The California Institute for Federal Policy Research

Quick Look: President Bush's FY 2009 Budget: State and Local Grant Funding Outlined In FY 2009 Budget - California Funds, California Percentage Share, and Total U.S. Funding -- Feb. 4 2008

The California Institute prepares a quick analysis of the President's budget request on the day it is released.  For the FY 2009 Budget, the budget was released the morning of February 4, 2008.  The following represents an examination of this portion of the budget from a California perspective.  For analysis of other components visit our 2009 Budget page.

BUDGET CROSSCUT: STATE AND LOCAL FORMULA GRANTS

The budget includes a breakout of estimated spending for a variety of federal formula grant programs on a state-by-state basis. Located again in the Analytical Perspectives supplement, the associated tables indicate that California receives 11.6 percent of total spending -- an share substantially below the state's 12.2 percent share of the nation's population.  Further, the 11.6 percent share is a decline from the FY 2008 budget documents' estimate of 11.7 percent.

For the 30 programs broken out, California is expected to receive $46.4 billion of the nation's $400 billion in anticipated FY 2009 spending.  (This compares to $45.7 billion of the nation's total 2008 spending of $391 billion for listed programs). For every item, each state's percentage of the U.S. total remains constant for 2007 through 2009, meaning that no new calculations are made to better predict the latter years.

To view a California Institute breakout of California's share of funding from each grant program for FY 2007-2009, visit http://www.calinst.org/pubs/budget2009/grants.shtml , or for a pdf version, go to http://www.calinst.org/pubs/budget2009/grants.pdf .

A supplementary document to the President's Budget outlines current, predicted, and proposed allocations under some of the largest federal formula grant programs, and lists expenditure totals for each state. In total, 31 programs were outlined at this level of detail. It is important to note that relatively little can be determined at this early stage regarding any of these programs; future demographic, economic, usage, and other factors will determine states' actual shares in most cases.

The $400 billion in total FY 2009 federal spending for these 30 programs would represent more than 85 percent of federal spending for all federal grants, of all sizes, to state and local governments.

Medicaid is by far the largest federal grant, and any change in its funding would exert an enormous impact on federal grant expenditure totals. More than half of federal grant spending flows through that one grant program.  As shown in the table, California is expected to receive $22.9 billion, or 10.41 percent, of the nation's $221 billion, from the Medicaid program in 2009. Federal payments reimburse outlays by state and local governments for providing health care services for low-income residents of California -- where the program funds the Medi-Cal program -- and residents of other states.  (Because Medicaid is a reimbursement program, actual spending totals will not be known for some time.)

For federal-aid highway program spending, the budget predicts $3.16 billion for California, approximately level with the $3.0 billion predicted for FY 2008 (but an increase from $2.4 billion predicted for in 2006 and $2.9 billion in 2007). The total spending amount, controlled by the SAFETEA-LU transportation reauthorization bill enacted in 2005, would represent an 8 percent share of the national total.

Other large predicted formula grant spending totals for California in the President's 2009 Budget Proposal included $3.66 billion for TANF welfare grants (the state's longstanding strong share of 21.5% would be maintained), $2.9 billion for Section 8 housing vouchers (of which California's receipts would constitute 18.1%), $1.73 billion for Title I education grants (a further slippage to 12.1% for California from a high-water mark several years ago when the state received in excess of 14%), $1.2 billion for special education grants to states (10.6% of the U.S. total) under the Individuals with Disabilities Education Act or IDEA, $1.26 billion for federal transit formula grants (a 14.6% share of the program), and $1.24 billion from the federal Foster Care Title IV-E program (a notable 27.7% of total U.S. spending).  Other federal grannt programs for which California's 2009 receipts are expected to exceed $1 billion include the National School Lunch Program, where the state's $1.15 billion represents 13.35 percent of total spending, and the titularly long-winded Special Supplemental Nutrition Program for Women Infants and Children (WIC), where California's $1 billion is expected to account for 16.2 percent of U.S. grant awards.

SOURCE: California Institute Analysis of President's Budget Proposal for FY 2009, Analytical Perspectives, Released February 4, 2008.  California Institute for Federal Policy Research, www.calinst.org.

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