Stopgap funding bill won't stop headaches for cities

Jan 24, 2024
By Betsy Montiel, legislative affairs analyst 

Congress managed to reach another short-term budget solution last week and keep the federal government open until February. But the new stopgap funding bill could have significant negative consequences for local governments.  

Federal grant programs that are instrumental for city budgets are facing both delays and cuts as a result of the deal. Funding amounts for grants to local governments will be determined about five months late. Many local governments rely on federal funding to provide services for underserved communities that boost housing and economic development projects.  

Congress has until early March to pass the 12 annual appropriations bills. Congressional leaders did agree to spending levels; however, they have not yet agreed on how to split appropriations for the 2024 fiscal year. Once the federal appropriations bills are passed, the appropriations subcommittees chairs will have to negotiate allocations for agencies, departments, and programs within their jurisdictions.  

Cal Cities’ executive leadership team will head to Washington in mid-March to encourage federal lawmakers to safeguard local revenues and bolster local economic development. 

There’s still no guarantee that Congress will reach an agreement on the 2024 federal budget. Speaker Mike Johnson, who holds a razor-thin majority, faced significant opposition from his own party to the deal. Johnson had to rely on Democrats to avert a federal shutdown — the same situation that led to his predecessor’s ouster.  

If lawmakers can’t agree on a deal in March, they may pass another stopgap measure to avoid a government shutdown, which could trigger automatic 1% cuts to all federal programs. If this happens, domestic programs could face a $41 billion cut. 

California is also facing its own budget deficit, with possible impacts to key homelessness, housing affordability, and transportation programs statewide. Deficits or delays in the federal and state budgets are detrimental not just to local governments, but the underserved residents their programs serve.