expanding access to services through Medicare and Medicaid
• improving drug safety
• reducing the availability of opioids
• strengthening law enforcement
• enhancing prevention and treatment efforts

This Issue Brief focuses on grant provisions in the agreement, highlighting new programs, changes to existing ones, and Medicaid reforms. 

America’s Water Infrastructure Act (AWIA) of 2018 (S. 3021) has passed the House and Senate, and now heads to the president for approval. The legislation authorizes new Army Corps of Engineers projects, creates grant programs, modifies the Drinking Water State Revolving Loan Fund (DWSRF), amends provisions of the Clean Water Act (CWA), and reauthorizes Water Infrastructure Finance and Innovation Act (WIFIA) loans. This Issue Brief highlights provisions of interest to states.

The fiscal year ended on September 30, 2018, without an extension or reauthorization of the Agriculture Act of 2014, also known as the farm bill—a recurring package of reauthorizations that govern most of the nation’s agriculture and nutrition policy. The largest and most important farm bill programs will continue to operate based on appropriated funding, but some programs may see a lapse in funding due to the farm bill’s expiration.

This Issue Brief discusses the various ways in which farm bill programs may or may not be affected by the bill’s expiration.

The president has signed P.L. 115-254, a reauthorization of Federal Aviation Administration (FAA) programs, through fiscal year (FY) 2023. The FAA Reauthorization Act of 2018 extends the tax and spending authority of the Airport and Airways Trust Fund and reauthorizes the Airport Improvement Program.

In addition to FAA provisions, the bill includes the Disaster Recovery Reform Act (DRRA) to reform disaster planning and mitigation. It also includes a supplemental disaster appropriation of $1.68 billion.

This Issue Brief highlights provisions of interest to states in P.L. 115-254.

Yesterday, the Bureau of Economic Analysis (BEA) released revised state personal income data for 2017 and prior years. The federal government uses state per capita income to calculate each state’s federal reimbursement rate—the Federal Medical Assistance Percentage (FMAP)—for Medicaid and certain other grant programs. The Children’s Health Insurance Program (CHIP) uses an enhanced FMAP, which is higher than the Medicaid matching rate.

The BEA release facilitates calculation of the final fiscal year (FY) 2020 FMAPs and enhanced FMAPs, which are based on per capita incomes for calendar years (CY) 2015-2017.

This Issue Brief summarizes the BEA data and provides FFIS’s estimates of the final FY 2020 FMAPs and enhanced FMAPs. FFIS estimates that FMAPs will increase in 19 states and decline in 17, ranging from a +3.64 percentage-point increase in Oklahoma to a -1.52 percentage-point decline in Utah. Comprehensive revisions to the BEA personal income data affected results in some states. 

A portion of Land and Water Conservation Fund (LWCF) grants for FY 2018—nearly $62 million originating from the Gulf of Mexico Energy Security Act of 2006 (GOMESA) have been allocated to states. These matching grants assist states in planning, acquiring, and developing outdoor recreation facilities. An additional $100 million has been appropriated from the LWCF for FY 2018 but not yet allocated.

The LWCF is set to expire after September 30, 2018, unless Congress acts to reauthorize it. This Issue Brief provides details on the FY 2018 GOMESA payments and updates FY 2017 LWCF allocations.

UPDATE: Final LWCF allocations for FY 2018 were released on September 18, and are shown in the table accompanying this brief below.

Among the major congressional priorities this year, passing a new farm bill—a recurring package of agriculture and nutrition reauthorizations—is one of the most important items that might still be accomplished before the end of the legislative session. The House and Senate have each passed separate proposals, and have begun negotiations to reconcile their proposals in conference. However, there are significant differences between the two bills.

This Issue Brief compares the House and Senate proposals, focusing on provisions of interest to states.

Earlier this summer, the House Ways and Means Committee approved the Jobs and Opportunity with Benefits and Services (JOBS) for Success Act (H.R. 5861). The bill provides funding for Temporary Assistance for Needy Families (TANF), the mandatory/matching portion of the Child Care and Development Fund (CCDF), and other programs through fiscal year (FY) 2023. It also makes significant changes to TANF, including limiting the use of funds, creating new performance standards, and strengthening work requirements.  

TANF and related programs are set to expire on September 30, 2018. For funding to continue, Congress must act to reauthorize or extend the programs by that date.

The federal law that governs continuing and technical education (CTE) programs, commonly known as “Perkins,” has been reauthorized as the Strengthening Career and Technical Education for the 21^st Century Act (P.L. 115-224). The new law—widely referred to as Perkins V—takes effect on July 1, 2019 (the beginning of a one-year transition period) and extends through June 30, 2025.

It eliminates Title II of the existing program (“Tech Prep”), which has not been funded in recent years, and includes other changes. This brief highlights the new law’s fiscal components.

The Department of the Interior (DOI) announced $552.8 million in payments to counties under the Payments in Lieu of Taxes (PILT) program for fiscal year (FY) 2018. These payments compensate local governments—usually counties—for property tax revenue that would otherwise be collected on non-taxable land owned by the federal government.

The FY 2018 PILT payments are the largest amount ever allocated, and represent a 19% increase compared to FY 2017. This Issue Brief provides background on PILT and details on the FY 2018 payments.

The Centers for Medicare & Medicaid Services (CMS) published a notice in the Federal Register that provides preliminary fiscal year (FY) 2018 disproportionate share hospital (DSH) allotments, and final FY 2016 allotments. (Preliminary FY 2017 allotments were released in November 2017.)

The preliminary FY 2018 DSH allotments are $288 million (2.4%) more than FY 2017. Initially, states had expected to see significant reductions in DSH payments under the Affordable Care Act (ACA) beginning in FY 2014. These cuts have been delayed multiple times, most recently until FY 2020. 

The White House has released Delivering Government Solutions in the 21^st Century, a proposal to reorganize the federal government. Some of its components are narrow in scope and seek to streamline processes, while others call for privatizing, restructuring, eliminating, or merging entire agencies.

This Issue Brief summarizes components of the proposal that would have the biggest impact on states. Table 1 contains a full list of the proposals.

Addressing the opioid crisis is a major item on the congressional agenda. The full House and four Senate committees have approved multiple bipartisan opioid-related bills, with additional action expected in the coming months. The bills cover a wide range of issues, including expanding access to services through Medicare and Medicaid, improving drug safety, strengthening law enforcement, and enhancing prevention and treatment efforts.

This Issue Brief focuses on the grant provisions in the bills, highlighting new programs, changes to existing ones, and Medicaid reforms. Within these areas, there are some similarities between the House and Senate, but many differences remain.  

When Congress enacted the Fixing America’s Surface Transportation (FAST) Act in 2015, it created a new, competitive grant program for major freight projects funded at $4.5 billion over five years, called the Nationally Significant Freight and Highway Projects (NSFHP) program.

The Department of Transportation (DOT) later rebranded the program as the Fostering Advancements in Shipping and Transportation for the Long-term Achievement of National Efficiencies (FASTLANE), for the fiscal year (FY) 2016 round of awards. Then, in July 2017, it rebranded the program again, as the Infrastructure for Rebuilding America (INFRA) program, significantly altering the program’s goals and selection criteria.

DOT recently announced more than $1.5 billion in INFRA grant awards for projects in 23 states, awarding all FY 2018 funding, as well as $710 million from FY 2017. This Issue Brief provides details on INFRA and the recent awards.

The Substance Abuse and Mental Health Services Administration (SAMHSA) released the funding opportunity announcement and allocations for $1 billion in State Opioid Response Grants provided in the fiscal year (FY) 2018 budget. This is in addition to $485 million released in April for Opioid State Targeted Response Grants (Opioid STR).

The funds are awarded by formula, although an application must be submitted by August 13, 2018.

The National Farmworker Jobs Program (NFJP) provides grants to state agencies and community organizations to counter chronic unemployment among migrant and seasonal farmworkers. The Employment and Training Administration (ETA) allocates funds using a regulatory formula based on state shares of eligible participants. On May 23, ETA published a notice in the Federal Register proposing significant changes to the NFJP formula, and announcing estimated allocations for program year (PY) 2018. This Issue Brief provides details on the formula change.

ETA also recently published PY 2018 allocations for other major workforce programs, and revised its NFJP allocations for PY 2017. These funding announcements are reported in this brief as well.

The Department of Housing and Urban Development (HUD) has allocated $267 million from the Housing Trust Fund (HTF) to states, the District of Columbia, and territories for fiscal year (FY) 2018, a 22% increase from FY 2017.

HTF funds are awarded as formula grants to improve the supply of affordable housing for extremely low- and very low-income households. This Issue Brief provides background on the HTF and a list of FY 2018 allocations.

The Federal Emergency Management Agency (FEMA) in the Department of Homeland Security (DHS) has released fiscal year (FY) 2018 funding notices for the following preparedness grant programs:

• Homeland Security Grant Program (HSGP), including:
  • State Homeland Security Grant Program (SHSGP, $402 million)
  • Urban Areas Security Initiative (UASI, $580 million)
  • Operation Stonegarden ($85 million)
• Tribal Homeland Security Grant Program ($10 million)
• Nonprofit Security Grant Program (NSGP, $60 million))
• Intercity Passenger Rail Program (Amtrak, $10 million)
• Intercity Bus Security Grant Program ($2 million)
• Port Security Grant Program ($100 million)
• Transit Security Grant Program ($88 million)
• Emergency Management Performance Grants (EMPG, $350 million)

Funding for these programs totals more than $1.6 billion. State allocations were released for SHSGP and EMPG, and local allocations for UASI. In addition, target allocations were announced for a new $10 million state set-aside within the NSGP.

The omnibus spending bill for fiscal year (FY) 2018 included several titles unrelated to FY 2018 appropriations. Among them was a two-year reauthorization of the Secure Rural Schools (SRS) Act, which provides increased revenue-sharing payments to states from timber sales on federal lands. The reauthorization is retroactive to FY 2017 and expires after FY 2018.

On May 8, the Forest Service announced the payments to states for FY 2017 (paid in FY 2018).

This Issue Brief provides background on SRS reauthorization issues, and compares payments for FY 2017 with those for recent years.

The Department of Justice (DOJ) has released fiscal year (FY) 2018 allocations under the Crime Victims Fund (CVF), which primarily finances two programs: Crime Victims Assistance (CFDA 16.575; $3.2 billion in FY 2018 funding) and Crime Victims Compensation (CFDA 16.576; $129 million in FY 2018 funding).

This Issue Brief describes the programs and their recent funding, and provides state allocations for FY 2018.

The omnibus spending bill for fiscal year (FY) 2018 appropriated $2.525 billion in supplemental funding for federal-aid highways, as part of a bipartisan agreement to provide at least $20 billion in additional infrastructure spending over two years. On April 25, the Federal Highway Administration (FHWA) apportioned $1.98 billion of these funds to states.

This Issue Brief provides details on the supplemental highway appropriation, and compares state apportionments of this funding to apportionments of highway contract authority for the year.

The Department of Health and Human Services (HHS) has released the fiscal year (FY) 2018 allocations under the Child Care and Development Fund (CCDF), which include three funding streams—discretionary, mandatory, and matching. The discretionary portion, the Child Care and Development Block Grant (CCDBG), received an 83% increase in funding in FY 2018.

The House has passed a comprehensive reauthorization of Federal Aviation Administration (FAA) programs, through fiscal year (FY) 2023. The FAA Reauthorization Act of 2018 (H.R. 4) extends tax and spending authority of the Airport and Airways Trust Fund, reauthorizes the Airport Improvement Program (AIP), and reforms aviation policy.

The bill also includes the Disaster Recovery Reform Act (DRRA), which would reform federal disaster programs to improve pre-disaster planning and mitigation.

This Issue Brief highlights provisions of interest to states in H.R. 4.

The Department of Health and Human Services (HHS) has released the final $609 million of fiscal year (FY) 2018 Low Income Home Energy Assistance Program (LIHEAP) block grant funds. States received an initial release of $3 billion last October. While LIHEAP funding increased 7.4% in FY 2018, state allocations varied from -2.7% in Hawaii to +28.7% in five states—Arizona, Florida, Georgia, Nevada, and Texas.

The Substance Abuse and Mental Health Services Administration (SAMHSA) announced the release of $485 million in second-year Opioid State Targeted Response Grants (Opioid STR). A forthcoming funding opportunity announcement will be issued shortly for an additional $1 billion provided in the fiscal year (FY) 2018 omnibus appropriations.

Funding for Opioid STR is authorized for two years (through FY 2018). However, legislation is being considered to reauthorize the program through FY 2021.

The Centers for Medicare & Medicaid Services (CMS) announced the parameters that will guide calendar year (CY) 2019 individual and state costs for the Medicare Part D drug benefit. CMS projects a 3.96% increase in per capita Part D expenditures. After accounting for prior-year downward revisions, the annual percentage increase is 1.94%. Based on the release, FFIS estimates that CY 2019 clawbacks will cost states $11.7 billion, a 1.7% ($194 million) increase from CY 2018.  

A grant program that was created in response to the contentious presidential election of 2000—and concerns that state election systems were badly in need of updating—has been resurrected in the wake of new concerns about potential foreign intervention in U.S. elections. Specifically, the recently signed omnibus appropriations act for fiscal year (FY) 2018 (P.L. 115-141) provided $380 million for Election Security Funds, as authorized by the Help America Vote Act of 2002 (HAVA; P.L. 107-252). This brief summarizes the election assistance program and lists state awards.

On March 22, the Bureau of Economic Analysis (BEA) released preliminary state personal income and per capita data for 2017. The federal government uses state per capita income to calculate each state’s federal reimbursement rate—the Federal Medical Assistance Percentage (FMAP)—for Medicaid and certain other grant programs. The Children’s Health Insurance Program (CHIP) uses an enhanced FMAP, which is higher than the Medicaid matching rate.

The BEA release facilitates projections of fiscal year (FY) 2020 FMAPs and enhanced FMAPs, which are based on per capita incomes for calendar years (CY) 2015-2017. FFIS estimates that FMAPs will increase in 16 states and decline in 20 states. However, these projections are based on preliminary data, and subsequent adjustments can have a large impact on final FMAPs. 

On March 9, the Department of Transportation (DOT) awarded nearly $500 million in competitive grants to state departments of transportation, local governments, and other organizations under the Transportation Investment Generating Economic Recovery (TIGER) program for fiscal year (FY) 2017. DOT has awarded more than $5 billion in TIGER grants since the program’s creation in 2009, but the program has been targeted for elimination, both in the president’s budget request and in an omnibus spending package passed by the House last year.

This Issue Brief provides background on TIGER grants and details on the latest awards.

Yesterday, the House passed the Students, Teachers, and Officers Preventing (STOP) School Violence Act (H.R. 4909). The bill amends and reauthorizes the Secure Our Schools (SOS) grant program, which has not received funding since fiscal year (FY) 2011. A companion bill was introduced in the Senate last week.

This Issue Brief describes proposed House and Senate amendments to the SOS program.

As part of the Tax Cuts and Jobs Act (P.L. 115-97), enacted on December 22, 2017, Congress created a new program to incentivize long-term private investment in low-income communities (LICs). Under the Opportunity Zones program, investors receive tax incentives for qualifying investments in low-income census tracts nominated for inclusion in the program by governors.

This Issue Brief describes the Opportunity Zones program and how states can nominate Qualified Opportunity Zones (QOZs) before the March 21 deadline.

On February 24, the Department of the Interior awarded $300.7 million in mandatory fiscal year (FY) 2018 Abandoned Mine Land (AML) reclamation grants to 25 states and three tribes, an increase of nearly $120 million compared to last year. AML funding helps states eliminate dangerous conditions and pollution caused by abandoned coal mines.

This Issue Brief provides background on AML grants and a breakdown of recent funding distributions.

On February 12, 2018, the White House released its long-awaited infrastructure proposal, entitled a Legislative Outline for Rebuilding Infrastructure in America. The document is a policy proposal only, and contains no legislative text or executive actions. However, infrastructure reform is expected to be a priority for Congress in the coming year, and the administration’s proposal may serve as a framework. The proposal also recommends changes to major workforce and training programs.

This Issue Brief summarizes the proposal, focusing on new grant programs, new sources of federal funding, and other provisions of interest to states.

On January 18, 2018, the Environmental Protection Agency (EPA) published a final rule establishing four new Superfund sites on the National Priorities List (NPL), as well as a proposed rule identifying 10 additional sites. The EPA also updated its Superfund Redevelopment List, which highlights 31 Superfund sites from the NPL with the highest commercial and redevelopment potential. The EPA has suggested there will be refocused effort on cleaning up Superfund sites throughout the country.

This Issue Brief describes the Superfund program and the separate-but-related Brownfields state grant programs.

In fiscal year (FY) 2010, the federal government began phasing out the income-eligibility requirements for IV-E Adoption Assistance. As a result, more children have become eligible for the federal program—which is paid for by federal and state funds—rather than state-funded programs. States are required to spend any savings from this federal expansion on child welfare services. The Administration for Children and Families (ACF) released details on the FY 2016 adoption savings, which totaled $110 million.

The eligibility expansion was fully implemented at the beginning of FY 2018. However, the Bipartisan Budget Act (BBA) of 2018 (P.L. 115-123) delayed the full expansion until July 1, 2024, as an offset to child welfare financing reforms in the agreement. 

On January 22, Politico published a leaked document outlining the administration’s plan to spur investment in the nation’s infrastructure. While the document is unofficial, it provides a relatively detailed preview of a major infrastructure plan the administration is expected to announce on or about January 30.

This Issue Brief summarizes its provisions.

Funding to address the opioid epidemic totaled more than $1.1 billion in fiscal year (FY) 2017. The grants are administered by the departments of Health and Human Services (HHS) and Justice (DOJ). This Issue Brief provides an overview of the programs and funds awarded to date. 

This report is accompanied by a spreadsheet (available on our website to FFIS database subscribers) that provides HHS and DOJ awards by state for FY 2016 and FY 2017.

Under provisions of the Mineral Leasing Act (MLA), states receive a share of revenues from the production of mineral resources on federal lands. On November 30, the Department of Interior (DOI) announced $1.44 billion in fiscal year (FY) 2017 payments to states, an 8.4% increase from the prior year.

On December 20, the U.S. Census Bureau released state resident population estimates for July 2017 and revised data for prior years. The new data identify population shifts and affect certain formulas.

The U.S. population continues to grow at a historically slow rate, with an increase of 0.72% in 2017. Idaho was the fastest-growing state, at 2.2%. Eight states and Puerto Rico registered population declines.

This Issue Brief summarizes the new population estimates and calculates their effect on calendar year (CY) 2018 tax-exempt private activity bond limitations and fiscal year (FY) 2019 Social Services Block Grant (SSBG) allocations.

The Affordable Care Act (ACA) created an annual fee on certain health insurance providers, referred to as the health insurer tax. Congress suspended the tax for calendar year (CY) 2017. Under current law, it will be reinstated on January 1, 2018. Because Medicaid managed-care rates must factor in the tax, Medicaid costs associated with it are estimated to increase $4.8 billion in 2018. 

The Every Student Succeeds Act (ESSA, P.L. 114-95) was enacted in late 2015, as the first comprehensive reauthorization of the Elementary and Secondary Education Act (ESEA) since 2001.

Fiscal year (FY) 2017 is the first to appropriate funding using ESSA funding authorizations. However, appropriators are not bound to adhere to these authorizations, and ultimately deviated from them in many ways—declining to fund some new programs, and appropriating differing amounts for many others.

This Issue Brief compares FY 2017 appropriations for ESEA programs against their authorized funding levels in ESSA, as well as against appropriations for FY 2016, the last year before ESSA’s authorizations took effect.

On November 3, the Centers for Medicare & Medicaid Services (CMS) published a notice in the Federal Register that provides preliminary fiscal year (FY) 2017 disproportionate share hospital (DSH) allotments, and final FY 2015 allotments. (Preliminary FY 2016 allotments were released October 2016.)

Overall, the preliminary FY 2017 DSH allotments are $107 million (0.9%) more than FY 2016. Initially, states expected to see significant reductions in DSH payments under the Affordable Care Act (ACA) beginning in FY 2014. These cuts have been delayed multiple times, most recently until FY 2018. The House recently passed legislation to eliminate the reductions in FY 2018 and FY 2019, but the Senate has yet to act.

On November 3, the House passed the CHAMPIONING HEALTHY KIDS Act (H.R. 3922), which combined and slightly modified two committee-passed bills to extend funding for the Children’s Health Insurance Program (CHIP) and other programs in the Department of Health and Human Services (HHS) that expired September 30.

Because of offsets affecting Medicare, Medicaid, and the Prevention and Public Health Fund (PPHF), the legislation did not receive broad bipartisan support. The full Senate has yet to consider its CHIP bill (KIDS Act, S. 1827), and has not taken action to extend funding for other HHS programs.

The president directed the acting secretary of the Department of Health and Human Services (HHS) to declare the opioid crisis a public health emergency, under section 319 of the Public Health Service Act. This Issue Brief discusses implications for funding and flexibility, as well as actions the administration plans to take.

On October 18, the president signed into law the Early Hearing Detection and Intervention Act of 2017 (P.L. 115-71), which reauthorizes the Universal Newborn Hearing Screening (UNHS) program through fiscal year (FY) 2022, and expands the program to include young children. It also reauthorizes funding for the Centers for Disease Control and Prevention (CDC), to make grants and provide technical assistance to states to support screening and surveillance activities.

This Issue Brief provides a summary of the law.

The Centers for Medicare & Medicaid Services (CMS) recently notified states of next year’s clawback charges—the cost-sharing payments to the federal government for the Medicare Part D prescription drug program. The CMS release indicates that the per-beneficiary monthly clawback charge to states will increase by 1.22% in calendar year (CY) 2018—the same increase announced earlier this year because no additional adjustments were required.

This modest growth follows two years of double-digit increases, and is likely due to slowing use of expensive specialty drugs (such as those for Hepatitis C). Based on this increase, FFIS estimates that state payments will total $11.3 billion in CY 2018, an $87 million (0.8%) increase from CY 2017.  

On October 20, the Department of Health and Human Services (HHS) released $3 billion in fiscal year (FY) 2018 Low Income Home Energy Assistance Program (LIHEAP) block grant funds under the continuing resolution (CR). These initial awards represent approximately 90% of LIHEAP’s annualized funding under the CR.

Mandatory funding for the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program expired September 30. On September 26, the House passed the Increasing Opportunity and Success for Children and Parents through Evidence-Based Home Visiting Act (H.R. 2824) to extend funding through fiscal year (FY) 2022. The legislation makes a number of changes to the program, including a new state matching requirement. The Senate has not yet considered legislation, although a bill has been introduced and referred to the Senate Finance Committee.

Funding for the Children’s Health Insurance Program (CHIP) expired September 30. On October 4, the Senate Finance Committee approved the Keep Kids’ Insurance Dependable and Secure Act (KIDS Act, S. 1827). The House Energy and Commerce Committee also approved its bill—the Helping Ensure Access for Little Ones, Toddlers, and Hopeful Youth by Keeping Insurance Delivery Stable Act (HEALTHY KIDS Act, H.R. 3921).

Both bills would extend funding for CHIP and related programs through fiscal year (FY) 2022, and maintain the Affordable Care Act’s (ACA) 23-percentage-point increase in the enhanced federal matching rate through FY 2019. However, the House bill incorporates provisions not in the Senate bill, including offsets, eliminating Medicaid Disproportionate Share Hospital (DSH) cuts for FY 2018 (but extending the cuts for two years), and providing Medicaid funding for Puerto Rico and the Virgin Islands.

The full House was expected to consider its bill last week, but action has been delayed due to bipartisan negotiations around offsets. In the meantime, the administration announced that it is distributing $230 million in unspent prior-year funds to five states and four territories expected to run out of funding for CHIP shortly.

On October 2, 2017, the federal government formally established two  environmental mitigation trusts that will distribute more than $2.9 billion to states and tribes over the coming years based on a settlement with Volkswagen (VW) over Clean Air Act violations. The formal establishment of the trust begins a 60-day period during which states must elect to become beneficiaries, so they can receive compensation funding.

This brief describes how states can apply, eligible activities, and other information related to the trusts.

On July 27, the House Energy and Commerce Committee advanced the Drinking Water Systems Improvement Act (H.R 3387), which invests in the modernization of water infrastructure, seeks to improve systems to ensure compliance with drinking water quality standards, and authorizes or reauthorizes a number of grant programs. A date has not been set for consideration by the full House, but the bill has bipartisan support.

This brief describes major provisions of the House bill.  

The Senate agriculture committee recently held a hearing on error rates in the Supplemental Nutrition Assistance Program (SNAP), focusing on problems in the review process that led to inaccurate reporting of payment accuracy rates. Performance bonuses for FY 2016 have been suspended as a result—a potential loss to states of -$48 million—and several states are under investigation by the Department of Justice.

The Bureau of Economic Analysis (BEA) has released state personal income data that facilitate calculation of the final fiscal year (FY) 2019 reimbursement rate for Medicaid and certain other grant programs—the Federal Medical Assistance Percentage (FMAP). The Children’s Health Insurance Program (CHIP) uses an enhanced FMAP, which is higher than the Medicaid matching rate.

This Issue Brief summarizes the BEA data and provides FFIS’s estimates of the final FY 2019 FMAPs and enhanced FMAPs. 

The Senate has passed S. 860, the Juvenile Justice and Delinquency Prevention Reauthorization Act of 2017. The bill would reauthorize and amend federal juvenile justice programs for five years. This Issue Brief compares it to the current House proposal, highlighting provisions of interest to states.

Funding for the Children’s Health Insurance Program (CHIP) is set to expire September 30. This week, the Senate Finance Committee introduced bipartisan legislation—Keep Kids’ Insurance Dependable and Secure Act (KIDS Act, S. 1927)—to extend funding for five years. The bill maintains the Affordable Care Act’s (ACA) 23-percentage-point increase in the enhanced federal matching rate through fiscal year (FY) 2019. 

On June 23, the Department of Housing and Urban Development (HUD) allocated $219 million from the Housing Trust Fund (HTF), to improve the supply of affordable housing for extremely low- and very low-income households. This Issue Brief provides background on the HTF and a breakdown of fiscal year (FY) 2017 funding allocations by state.

On July 20, the House passed the Department of Homeland Security Authorization Act of 2017 (H.R. 2825). If enacted, the bipartisan bill would be the first reauthorization of the Department of Homeland Security since its establishment in 2002.

The Affordable Care (ACA) reduced Medicaid Disproportionate Share Hospital (DSH) allotments on the assumption that there would be fewer uninsured people and less uncompensated care with the expansion of health care coverage. These cuts—initially scheduled to begin in fiscal year (FY) 2014—have been delayed repeatedly but are effective in FY 2018. On July 28, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule that outlines the methodology for implementing the annual reductions, which total $2 billion in FY 2018. 

On July 25, the Department of Justice (DOJ) released its fiscal year (FY) 2017 state solicitation for the Edward Byrne Memorial Justice Assistance Grant Program (JAG). The announcement included state allocations.

As the largest and most flexible grant in the DOJ arsenal, JAG has become the go-to grant for attaching requirements and sanctions related to federal criminal justice legislation. Accordingly, states will now need to certify compliance with federal immigration notification requirements to receive FY 2017 JAG funds. This Issue Brief describes the new requirement and provides the FY 2017 state allocations.

Under current law, there are no appropriations for new Children’s Health Insurance Program (CHIP) allotments after fiscal year (FY) 2017. Absent congressional action, most states will exhaust existing federal funds during the first half of FY 2018. Moreover, state coverage requirements and fiscal impacts will vary based on the type of program a state operates.

This Issue Brief discusses the current financing of CHIP, implications of expiring funding, and recent proposals. 

On June 26, 2017, the Department of the Interior (DOI) announced $464.6 million in payments to counties under the Payments in Lieu of Taxes (PILT) program for fiscal year (FY) 2017. These payments compensate local governments—usually counties—for property tax revenue that would otherwise be collected on non-taxable land owned by the federal government.

The FY 2017 PILT payments are the largest amount ever allocated, and represent a 2.9% increase over FY 2016. This Issue Brief provides background on PILT and details on the FY 2017 payments.

The Consolidated Appropriations Act of 2017 (P.L. 115-31) extended Temporary Assistance for Needy Families (TANF) through fiscal year (FY) 2018. However, it included a new set-aside, which reduces state block grant allotments by $55 million annually in FY 2017 and FY 2018.

In addition, Congress and the president have proposed changes to TANF. The House recently passed legislation to create a subsidized employment demonstration program for TANF recipients and transfer $100 million from the TANF contingency fund to pay for it. The president’s FY 2018 budget proposed to eliminate the TANF contingency fund altogether, and reduce the TANF block grant by -10%.  

On June 13, the Department of Health and Human Services (HHS) released the remaining $378 million in fiscal year (FY) 2017 Low Income Home Energy Assistance Program (LIHEAP) block grant funds. States received an initial release of $3 billion in October 2016. Although LIHEAP was level-funded in FY 2017, some states saw significant funding changes. 

On June 2, the Federal Emergency Management Agency (FEMA) in the Department of Homeland Security (DHS) released fiscal year (FY) 2017 funding notices for the following preparedness grant programs:

• Homeland Security Grant Program (HSGP), including:

  • State Homeland Security Grant Program (SHSGP)

  • Urban Areas Security Initiative (UASI)

  • Operation Stonegarden

• Tribal Homeland Security Grant Program (THSGP)

• Nonprofit Security Grant Program

• Intercity Passenger Rail Program (Amtrak)

• Intercity Bus Security Grant Program (IBSGP)

• Port Security Grant Program (PSGP)

• Transit Security Grant Program (TSGP)

• Emergency Management Performance Grants (EMPG)

Funding for the programs listed above totals approximately $1.6 billion, and is a slight increase from FY 2016. Fifty-state allocations were released for two programs (SHSGP and EMPG), and local allocations were released for UASI.

On May 31, the Federal Transit Administration (FTA) awarded $197 million in Positive Train Control (PTC) implementation grants to transportation departments and other agencies in 13 states. The grants are provided from the Highway Trust Fund (HTF), under a one-time authorization in the Fixing America’s Surface Transportation (FAST) Act. This Issue Brief provides background on PTC funding and a summary of the recent awards.

On April 6, the Federal Highway Administration (FHWA) released $670 million in FHWA Emergency Relief (ER) funds to 40 states. This is in addition to $34 million already released this year.

The ER program supports repair work on federal-aid highways damaged by disasters. This Issue Brief provides a summary of the ER program, and state-level funding since fiscal year (FY) 2012.

The Centers for Medicare & Medicaid Services (CMS) announced the parameters that will guide calendar year (CY) 2018 individual and state costs for the Medicare Part D drug benefit. CMS projects a 3.94% increase in per capita Part D expenditures. After accounting for prior-year downward revisions, the annual percentage increase is 1.22%. This modest growth rate follows two years of double-digit increases, and is likely due to the slowing use of expensive specialty drugs (such as those for Hepatitis C).  

The release of the annual percentage increase, enrollment data for persons dually eligible for Medicare and Medicaid, and FFIS projections of Federal Medical Assistance Percentages (FMAPs) for fiscal year (FY) 2019, allow for preliminary estimates of state clawback costs for CY 2018. Based on the projections, CY 2018 clawbacks are estimated to cost states $11.3 billion, a 0.8% ($89 million) increase from CY 2017. 

During the House debate around repealing and replacing the Affordable Care Act (ACA), a provision was added allowing states to participate in an optional block grant for certain Medicaid participants. While the bill was pulled from the House floor, converting all or part of Medicaid into a block grant is not a new idea. Medicaid and other major open-ended mandatory programs, including the Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI), and child nutrition programs, have all been recommended for conversion into block grants in recent years.

This Issue Brief provides context for these and other proposals by examining block grants as a subdivision of federal grant funding. It also highlights recent proposals affecting block grants.

On March 28, the Bureau of Economic Analysis (BEA) released preliminary state personal income and per capita income data for 2016. The federal government uses state per capita income to calculate each state’s reimbursement rate—the Federal Medical Assistance Percentage (FMAP)—for Medicaid and other grant programs. The Children’s Health Insurance Program (CHIP) uses an enhanced FMAP, which is higher than the Medicaid matching rate.

The BEA release facilitates projections of fiscal year (FY) 2019 FMAPs and enhanced FMAPs, which are based on per capita incomes for calendar years 2014-2016. FFIS estimates that FMAPs will increase in 25 states and decline in 11 states. However, these projections are based on preliminary data, and subsequent adjustments can have a large impact on final FMAPs.    

Last week, the House Energy and Commerce Committee and the Ways and Means Committee approved their legislative proposals for repealing and replacing the Affordable Care Act (ACA) through reconciliation. The bill, entitled the American Health Care Act, makes many changes to the ACA—focusing on insurance affordability, individual and employer mandates, and taxes. It also significantly alters federal financing of Medicaid.  

In January, the Federal Emergency Management Agency (FEMA) published a supplemental advance notice of proposed rulemaking (SANPRM) elaborating on the concept of an annual “disaster deductible,” which states would be required to satisfy before receiving certain forms of federal disaster assistance. The SANPRM builds on an earlier proposal (ANPRM) that was released in January 2016. It provides greater detail on the disaster deductible concept, but still does not constitute a formal proposal. 

Last year, the Congressional Budget Office (CBO) conducted a review of its activities under the Unfunded Mandates Reform Act (UMRA). This Issue Brief reports CBO’s findings, summarizes major provisions of UMRA, and examines two Government Accountability Office (GAO) reports on potential improvements to UMRA. 

The Affordable Care Act (ACA) included many new grants and funding streams. It also reauthorized and provided funding for a number of existing programs. In general, the grants fall into one of the following categories:

• No longer funded—These programs received an appropriation in the ACA, but the funding period has ended or the funds have been exhausted (e.g., Premium Review Grants and Health Insurance Exchange Planning Grants).

• Subsequently extended—These programs received an appropriation in the ACA, and Congress extended the funding in subsequent legislation (e.g., Maternal, Infant, and Early Childhood Home Visiting, and Health Profession Opportunity Grants).

• Funded from permanent ACA appropriations—These programs received funding from ongoing ACA funding streams, with the two major ones being the Prevention and Public Health Fund (PPHF) and the Center for Medicare and Medicaid Innovation (the Innovation Center).  

ACA also made major reforms to Medicaid that were accompanied by increases in federal funding, including the eligibility expansion for adults, and other eligibility and benefit enhancements.

This Issue Brief takes an in-depth look at the funding provided by the ACA, and provides state allocations for many ACA programs.     

In the first month of the 115^th Congress, the House passed five bills to reform the executive branch regulatory and rulemaking process, one of which has since become law. At the same time, the new administration has issued numerous executive orders and memoranda, two of which have implications for regulation and rulemaking. This Issue Brief summarizes these legislative and executive actions.

Update: A memorandum containing implementation guidance on the executive order entitled "Reducing Regulation and Controlling Regulatory Costs" was issued on February 2.

The president released an executive order on January 25, entitled, Enhancing Public Safety in the Interior of the United States. The order directs executive departments and agencies “to employ all lawful means to enforce the immigration laws of the United States.” The order includes some provisions that could affect state and local governments, such as:

• sanctions against jurisdictions that fail to comply with federal immigration laws

• the hiring of 10,000 additional immigration officers

• authorizing state and local law enforcement officials to perform the functions of immigration officers

• regular reports on incarcerated aliens

This Issue Brief focuses on issues raised by certain provisions of the order.

On January 6, the Department of the Interior awarded nearly $181 million in fiscal year (FY) 2017 Abandoned Mine Land (AML) reclamation grants to 25 states and three tribes. AML funding helps states eliminate dangerous conditions and pollution caused by abandoned coal mines.

This Issue Brief provides background on AML grants and a breakdown of recent funding distributions.

On January 10, the Environmental Protection Agency (EPA) announced the availability of $1 billion in loans for the Water Infrastructure Finance and Innovation Act (WIFIA), financed by a $20 million appropriation in the fiscal year (FY) 2017 continuing resolution (CR). WIFIA is a credit assistance program providing direct loans and loan guarantees to states and other entities for water infrastructure projects. This Issue Brief provides a summary of the WIFIA program and the application process for the new funds.

On December 16, the president signed the Water Infrastructure Improvements for the Nation (WIIN) Act (P.L. 114-322). The legislation authorizes new Army Corps of Engineers projects, amends programs related to water infrastructure, creates new grant programs, and authorizes emergency assistance to communities facing drinking water contamination. This Issue Brief highlights provisions of particular interest to states.

Last month, the president signed the Justice for All Reauthorization Act of 2016 (P.L. 114-324). The bill amends several laws, programs, and provisions, as follows:

• It amends the Justice for All Act of 2004, the Victims of Crime Act of 1984, the DNA Sexual Assault Justice Act of 2004, and the Innocence Protection Act of 2004, to reauthorize several grants; gives preference to some grant applicants; and directs the National Institute of Justice to establish best practices for evidence retention.
• It also specifies that certain funds be allocated for testing and auditing backlogged rape kits; amends the Prison Rape Elimination Act of 2003 (PREA); and requires applications for Byrne Justice Assistance Grant Program (JAG) funds to include a strategic plan to improve administration of criminal justice.

This Issue Brief focuses on the provisions that affect state grant programs.