After almost six months since the beginning of the federal Fiscal Year (FY) 2022 and after relying on a series of Continuing Resolutions (CRs), Congress reached a bipartisan agreement on a FY 2022 omnibus appropriations bill on March 9, 2022, to fund the federal government through September 30, 2022. Both the U.S. House and U.S. Senate passed the omnibus by an overwhelming bipartisan vote on March 9 and March 10 respectively, and President Biden signed the 2,741-page, $1.5 trillion spending bill into law on March 15.
Discretionary spending levels for FY 2022 were not limited by statutory spending caps specified under the Budget Control Act of 2011 for the first time in nearly a decade. In June 2021, the U.S. House passed a deeming resolution (H.Res.467) providing for $1.506 trillion in total discretionary spending in FY 2022. However, this resolution did not prescribe topline defense and non-defense spending for the year. In August 2021, a formal FY 2022 budget resolution (S.Con.Res.14) was adopted by Congress, which did not include a topline discretionary budget agreement and instead included budget reconciliation instructions to authorizing committees to advance the White House’s Build Back Better plan. While the U.S. Senate did not adopt a deeming resolution, in September 2021 the Senate Budget Committee filed a $1.498 trillion FY 2022 topline spending allocation for the Senate Appropriations Committee.
Absent of a bipartisan and bicameral budget agreement, the White House, congressional leadership and top appropriators negotiated for months over topline defense and non-defense spending levels. The president’s FY 2022 Budget requested $769 billion in non-defense discretionary funding, a 16 percent increase over the FY 21 enacted level, and $753 billion for national defense programs, a 1.7 percent increase. However, Republican lawmakers uniformly rejected this request and argued for more parity between topline defense and non-defense spending. The final agreement provides for approximately $1.5 trillion in total federal discretionary spending across all 12 appropriations bills, of which $730 billion is in non-defense spending, a 6.7 percent increase over the FY 2021 level, and $782 billion is in defense spending, a 5.6 percent increase.
Note: Reflects on-budget (non-emergency) spending only; does not include funds already directly appropriated under the Infrastructure Investment and Jobs Act (IIJA) of 2021.
The FY 2022 omnibus includes several key investments of importance to counties further detailed in this analysis. These include, but are not limited to, increased federal funding for rural development, broadband and public health programs, one-year of full, mandatory funding of the Payment in Lieu of Taxes Program (PILT), and an increased federal cost share for the Federal Emergency Management Agency (FEMA) Public Assistance programs. Of note, and as indicated throughout this analysis, several of the funding levels included in the omnibus for certain transportation, water, broadband, environmental remediation, power/energy and resiliency, programs are in addition to investments made in the Bipartisan Infrastructure Law (Infrastructure Investment and Jobs Act (IIJA); P.L. 117-58).
In addition to regular programmatic funding and extensions, the FY 2022 omnibus included nearly $10 billion in earmarks (rebranded as community project funding and congressionally directed spending) for the first time in nearly a decade, although with increased transparency and guardrails. In total, approximately 4,000 projects limited to certain spending accounts across 10 of the 12 appropriations bills were included in the final omnibus. As a result, hundreds of county programs and critical infrastructure projects aimed to better serve communities will directly receive federal investments.
Additionally, the final spending package included $13.6 billion in supplemental spending for military, humanitarian and economic aid to Ukraine. While the initial version of the omnibus included $15.6 billion in supplemental COVID-19 relief spending, these provisions were ultimately stripped from the bill prior to final passage over concerns related to spending offsets prescribed to these funds. Democratic Congressional leadership will instead move to pass the supplemental COVID-19 aid funding as standalone legislation (H.R. 7007).
|Extension of the National Flood Insurance Program (NFIP) Authorization||
Authorization for the National Flood Insurance Program (NFIP) is extended through September 30, 2022, allowing the Federal Emergency Management Agency (FEMA) to continue issuing new policies while long-term reauthorization is negotiated in Congress. Businesses and homes in nearly every county are covered by NFIP policies.
|Violence Against Women Act (VAWA) Reauthorization||
The FY 22 omnibus includes the Violence Against Women Act (VAWA) of 2022 (S. 3623) to reauthorize the program through 2027. VAWA authorizations lapsed in 2019, and the bipartisan reauthorization includes funding for grant programs utilized by state and local VAWA service providers.
|Health and Human Services Provisions||
The FY 22 omnibus includes: Funding to improve maternal health, including grants for Medicaid providers to provide integrated services to pregnant and postpartum women; Language waiving the Drug-Free Communities Support Program matching funds requirements for certain grants for reducing substance use among youth; Extension and expansion of telehealth services and an extension of the Temporary Assistance for Needy Families (TANF) program through September 30, 2022. The bill also includes $2.5 million in funding to support the White House in convening a National Conference on Hunger and Health and directs the CDC to ensure that local health departments receive federal funding and to strengthen rural health efforts.
|Full Funding for the Payment in Lieu of Taxes (PILT) Program||
The omnibus bill includes the same full-funding language for the Payment in Lieu of Taxes (PILT) program as in previous appropriations bills, which ensures counties will receive their full payment based on the PILT formula. NACo supports full-funding of the PILT program.
|H.R. 5735 ARPA Recovery Fund Flexibility||
In October 2021, the State, Local, Tribal, and Territorial Fiscal Recovery, Infrastructure and Disaster Relief Flexibility Act (S. 3011/H.R. 5735), unanimously passed the U.S. Senate and now awaits consideration in the U.S. House of Representatives. This legislation would provide additional flexibility for the $350 billion Coronavirus State and Local Fiscal Recovery Fund (Recovery Fund) authorized by the American Rescue Plan Act (ARPA). While not included in the FY 22 omnibus, NACo urges the U.S. House of Representatives to pass H.R. 5735.
|State and Local Tax (SALT) Deduction||
Counties have supported a full restoration of the State and Local Tax (SALT) deduction since the establishment of the cap as part of the Tax Cuts and Jobs Act of 2017 (P.L. 115-97). While not included in the FY 2022 omnibus, NACo continues to work with Congress to reinforce local decision-making authority and prevent double taxation by supporting legislation to fully restore the SALT deduction.
Tax-exempt bonds are a critical financing tool for counties nationwide. The FY 2022 omnibus did not include language in the House-passed FY 22 Financial Services appropriations bill directing Treasury to assess the feasibility and potential benefits of issuing "Green Bonds" to raise money for climate and environmental projects.