House Panel Advances First Two Fiscal Year 2024 Spending Bills
June 15, 2023
This week, the House got back on legislative track after infighting within the Republican caucus brought the chamber to a halt last week. Upset with the outcome of the recent debt limit negotiations, a group of eleven lawmakers in the House Freedom Caucus broke with fellow Republicans last week to defeat a routine procedural vote – the first such failure on the House floor in more than 20 years. The move, which caught GOP leaders by surprise, forced Speaker Kevin McCarthy (R-CA) to cancel votes and open talks with the bloc of lawmakers. However, after a series of productive conversations and assurances that they would be involved in discussions about how to curb deficit spending in future funding packages, the Freedom Caucus members agreed to end their blockade.
Following those talks, House Appropriations Committee Chair Kay Granger (R-TX) announced on Monday that her panel will mark up fiscal year 2024 spending bills at 2022 funding levels. Notably, this is not what was agreed upon in the recently enacted debt limit deal. That agreement provides for a roughly nine percent cut to spending, albeit with the potential for adjustments that could amount to a freeze in federal funding in fiscal year 2024. Reverting to the $1.47 trillion fiscal year 2022 enacted funding level would result in an overall cut of approximately $120 million in fiscal year 2024. Moreover, the spending bills covering Defense, Military Construction-Veterans Affairs (VA), and Homeland Security would all be spared from cuts under the GOP plan. As a result, the remaining nine fiscal year 2024 funding bills would be in line for large reductions.
Across Capitol Hill, the Democratic-controlled Senate will be drafting their spending bills consistent with the $1.59 trillion government funding total established under the debt ceiling agreement. Looking ahead, and with the two chambers working with very different topline funding levels, it will be difficult for congressional negotiators to reconcile their differences later this year. The longer the two chambers are unable to agree on spending levels, the greater the threat of a federal government shutdown. Finally, it should be noted that the debt limit deal includes a trigger provision for an automatic one percent cut to discretionary spending programs if Congress does not pass all 12 appropriations bills by January 1.
House and Senate Committees Begin Consideration of FAA Reauthorization Proposals
This week, both the House Transportation and Infrastructure (T&I) Committee and the Senate Commerce, Science, and Transportation Committee began consideration of their respective versions of legislation to reauthorize the Federal Aviation Administration (FAA). While both measures have bipartisan support, there are some key differences between the two. For example, the Senate package (S. 1939) would authorize approximately $107 billion for the FAA over the next five years, compared to the $103 billion that would be authorized under the House version (H.R. 3935). In addition, both measures include $20 billion for grants under the Airport Improvement Program, but the Senate bill would authorize more funding for facilities, as well as for equipment and operations.
During House T&I Committee markup, Representative Grace Napolitano (D-CA) offered a CSAC-supported amendment that would clarify that local sales tax measures of general application are not subject to provisions of federal law that require certain tax revenues to be spent for aviation purposes. The impetus for the Napolitano amendment is a 2014 FAA ruling (79 FR 66282) that requires States and local governments to spend the proceeds of any aviation-related tax – those derived from both excise taxes and local sales taxes – on airport uses only. Although the final rule went into effect in 2017, many jurisdictions have been given additional time to come into full compliance with the terms of the FAA’s requirements.
According to the California State Board of Equalization (BOE), the FAA’s policy change, if fully enforced, would divert $17 million away from State law enforcement purposes and $17 million away from State health and social programs annually. Moreover, CA BOE estimates that an additional $24 million per year in local general sales taxes would be diverted from their voter-approved purposes.
Facing the potential defeat of her amendment, Representative Napolitano agreed to withdraw the proposal during committee markup. However, the congresswoman secured a commitment from the chairman of the T&I Committee, Representative Sam Graves (R-MO), to work to address this matter moving forward.
With regard to pilot training requirements, the House aviation bill would allow an additional 150 hours in a full-flight simulator to count toward the 1,500-hour minimum to fly a commercial plane. The underlying Senate bill, on the other hand, does not include any changes to pilot training hours. During committee consideration, Senators John Thune (R-SD) and Kyrsten Sinema (I-AZ) offered an amendment that would credit a prospective pilot with an additional 250 hours of training time toward the requirement if they complete “enhanced training.” However, the panel was forced to delay its markup to address concerns with the proposal.
Looking ahead, House and Senate transportation leaders hope to quickly advance their proposals through their respective chambers in the coming weeks. For his part, T&I Committee Chairman Graves is aiming for House passage in the third week of July to allow time for conference negotiations ahead of the September 30 expiration of the current authorization.
Interior Department Releases FY 2023 PILT Funds
On June 15, the U.S. Department of the Interior (DOI) announced that it would distribute nearly $579 million to over 1,900 local governments under the Payments in Lieu of Taxes (PILT) program. In all, 57 California counties are set to receive over $61 million this year, up from $58.8 million in fiscal year 2022.
PILT payments to counties help offset losses in tax revenues due to the presence of tax-exempt federal land in their jurisdictions. In California, every county contains some portion of federal land, and there are a dozen in which the federal government owns more than 50 percent. PILT funding allows counties to provide essential public services on these lands, including solid waste disposal, law enforcement, search and rescue operations, environmental compliance, firefighting, and other important community services.
For its part, CSAC continues to urge members of the California congressional delegation to make PILT a top budgetary priority for fiscal year 2024. The association has also encouraged lawmakers to consider approving a multi-year renewal in order to provide public lands counties with long-term certainty.
The press release from the Department of the Interior can be found here, and a full list of payments to counties can be accessed here.