NC Budget and Tax Center

New report: Trump budget will put federal grants to NC and its local governments at risk

The Center on Budget & Policy Priorities (CBPP) has released a timely report titled “At Risk: Federal Grants to State and Local Governments”. The two major conclusions of the report are blunt: Federal grants matter to state and local budgets (accounting for approximately 30 percent of North Carolina’s state budget), and programs for low and moderate income families could bear the brunt of cuts based on proposals from President Trump and congressional Republicans.

This report comes out a few days before the White House is expected to release an outline of its 2018 fiscal year “skinny budget” on Thursday, March 16.

Here are three key points (and charts) from CBPP’s latest report that highlights some basic facts on federal grants and that North Carolinians should know:

  • Grants are at risk, and states cannot absorb the magnitude of the
    potential cuts without reducing services:
    The President’s forthcoming budget is reported to cut non-defense discretionary spending — the source of state and local discretionary grants — by $54 billion.” “In all likelihood, states and localities will be forced to scale back or eliminate services and programs for families, seniors, and people with disabilities, rather than raise their own funds to continue the programs at their current level.”
  • Grants are already at historically low levels: Discretionary (annually appropriated) grants to state and local governments in federal fiscal year 2015 were 1.05 percent of GDP, lower than in all but one year since 1980.”

  • Federal grants are vital to help finance critical programs and services on which low and moderate-income families and communities of every state rely on. Among the programs these discretionary grants support are:
    • Highways, airports, and mass transit
    • High poverty schools
    • Head Start
    • Community health centers
    • Training and employment services
    • Child protective services
    • Low-income home energy assistance
    • Child care

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