CARH'S BROADCAST EMAIL - Legislative Update
CARH’S BROADCAST EMAIL – Legislative Update
May 9, 2018
Proposed Administration Rescission Package Takes $40 Million from Rural Development Rental Assistance
Yesterday, May 8, 2018, the Trump Administration released its $15 billion Proposed Rescission of Budgetary Resources, which includes taking back $40 million of Rural Development’s (RD) Section 521 Rental Assistance (RA) that was appropriated for Fiscal Year (FY) 2018. We are working hard to oppose the inclusion of this RA rescission and we urge you to contact your members of Congress as soon as possible and ask that RA be removed from the Rescission package.
Rescission is the term for the process of pulling back funds after the Congress has voted to appropriate funds and the president has signed the appropriations into law. The Congressional Budget and Impoundment Control Act of 1974 was passed into law to address certain rescission practices under President Nixon and has been used sporadically since then. Periodically, there are rescission packages that are program specific and relatively small in scope, basically as a way of adjusting program balances. Only on rare occasions have there been broad-based rescission packages such as the current proposal.
FY 2018 funding levels were set in the Consolidated Appropriations Act, as we noted in our March 23, 2018, Broadcast Email. Under the Consolidated Appropriations Act, the Section 521 RA program was funded at a level of $1.345 billion. As we discussed in that Broadcast Email, this was a reduction in funding from the FY 2017 level of $1.405 billion, but $40 million of FY 2017 monies were carried over into FY 2018 to fund contracts that were to be renewed during the early months of the new fiscal year. This carryover practice was to continue in FY 2018, with the ability of the agency to carryover $40 million. However, now it appears that the Administration would eliminate this $40 million carryover.
This carryover process was used to offset some of the problems that occurred from funding shortages and timing misalignments in FY 2015 to FY 2016. As CARH members will recall, the Federal Government ran short of Section 521 RA funding in FY2015 and FY2016. This problem arose and grew to a more than $200 million problem for two reasons: first, there were shortcomings in the RD forecasting tool; and second, the failure to have enough funding when needed. The first issue has been addressed and seems to be resolved with a new RD forecasting process. The second issue was addressed through a one-time appropriation increase and the ability to clearly carryover enough funds, determined by USDA to be $40 million, to renew RA contracts expiring in the first quarter of the following fiscal year. Without this carryover there is every reason to expect this funding and timing gap will re-emerge in September/October at the end of FY 2018 and start of FY 2019.
It is important that CARH members contact your members of Congress and ask them to oppose the recession of RA funds. It is even more if you have contracts that are renewed at the beginning of the new fiscal year. It’s important to tell your Congressional member about the impact on residents who live in your properties, as well as your businesses. While in the short-term the crisis that occurred in previous years has not re-occurred as a wide spread problem, this rescission would remove part of the solution put in place in FY 2016. If your members of Congress serve on either the House or Senate Appropriations Committees it is vital that you contact them and ask them to oppose the recession.
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