Showing posts with label sequester. Show all posts
Showing posts with label sequester. Show all posts

Monday, September 9, 2013

The Week Ahead



Last week, we posted a blog item about the state allocating $9 million from the reserve fund to back-fill federal sequester cuts for head start, senior citizen services, and other programs. We also covered the disappointing national stats on jobs and unemployment.

And we said goodbye to our Director, Neil Bergsman, who has moved over to the Capital Budgeting Office in DBM.



For the week of September 9-15:

Tuesday, September 10th

Thursday, September 12th

Wednesday, September 4, 2013

Maryland Allocates Funds to offset Federal Cuts

Maryland Governor Martin O'Malley announced the allocation of $8.8 million in reserve funds to offset federal budget cuts. This action commits nearly $9 million of the $100 million set aside during the 2013 legislative session to offset the results of federal budget actions.

The Governor's statement says:
Nearly 500 low-income children will be able to participate in Head Start programs that will prepare them to enter school ready to learn ($4.1 million). Approximately 3,000 individuals will receive the substance abuse prevention and treatment services they need ($1.6 million). Approximately 3,000 older adults will receive 180,000 meals, 2,500 seniors will have access to health screenings, and 200 seniors will be provided with home and community-based services, including personal care and adult day care. ($1.4 million). Fifty individuals in need of vocational rehabilitation services will receive those services without delay ($800,000). Approximately 7,000 people will receive job placement and training assistance ($500,000). Seventy-five adult education classes serving about 800 students will be offered as planned ($400,000).
Congress will confront another set of deadlines shortly as the federal fiscal year ends without an approved budget one September 30, and the Treasury runs out of authority to issue new debt in mid-October.

The continued federal budget impasse harms Maryland in two ways. First, the direct budget cuts affect services currently received by Marylanders. Secondly, the reduced federal activity in paying salaries and in buying goods and services hurts Maryland's economy.

These temporary back-fills from state funds are helpful in reducing the hardships to families and individuals that would occur if the federal cuts took their full effect. In the long run, however, Congress must do its job of approving a regular budget for the nation on a timely basis.

Tuesday, August 20, 2013

Maryland Employment Numbers for July were Disappointing




The state employment statistics for July were all disappointing. Employment of Maryland residents (seasonally adjusted) was down 15,000 from June – the third consecutive decline. (That's the number of employed Maryland residents. The number of jobs located in Maryland also went down: by 9,200).

The number of unemployed Marylanders went up by 3000, reaching its highest level since October of 2011.

Maryland’s unemployment rate went up to 7.1 percent from 7.0 in June. It has been edging up since reaching  6.5 percent back in April of this year. Prior to the Great Recession, Maryland’s unemployment rate was below 3.5 percent. Maryland's unemployment rate is now approaching the national rate of 7.4 percent.

Economists are attributing the bad news to the automatic federal budget cuts known as “the sequester,” at least in part.

The state Department of Labor, Licensing and Regulation's analysis finds the glass half full, by pointing out the gains in private sector jobs since the start of the year, and by noting that the unemployment rate for June was not revised downwards.


Tuesday, June 11, 2013

Graduation, Education, and Sequestration

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With all of the June graduations around Maryland, it's a good time to think about our investments in children and their education.

The American Prospect recently issued a special report that examines the effects of the economic downturn and America’s budgetary reactions on the nation’s youth. In its first article, “The Children of the Great Collapse,” Jared Bernstein looks primarily at the national effects of sequestration on low-income children and families, with additional commentary about how further cuts in Paul Ryan’s budget proposal could make matters worse. Bernstein explains that while the helpful stimulus of the Recovery Act prevented millions of children from slipping into poverty during the height of the Great Recession, now that the apparent crisis period is over and this aid to individuals and states has long been spent, working-class Americans may actually suffer worse now in the period of “economic recovery,” as wages and opportunities stagnate.

The emerging effects of sequestration and other Congressional budget fights push attainment of the American Dream farther away for low-income citizens by reducing the possibilities that come from a robust education system. Funds for public schooling have declined for the very beginning of a poor child's education up through the college levelThe sequester’s automatic spending reductions cut roughly five percent of federal funding for Head Start. That may not sound severe, but the National Education Association estimates this will reduce access to public preschool programs for roughly 50,000 American children. Over 13,000 Maryland children took part in the program last year, and in most counties, over 90 percent of children eligible for the program were enrolled. This blind budget cutting will reduce access to early education for low-income families and will leave many children unprepared to start their education.

Local K-12 education also feels the pain of these budgetary contractions since, as Bernstein points out, federal aid to local schools makes up over eight percent of the sequestered federal dollars. Much of this money would have targeted schools in low-income communities. As for higher education funding for low-income young adults, if the Ryan Budget became law, funding for the Pell Grants that help millions of college students afford higher education would be frozen at current levels, while tuition around the country rises.

All this comes as Maryland has made progress in educational achievement among its low-income students, according to Education Sector, a nonprofit, nonpartisan think tank on education policy. The organization’s recent special report studied students’ scores on the National Assessment of Educational Progress tests between 1995 and 2009. It shows that Maryland has made more progress than any other state in improving achievement in reading and math scores of free-and-reduced-price-lunch eligible fourth and eighth grade students. The state raised scores of its economically disadvantaged students on average by more than 50 points. That is nearly twice the national average for improvement. It indicates that these Maryland students have attained an increase in nearly two additional years of learning. 

Cuts to school aid risk derailing the state’s trajectory in this area.

Sequester supporters in Washington argue that this austerity move helps reduce “government waste” and will result in a leaner, more efficient government. Local critics of government stewardship of public funds point to Baltimore City’s school system, which has been in the news recently after a federal audit uncovered some extravagant and unnecessary spending. 

Of course, in both good and bad economic climates, school system officials need to use the public dollars they are allocated wisely and responsibly. And of course when they do not, they must be held accountable. However, despite these sensational findings, evidence shows that our public school dollars are improving teaching and learning in classrooms around the state, and we are getting results that will help Maryland’s economy, communities, and families for a generation to come. We’re getting a great return on our investment in education. Now is not the time to divest in our future.

Thursday, May 30, 2013

Sequester Update

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Three months into sequestration, effects have started surfacing from the first round of remarkable and random federal cuts to discretionary outlays. According to a poll this week by ABC New/Washington Post, the sequester now directly affects the lives of almost forty percent of Americans to some degree, and half of those affected claim substantial personal injury from this $85 billion slash in spending.  How this expenditure reduction will specifically affect Maryland’s residents remains uncertain, but a report released Wednesday by the Economic Policy Institute (EPI) that analyzes the net change to states’ federal grants sheds some light on possible consequences for the state’s budget.

According to the issue brief, while sequestration reduced total federal grants to states by $5.1 billion overall in 2013, Maryland fared better than average, receiving a $44 million increase in its federal aid (which represents a 0.5 percent increase relative to the 2012 funding level). The report provides state residents some reason for optimism, but this analysis does not suggest that Maryland as a whole has dodged the fiscal bullet. While the net effect on federal aid to the state may show an increase, some support for programs such as housing assistance, Meals on Wheels, and Head Start has waned. The state has also seen a $3.4 million decrease in federal support to administer unemployment insurance, according to a study by Pew. Many nonprofits in the state face grant reductions, with some shedding staff as a result; others yet to be hurt by the sequester see their own cuts looming next year. Additionally, a full seven percent of Maryland’s workforce is employed by the federal government, and many major agencies have issued furlough orders.  The economic effects of these lost wages will inevitably ripple through the economy.

Results for other states were mixed. Virginia likewise saw its grants grow (up $271 million, or 2.7 percent from last year), while others in the region like the District of Columbia, Pennsylvania, and Delaware suffered millions of dollars in federal revenue losses. EPI attributes the difference in states' outcomes to the mechanics of the sequester— it only reduces spending on discretionary programs, so states with increases in beneficiaries under mandatory spending formulas saw grants expand amidst this great spending contraction. Overall, 25 states experienced reductions in federal grant funding that will decrease their ability to provide public goods such as infrastructure, education, and social services for elderly and low-income residents.

Sequestration and its effects are far from over, as Evan Soltas of Bloomberg News points out in his blog post this week, reminding Americans that another $92 billion in cuts await us in 2014, and a portion of the spending reductions from this year have yet to go into effect.