Legislative Analysis of FY 2025 President’s Budget Request
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Executive Summary
The nation’s 3,069 counties play a key role in administering federal programs and services in our local communities. Counties own and operate public infrastructure, transportation and economic development assets, provide public safety and emergency response services, and protect the public’s health and well-being. Counties are principally responsible for the delivery of essential local services to our residents, and we rely on a robust intergovernmental partnership to help support our work every day.
This analysis will provide a comprehensive overview of proposed increases, cuts or eliminations to key federal programs in the president’s budget request for Fiscal Year (FY) 2025 that are relevant to county governments and a summary of the budget outlining items of note for county governments.
Top Highlights for Counties
Proposed extension of the Affordable Connectivity Program’s funding to keep over 23 million households enrolled without disruption in the internet subsidy benefit program.
Increased mandatory funding for election administration grants through the U.S. Election Assistance Commission (EAC) for a total of $5 billion over 10 years.
Reinstatement of the expanded Child Tax Credit, which resulted in a 50 percent drop in child poverty rates in 2021, the largest decrease ever recorded.
Doubling the size of Health Center program, with a $2.4 billion increase ($8.2 billion total) for the Health Resources and Services Administration’s (HRSA) Health Center program, emphasizing the president’s focus on community-based care.
Maintaining federal highway and transit funding levels authorized by the Bipartisan Infrastructure Law with a slight increase for highways through an undefined split of $800 million between RAISE and MEGA competitive grant programs where counties are directly eligible as applicants.
Enhanced support for wildland fire mitigation and management by increasing funding for the Wildfire Suppression Operations Reserve Fund by almost 22 percent and calling for a permanent pay increase for wildland firefighters.
Increased funding for local law enforcement by providing $270 million for the COPS Hiring Program and $100 million for Community Violence Intervention Programs.
Continued investments in rural energy, water and waste disposal systems, including $2.1 billion in funding for water and waste disposal facilities and $1 billion in low-interest loans for farmers, small businesses and residents in rural counties.
Reduced funding for the Payments In Lieu of Taxes (PILT) program to $482 million in FY 2025, a $153 million decrease compared to FY 2024 estimated totals.
Federal Budget Process
The President Submits Budget Proposal to Congress
Under current law, the president must submit the budget request between the first Monday in January and the first Monday in February.
House and Senate Budget Committees Develop and Report Budget Resolutions
If the respective chambers pass these resolutions, they reconcile them in a budget conference. This sets the total amount of money congressional Appropriations Committees may spend for the fiscal year. If the two chambers are not able to agree on a budget resolution, each chamber may enact a “deeming resolution,” which sets appropriations levels for that chamber’s Appropriations Committee.
House and Senate Appropriations Committees Allocate Funding to Federal Programs
The Committees set specific discretionary funding levels for federal programs among 12 subcommittees, each dealing with a different part of the budget. After the respective chambers pass individual appropriations bills, they must go to conference to reconcile the appropriations bills for a final vote.
The President Signs Funding Bills into Law
All 12 funding bills must be enacted in time for the beginning of the new fiscal year on October 1st. In recent years, the government has struggled to meet this deadline and instead passed temporary extensions of current spending levels, known as continuing resolutions, well into the new fiscal year.
Top Line Numbers
$7.3 trillion
in total Federal Spending for FY 2025
$5.7 trillion
in Mandatory Spending for FY 2025
$1.6 trillion
in Discretionary Spending for FY 2025
Overview: The President’s FY 2025 Budget Request
On March 11, President Biden released the FY 2025 budget request outlining the administration’s proposal for budgetary spending for the fiscal year beginning October 1, 2024. The president’s budget requests a total of $7.3 trillion in both mandatory and discretionary federal spending in FY 2025, $300 billion more than the president’s budget request for FY 2024 and $1.2 billion more than total FY 2023 enacted funding levels.
With divided control in the 118th Congress, it is anticipated that the Republican majority in the House of Representatives will propose significant alterations to the president’s budget request during the FY 2025 appropriations process. On March 7, the Republican-led House Budget Committee passed its own budget blueprint for FY 2025 that would reduce the federal deficit by $14.1 trillion over ten years. However, the proposal also included significant cuts to both federal spending and revenue over that period.
Deficit & Debt
Deficit: According to the president's proposal, the federal budget deficit is projected to increase from $1.7 trillion in FY 2023 to $1.9 trillion in FY 2025 before decreasing to $1.7 trillion by FY 2034. The deficit as a percentage of GDP is expected to rise from 6.3 percent in FY 2023 to 6.6 percent in FY 2024 before falling to 3.9 percent by FY 2034. Federal spending is expected to rise over the next ten years, mainly due to an anticipated increase in the cost of social services such as Social Security and Medicare, as well as an increase in interest rates. Revenue is also expected to grow due to projected economic growth and changes in federal tax policy. Federal revenue is expected to grow from 16.5 percent of GDP in FY 2023 to 20.3 percent of GDP by FY 2034.
Debt: Over the next ten years, the national debt under the president's budget is projected to grow from $27.4 trillion to $45.1 trillion by the end of FY 2034. The debt-to-GDP ratio, which illustrates the national debt in proportion to the U.S. economy, is expected to increase from 97 percent of GDP in FY 2024 to 106 percent of GDP from FY 2030 through the end of FY 2034. However, these estimates are still lower than the FY 2034 debt projections from the Congressional Budget Office (CBO) and Office of Management and Budget (OMB) baselines of 113 percent and 116 percent of GDP, respectively.
Projected deficit reductions: The president's budget also includes mechanisms that would yield a net reduction of $3.3 trillion in the federal deficit through FY 2034. These mechanisms include $3.2 trillion in new spending and tax breaks, $5.2 trillion in revenue increases, over $900 billion in spending reductions and nearly $400 billion in net interest savings. These proposals would build on $1 trillion in projected deficit reductions secured through discretionary spending caps included in the bipartisan Fiscal Responsibility Act (FRA) of 2023.
Major Proposals of Significance to Counties
Affordable housing in rural counties
The president’s budget would provide increased investments in the U.S. Department of Agriculture (USDA)’s rural housing programs, including $1.69 billion in funding for USDA Rural Development rental assistance. The budget also puts forward a suite of programmatic changes and legislative proposals to incentivize the construction of new affordable housing units and preserve existing housing for low-income families in rural counties.
Renewed investment in crop insurance
The president’s budget repeats a proposal included in the FY 2024 budget to revive the cover crop payment program offered temporarily by USDA in 2021 and 2022. This program was originally funded through COVID-19 relief legislation and was not funded again in FY 2023 or FY 2024. The administration’s proposal would make these payments permanent at $825 million over 10 years, including $60 million in FY 2025
Lowering energy costs for rural residents
The president’s budget proposes new investments in programs that reduce energy costs for rural communities, including $1 billion for renewable energy loan guarantees for farmers and small rural businesses, and $53 million for zero-interest loans through the Rural Energy Savings Program (RESP). These investments would put more tools at the disposal of rural counties and residents to develop modern, efficient and resilient energy systems.
Increased investments in rural water and waste disposal facilities
The president's budget requests $2.1 billion in total funding for water and waste disposal facilities that serve rural communities, an increase of $138.4 million from FY 2024 enacted levels. Facilities supported by these resources provide safe drinking water and sanitary waste disposal for rural county residents and help rural communities thrive by attracting new businesses.
Support for eviction prevention efforts
The president’s budget requests $3 billion in mandatory funding for competitive grants to promote and strengthen state and local government efforts to reform eviction policies by providing access to legal counsel, emergency rental assistance and other forms of rent relief.
Enhancements to the Low-Income Housing Tax Credit
The president’s budget request includes an expansion of the Low-Income Housing Tax Credit (LIHTC), aimed at increasing credit allocation limits, reducing the bond financing threshold and revising the “qualified contract” and “right of first refusal” provisions for future developments. LIHTC is the largest federal program encouraging the creation of affordable rental housing for low-income households, having created over two million affordable units since its inception in 1986.
Increased funding for the Housing Choice Voucher Program
The president’s budget request calls for a total of $32.75 billion, which represents an increase of $369 million over the 2024 enacted level, for the Housing Choice Voucher Program (HCV) to maintain services for all currently assisted families and to expand assistance to an additional 20,000 households. Administered locally through public housing agencies (PHAs), these vouchers are used to assist more than 2.3 million low-income households to afford decent, safe and sanitary housing in the private market.
Additional funding for economic development
The president’s budget request calls for $437 million for the U.S. Economic Development Administration (EDA), representing a $37 million increase over the 2024 enacted level. Counties utilize EDA programs to invest in infrastructure, workforce development, business recruitment and retention, regional marketing and branding, entrepreneurship and small business support to help bolster local economic prosperity and resiliency.
The State Revolving Funds at EPA
The president’s budget requests $1.24 billion for the Clean Water State Revolving Fund (CWSRF), $4 million below the FY 2024 enacted level, and $1.13 billion for the Drinking Water State Revolving Fund (DWSRF), level with the FY 2024 enacted level. Counties support the Clean Water and Drinking Water SRFs, which provide capitalization grants to states who then provide communities with low-cost financing for a wide range of water infrastructure projects.
Additional funding for the EPA Brownfields Program
The president’s budget requests $53.96 million for the Brownfields Program, a $7.71 million increase over the FY 2024 enacted level. Counties support the EPA Brownfields Program, which provides funding to counties and other eligible entities to assess, cleanup and redevelop brownfield sites across the country.
Bolstering the DOE’s Weatherization Assistance Program
The president’s budget requests $385 million for the Weatherization Assistance Program, an increase of $59 million over the FY 2024 enacted level. Counties support the Weatherization Assistance Program, which helps low-income households reduce their energy costs.
Mandatory funding for election administration grants
The president’s budget again proposes $5 billion in new, mandatory funding over 10 years to the U.S. Election Assistance Commission (EAC) to make formula grants to states to upgrade voting equipment and ensure election security.
Maintains the cap on the state and local tax (SALT) deduction
While the president’s budget emphasizes reducing costs for Americans, the budget notably does not include a proposal to provide individuals, married couples and families with relief from the $10,000 cap on the SALT deduction.
Bolstering healthcare workforce support
The president’s budget request provides $2.6 billion for HRSA’s Bureau of Health Workforce, a $775.4 million increase. The Bureau of Health Workforce supports key county workforce programs such as the National Health Service Corps, behavioral health workforce development programs and the nursing workforce development program.
Doubling the size of the Health Center Program
Emphasizing the president’s focus on community-based care the budget seeks to double the size of the Health Center Program with a $2.4 billion increase ($8.2 billion total) for the HRSA’s Health Center program.
Level funding for rural health initiatives
Notably, the budget does not request any new funding for the Federal Office of Rural Health Policy (FORHP) under HRSA but would provide level funding for the office at $352.4 million. The FORHP provides critical technical assistance and grant funding to county hospitals and other county health facilities, without additional funding these programs cannot be expanded to serve more facilities.
Youth mental health services support
The president’s budget would provide an increase of $50 million for SAMHSA’s Project AWARE (Advancing Wellness and Resiliency in Education), for a total of $190 million. This increase in funding will bolster youth mental health services in counties across the nation, helping to address the growing need for support and resources in local communities.
New funding for community violence initiatives
In addition to $100 million in discretionary funding, the president’s budget request includes $150 million in mandatory funding for the Community Violence Intervention Initiative, for a total of $2.5 billion in discretionary and mandatory funding over 10 years. The significant funding allocation for this initiative will empower counties to implement targeted strategies aimed at reducing community violence and fostering safer environments for residents across the nation.
Support for the new Community Mental Health Centers program
The president’s budget request provides $3.5 billion, a $736 million increase, for SAMHSA’s mental health activities. This includes $413 million for a new mandatory Community Mental Health Centers program. County governments, through 750 behavioral health authorities and community providers, administer community-based services for individuals with mental illness and substance use conditions. Additional funding will empower counties to establish and improve local mental health facilities, expanding access to essential services and better supporting those in need.
New investments in behavioral health technology
The president’s budget request would provide $1.0 billion to advance health information technology adoption and engagement in local behavioral health facilities, a key county priority for ensuring behavioral health care continuity.
Affordable child care and free pre-school
The president’s budget request would invest $600 billion over 10 years for a new federal-state partnership to increase access to high-quality, affordable child care along with free preschool for all four-year-olds in the setting of their parents’ choice. In addition, the budget calls for a $544 million increase in Head Start funding to support implementation of a Notice of Proposed Rulemaking calling for increased wages for Head Start teachers.
Cutting child poverty in half by expanding the Child Tax Credit
The president’s budget request renews a proposal to restore the American Rescue Plan Act (ARPA)’s temporary expansion of the size and eligibility of the Child Tax Credit (CTC). Evidence suggests the proposal to increase the value of the credit ($3,600 per child under 6 and $3,000 per child aged 6-17) and allow very low-income households to access this direct income support would reduce child poverty by nearly 50 percent.
Increased housing support for former foster youth
The president’s budget request proposes $9 billion over 10 years to provide housing vouchers for 20,000 youth aging out of the foster care system each year.
Free school meals
The president’s budget request seeks $15 billion over 10 years to ensure that 9 million additional low-income children have access to free school meals.
Free community college
The president’s budget request seeks $90 billion in mandatory funding over 10 years for a federal-state partnership to provide two years of free community college for eligible first-time students and workers wanting to reskill.
Veterans homelessness
The president’s budget request would invest $13 billion in mandatory funding to expand the Housing Choice Voucher program for 450,000 extremely low-income veteran families by the year 2033.
Investing in efforts to secure the border and build capacity
The president’s budget request would invest $2.9 billion for DHS to build long-term capacity in the areas of border security, immigration enforcement and countering fentanyl, including $405 million to hire 1,300 additional Border Patrol Agents and $239 million to hire 1,000 additional Customs and Border Protection Officers.
Increased funding for critical FEMA grant programs
The president’s budget request would invest $3.2 billion for FEMA grants that support local efforts to prevent and protect against natural disasters. Importantly, it would increase funding for firefighter grants by $50 million and include $375 million for the Emergency Management Performance Grant, an increase of $20 million.
Ensuring continual funding for FEMA’s Disaster Relief Fund
The president’s budget request would provide $9 billion for FEMA’s Disaster Relief Fund to ensure ongoing recovery efforts in local communities, including counties, can continue without interruption.
Increased funding for local law enforcement
The president’s budget request would provide $270 million for the COPS Hiring Program, an increase of $45 million. This would provide needed resources for local law enforcement agencies to meet the staffing shortages many localities are facing.
Reduced funding for the Payments In Lieu of Taxes program
The president’s budget request would fund the Payments in Lieu of Taxes (PILT) program at $482 million, a $153 million decrease compared to FY 2024 estimated totals. PILT funding helps over 1,850 counties with public lands in their jurisdictions provide essential services for residents and visitors, including road and bridge maintenance, law enforcement, search and rescue, emergency medical services, wildfire protection, solid waste disposal, and environmental compliance.
Investments in wildland fire mitigation and management
The president’s budget request would provide $2.8 billion for the Wildfire Suppression Operations Reserve Fund, a $500 million increase compared to FY 2024 totals. In turn, the president’s budget proposes providing permanent pay increases to wildland firefighters as wildfire season becomes longer and more severe across the nation’s counties.
Increased funding for management of federal lands and resources
The president’s budget proposes $1.6 billion in funding for the Bureau of Land Management (BLM), a $300 million increase compared to FY 2024 totals. Enhanced funding levels for federal lands management will empower counties and our federal partners like the BLM to serve as good stewards of our public lands.
Drought resiliency
The president’s budget proposes $1.6 billion for the Bureau of Reclamation to ensure reliable and resilient water supply. County residents across the country rely on water and power provided by the Bureau of Reclamation. The Bureau’s proposed FY 2025 funding levels reflect a $150 million decrease compared to FY 2024 totals.
Extension of the Affordable Connectivity Program
The president’s budget request includes $6 billion for extending funding for the Affordable Connectivity Program (ACP) through the end of 2024 to prevent de-enrollment of the 23 million household recipients of the benefit. The president’s budget indicates that the White House commits to working with Congress to secure a deal for the ACP that ensures the program receives sustainable, long-term funding that supports universal access to broadband connectivity.
Provided additional funding for rural broadband
The president’s budget includes a request for $112 million for the U.S. Department of Agriculture’s Rural e-Connectivity (ReConnect) Program, which provides funding via grants, loans, and grant-loan combinations for the construction of last-mile connectivity networks that deliver reliably high-speed internet to households and businesses.
Continued investment in America’s transportation infrastructure
The president’s budget request for the U.S. Department of Transportation (USDOT) proposes investing $72.3 billion in the nation’s highways, roads and bridges; $21.1 billion in public transit systems; $16.4 billion in the national rail network; $26.8 billion in airports; and $4.9 billion in the Office of the Secretary, which houses important programs for counties, like RAISE and Safe Streets and Roads for All. These amounts collectively represent a four percent increase from the modal administrations’ actuals in FY 2023 (the budget does not include FY 2024 actuals).
Eliminated appropriations for “Highway Infrastructure Programs”
The budget proposes eliminating funding for the account, which received $2.25 billion in FY 2024 and is primarily used for congressionally directed spending projects that often benefit local communities.
Positive changes to some Federal Transit Administration programs
The president’s budget includes proposed changes that could benefit counties include increasing the federal share for Section 5311 Rural Formula Grants from 80 percent to 100 percent for FY 2025 only and allowing transit providers in urbanized areas with over 200,000 residents to use a portion of formula grant funds for operating expenses at a 50 percent federal cost share.
Considerable new investments for the Airport and Airway Trust Fund
The Airport and Airway Trust Fund (AATF) funds programs important to the nation’s 34 percent of county-supported airports, like the Airport Improvement Program. The president’s budget would raise an additional $2.5 billion for the AATF over the next decade by increasing the gas tax on private jets from ¢.218 cents/gallon to $1.06/gallon staggered over five years.