U.S. House committees mark up budget reconciliation titles: What it means for counties

Key Takeaways

As of May 14, most of the U.S. House committees have completed markups of their respective sections of the budget reconciliation bill, presenting both opportunities and challenges for counties. Each committee had budgetary guidelines based on instructions provided by the budget resolution passed by both the U.S. House and U.S. Senate. 

Is this bill text final?

No. Amendments could be made to the current text of the legislation either in the House Budget Committee or in the House Rules Committee before it is put on the House floor for a final vote.

Additionally, changes could be made to the bill to ensure it can pass the U.S. Senate. Any non-budget related provision may be challenged by the Senate Parliamentarian, as the “Byrd Rule” states that only budget related provisions can be included in reconciliation and pass by a simple majority vote. 

What are the next steps?

Each of the House committee’s approved text will move back to the House Budget Committees to be put into one bill. The House Budget Committee is anticipated to mark up the bill on Friday, May 16. 

Counties should continue to advocate for county priorities to be included in the final budget reconciliation bill. NACo has compiled key highlights for counties below and a full analysis is forthcoming.

Positive Provisions for Counties

• Municipal bonds:
  The bill preserves the tax exemption for municipal bonds, protecting counties’ ability to finance critical infrastructure at lower costs. (House Ways & Means Committee)
• Major event preparedness:
  It includes $1.6 billion for local and state preparation for the 2026 World Cup and 2028 Olympics, funding counties through FEMA’s State Homeland Security Grant Program. (House Homeland Security Committee)
• Secure Rural Schools (SRS):
  SRS is reauthorized through 2027, providing forested counties with essential funding to support schools, roads and emergency services in areas with limited taxable land. (House Agriculture Committee)
• Conservation funding:
  The bill integrates $13 billion in Inflation Reduction Act (IRA) funding into the Farm Bill baseline and expands U.S. Department of Agriculture conservation programs, enabling counties and local partners to invest in soil, water, and land stewardship. (House Agriculture Committee)
• Nursing home staffing rule delay:
  Implementation of the federal nursing home staffing rule is delayed until 2035, easing pressure on county-run facilities facing workforce shortages. (House Energy & Commerce Committee)
• Medicaid DSH delay:
  Cuts to Medicaid Disproportionate Share Hospital (DSH) payments are delayed until 2029, preserving a key funding source for county-supported hospitals serving low-income populations. (House Energy & Commerce Committee)
• Renewable energy revenue sharing:
  Counties would receive 25 percent of revenue from wind and solar energy produced on federal lands, mirroring oil and gas revenue-sharing models. (House Natural Resources Committee)
• Low-Income housing tax credit:  
  The bill increases the volume of tax-credits available for low-income housing by 12.5 percent and lowers the private activity bond financing required to access the credit to 25 percent through calendar year 2029. (House Ways & Means Committee)
• GOMESA revenue sharing:  
  The bill raises the cap on revenue sharing for Gulf of Mexico Energy Security Act (GOMESA) from $500 million to $650 million through 2034, allowing counties in Louisiana, Texas, Mississippi and Alabama to receive additional revenue for offshore oil and gas energy produced in the Gulf for coastal protection and restoration. (House Energy & Commerce Committee)

Key County Concerns

• AI regulation freeze:
  A 10-year moratorium would block counties from enforcing local AI regulations, limiting our ability to manage evolving technologies in public services. (House Energy & Commerce Committee)
• Medicaid work requirements:
  Beginning in 2029, new Medicaid work requirements on able-bodied adults could increase administrative burdens and reduce access to care for vulnerable county residents. (House Energy & Commerce Committee)
• Medicaid cost sharing:
  The bill imposes new out-of-pocket costs on low-income Medicaid enrollees, likely increasing uncompensated care in county hospitals and clinics. (House Energy & Commerce Committee)
• New markets tax credit: 
  The bill does not extend the New Markets Tax Credit (NMTC) that promotes community development and economic growth by attracting private investment in low-income communities with high unemployment and poverty. (House Ways & Means Committee)
• Supplemental Nutrition Assistance Program:
  The bill increases the state and county administrative cost share from 50 to 75 percent, imposes a new benefit cost share for states and expands work requirements for certain program recipients.(House Agriculture Committee) 

Other County Impacts

• SALT deduction:
  The State and Local Tax (SALT) deduction cap would increase to $30,000 for individuals under $400,000 in income—offering partial relief to taxpayers from double taxation. (House Ways & Means Committee)
• Elective pay for clean energy:
  While counties can still use elective pay for clean energy projects, the bill rolls back eligibility for some key tax credits. (House Ways & Means Committee)
• Spectrum auctions:
  The bill reauthorizes the FCC’s spectrum auction authority, raising concerns for counties that rely on key frequencies for broadband and public safety. (House Energy & Commerce Committee)
• Medicaid match reductions:
  The bill reduces the federal Medicaid match for certain states covering undocumented immigrants, potentially shifting costs to counties in those states. (House Energy & Commerce Committee)
• Shortened presumptive eligibility:
  The bill would cut retroactive Medicaid coverage from three to one month, which may increase delays in care and financial strain on county health systems. (House Energy & Commerce Committee)
• Provider tax restrictions:
  The bill limits states’ ability to levy provider taxes that help finance Medicaid, threatening funding stability for county-operated health services. (House Energy & Commerce Committee)
• IRA funds rescinded:
  The bill rescinds $262 million in unobligated IRA funds, potentially reducing county access to energy efficiency and conservation grants as well as certain transportation funding. (House Energy & Commerce Committee; House Transportation & Infrastructure Committee)
• Opportunity Zones: 
  The bill extends and revises the Opportunity Zones tax incentive program that provides tax incentives for investments in designated distressed neighborhoods, or qualified opportunity zones. (House Ways & Means Committee)
• Highway Trust Fund:
  The bill requires states—not counties—to collect annual registration fees on electric vehicles ($250 per year) and hybrid vehicles ($100 per year) to ensure that these vehicles pay into the Highway Trust Fund. (House Transportation & Infrastructure Committee)
• Air traffic control:
  The bill invests in upgrades to air traffic control systems at airports across the country, which would likely include some county-owned airports. (House Transportation & Infrastructure Committee)
• Child Tax Credit:
  Expands the Child Tax Credit from the current $2000 level to $2500 until 2028 and returns to $2000 after. However, the bill requires both parents and all children to be a U.S. citizen and have a Social Security Number (SSN). (House Ways & Means Committee)

NACo is monitoring the reconciliation process and will continue to keep members updated.