On December 23, 2022, the U.S. Congress enacted a Fiscal Year (FY) 2023 omnibus appropriations bill to fund the federal government through September 30, 2023. Enactment of the omnibus followed a series of Continuing Resolutions (CR) to fund the federal government and avert a government shutdown since the beginning of the federal fiscal year on October 1, 2022. President Biden signed the $1.7 trillion omnibus appropriations bill into law on December 29, 2022.

For the second year in a row, discretionary spending levels for FY 2023 were not limited by statutory spending caps prescribed by the Budget Control Act of 2011. As such, the White House, congressional leadership, and top appropriators negotiated topline spending levels over several months.

The FY 2023 omnibus includes several key investments of importance to counties detailed in this report. These include, but are not limited to, full funding for the Payments in Lieu of Taxes (PILT) program and significantly invests in the RECOMPETE pilot program and technology hubs authorized by the bipartisan CHIPS and Science Act. These programs and others funded by the bill, including a $550 million increase in wildland fire suppression, will enable counties to provide critical services and plan for economic sustainability and growth in 2023.

The final omnibus represents a total of $1.7 trillion in discretionary spending across all 12 spending bills. Of this total amount, $773 billion is in non-defense discretionary spending, an increase of 5.9 percent over the comparable FY 2022 level, and $858 billion is in defense discretionary spending, an increase of 9.7 percent.

In addition to regular programmatic funding and extensions, the FY 2023 omnibus included nearly $10 billion in earmarks (rebranded as community project funding and congressionally directed spending), representing 4,000 projects, for the first time in nearly a decade, although with increased transparency and guardrails. As a result, hundreds of county programs and critical infrastructure projects aimed to better serve communities will receive direct federal investments.   

The omnibus bill delivers on many county priorities which are detailed below. Notably. during consideration of the final omnibus agreement, the U.S. Senate adopted an amendment to the package offered by Sens. John Cornyn (R-Texas) and Alex Padilla (D-Calif.) the bipartisan State, Local, Tribal and Territorial Fiscal Recovery, Infrastructure and Disaster Relief Flexibility Act. This amendment grants additional flexibility to county governments in investing resources from the American Rescue Plan’s (ARPA) Coronavirus State and Local Fiscal Recovery Fund, including infrastructure, community development, and disaster response. It will also provide the U.S. Treasury with much-needed resources to assist counties in deploying Recovery Funds.

This analysis includes funding highlights for key programs impacting counties.

County Priorities Included in FY 2023 Omnibus

  • One year of full, mandatory funding for Payments in Lieu of Taxes (PILT) for federal public lands counties
  • Funding for direct county investments authorized by the bipartisan CHIPS and Science Act, including $500 million for technology hubs and $200 million for the RECOMPETE pilot
  • Reforms to the Medicaid Inmate Exclusion Policy, providing access to Medicaid and Children’s Health Insurance Program benefits for juveniles awaiting trial, for which NACo aggressively advocated
  • County mental health priorities, such as funding for the 988 crisis line and reauthorization of the Community Mental Health Services Block Grant program
  • Permanent extension of the American Rescue Plan Act’s state option to provide 12 months of continuous Medicaid coverage for post-partum care
  • $75 million for Election Security Grants to improve the administration of federal elections, enhance election technology and make security improvements as authorized by Help America Vote Act (HAVA)
  • Additional funding for the Clean Water State Revolving Fund and Drinking Water State Revolving Fund
  • One-year reauthorization of the federal Temporary Assistance for Needy Families (TANF) program
  • A $100 million increase in funding for the U.S. Department of Agriculture's (USDA) Rural Development programs, with funding now totaling $4 billion
  • Funds the U.S. Department of Transportation (USDOT) at the highest level in history, including additional funds for direct, county-eligible RAISE grants

FY 2023 Discretionary Funding by Spending Bill

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