2013 sequestration web

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  • 1. Impact of FederalSequestration on City of San Antonio BudgetCity Council BSessionMarch 6, 2013Presented by Maria Villagmez, Budget Director

2. Agenda1. Sequestration Overview2. Effect of Sequestration on City Of San Antonio Impact on Federally-Funded CityGrant Programs Impact on Airport Operations Impact on Build America Bonds (BABs)3. Potential Federal Tax Legislation changes impacting Municipal Bonds 2 3. Sequestration Overview Sequestration is a series of automatic cutsthat reduces the budgets of most federalagencies and programs Budget Control Act of 2011 mandatedsequestration effective January 2, 2013 ifCongress could not reduce federal deficit by$1.2 Trillion over 10 years 3 4. Sequestration Overview January 2, 2013: American Taxpayer Relief Act of 2012 -Congress authorized two-month delay of Sequestrationdeadline March 1, 2013: Sequestrationsigned into law $85 Billion annually inFederal cuts over 10 years4 5. March 1st Sequestration Cuts$85 Billion annually in Federal cuts over 10 years$90.0 $42.5 Billion: Discretionary$80.0Non-Defense Spending$70.0 $ 26.4 Billion in cuts to Domestic Programs through$60.0 which local governments$50.0receive much of their federal$40.0 funding including San Antonio$30.0$20.0$42.5 Billion: Discretionary$10.0 Defense Funding $0.0 51 6. March 1st Sequestration Cuts City of San Antonio could be negativelyimpacted through loss of funding in Federal grants Operational impact to Internationaland Stinson Airports Less Federal subsidy for BuildAmerica Bonds (BABs)6 7. Impact to City of San Antonio Grants City currently receives approximately $150Million in Federal Grants annually Of the $150 Million, 16 grants totaling $140Million could be affected by sequestration Majority of impact would not be realized untilthe Citys FY 2014 Budget City funding could be reduced: $1.7 Million in FY 2013 and $7 to $11 Million in FY 2014 7 8. Impact to City of San Antonio Grants Most discretionary domestic (non-defense)programs would face a 5.1% to 8.2% reduction No available guidance from federal government onwhat specific discretionary programs would bereduced by 5.1% Amounts presented today are projections based onCitys current allocation and known percentagereductions Final amounts determined by Federal and/or StateAgencies and may result in higher or loweramounts 8 9. Impact to City of San Antonio GrantsCity Grant Program SummaryFY 2013FY 2014 EstimatedEstimated($ in Millions)ReductionReductionHuman Services Programs$1.7$5.7 to $8.8Health Services Programs$0 $0.5 to $0.9Neighborhood Services$0 $0.8 to $1.3ProgramsPublic Safety Programs$0 $0.2 to $0.3Total Estimated Reduction$1.7 $7 to $119 10. San Antonio FY 2013 City Budget Impact Human Services Programs $1.7 Million ProjectedKey Program Funding LevelFY 2013FY 2013($ in Millions)BudgetReductionAmountChild Care & Development Block $46.05$1.6GrantCommunity Services Development$1.86$0.1Block Grant (CSBG) 10 11. San Antonio FY 2014 City Budget Impact Human Services Programs - $5.7 to $8.8 MillionKey Program Funding LevelProjected FY 2013 FY 2014 Reduction($ in Millions)BudgetAmountHead Start * $56.89$2.90 to $4.442014 school year begins July 1, 2013Child Care & Development Block $46.05$2.35 to $3.78GrantCommunity Services Development$1.86$0.09 to $0.14Block Grant (CSBG) 11 12. San Antonio FY 2014 City Budget Impact Human Services Programs - $5.7 to $8.8 Million Projected Key Program Funding LevelFY 2013 FY 2014 ($ in Millions)Budget ReductionAmountComprehensive Nutrition & $2.04$0.10 to $0.16Transportation Programs for SeniorsEmergency Solutions Grant (ESG)$1.15$0.06 to $0.09Housing Opportunities for Persons $1.19$0.06 to $0.10with AIDS (HOPWA) 12 13. San Antonio FY 2014 City Budget Impact Health Services Programs - $0.5 to $0.9 MillionProjected Key Program Funding Level FY 2013 FY 2014 ($ in Millions) Budget Reduction Amount Women, Infants and Childrens$6.38$0.33 to $0.52 (WIC) Supplemental Nutrition Health Grants: Immunization Program Healthy Start Initiative $3.98$0.20 to $0.33 TB Prevention & Control STD Program13 14. San Antonio FY 2014 City Budget Impact Neighborhood Services Programs - $0.8 to $1.3Million Projected Key Program Funding LevelFY 2013 FY 2014 ($ in Millions)Budget ReductionAmountCommunity Development$11.56$0.59 to $0.95Block Grant (CDBG)HOME Investment Partnership $3.87$0.20 to $0.32Grant (HOME) 14 15. San Antonio FY 2014 City Budget Impact Public Safety Programs - $0.2 to $0.3 Million Key Program FundingProjectedLevelFY 2013 FY 2014 Budget Reduction ($ in Millions) Amount Homeland Security State and$1.82$0.09 to $0.15 Local Programs Department of Justice$0.48$0.02 to $0.04 Enforcement Grants Public Health Emergency$1.71$0.09 to $0.14 Preparedness15 16. Impact on San Antonio Airports Federal Aviation Administration(FAA) plans to reduce $600 millionthrough September 2013 Cuts could lead to full-time andnighttime closures of trafficcontrol towers and furloughsof FAA staff includingsecurity screeners andcustom officers 16 17. Stinson Municipal Airport Sequestration would cut funding for air traffic controlcontract at Stinson Municipal Airport and require fullutilization of Universal Communication System(UNICOM) Today, air traffic control tower is operated from 7 A.M to10 P.M. daily by federal contract. During non-staffedhours, pilots use UNICOM system to monitor and makeannouncements at airport (i.e. landing on certainrunway) Reduction could potentially be implemented April 1,2013 17 18. Build America Bonds Effective March 1, 2013 subsidy payments toissuers of Build America Bonds would bereduced by 8.7% Potential impact to San Antonio of $166,000 inless federal subsidy in FY 2013 FY 2013 Expected Subsidy before cut: $1.9 Million Sequestration reduction rate applies to currentFY 2013 only18 19. Tax Exempt Status of Municipal Bonds Not part of Sequestration, upcoming deficitreduction and tax reform discussions mayimpact tax exempt status of Municipal BondsInterest Municipal bond interestcurrently exempt from federaltaxation Reduction or elimination of taxexemption caps would result inhigher interest rates andborrowing costs to City19 20. Summary City of San Antonio could be negativelyimpact through Less funding in Federal Grants Operational Impact at International andStinson Airports Less Federal Subsidy for Build AmericaBonds (BABs)20 21. Impact of FederalSequestration on City of San Antonio BudgetPresented by Maria Villagmez, Budget Director City Council B SessionMarch 6, 2013


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