Short of a surprise last-minute deal between the White House and congressional leaders, sequestration will go into effect beginning at midnight Thursday.
Of the total $85 billion in across-the-board cuts, federal dollars going to the states will be reduced by an estimated $5.8 billion. Considering federal dollars account for 34 percent of total state spending, that’s a lot of money.
In reaction to the impending sequestration, on Tuesday NCSL released a statement highlighting two major state concerns:
- As all states except Vermont have balanced budget requirements, the continued fiscal uncertainty from Washington makes the state budgeting process near-impossible. If states don’t know how much money is coming from the federal government, how can they plan their budgets for the next year? This is exacerbated by the fact that most states will be wrapping up their legislative sessions within the next few months. States need certainty, and they need it now.
2. If the federal government is going to cut the funds it gives to states, it has to give states more flexibility. How can states continue to meet the same standards and requirements with less funds? Reducing federal funds without greater flexibility forces states to cut other programs, increase revenue, or some combination of the two. Cutting funds without granting greater flexibility amounts to shifting the federal deficit onto the states.
Since the statement’s release, it has gotten considerable news coverage, including a Reuters article in The Chicago Tribune.
Earlier this week the White House released numbers on how sequestration will impact the country on a state-by-state basis. The Federal Funds Information for the States (FFIS) organization also has state-by-state breakdowns.