The budget that House Budget Committee Chairman Paul Ryan developed and the full House passed recently would cause federal support for services that state and local governments provide — schools, health care, clean water facilities, and law enforcement, for example — to decline precipitously over the next several years.
These reductions would be on top of deep cuts in federal funding for states and localities already scheduled under current law.
As difficult as the current spending caps will be for states and localities, the Ryan budget would impose much deeper cutbacks. Since 1976, federal discretionary grants to states and localities have averaged 1.4 percent of the nation’s Gross Domestic Product (GDP).
By 2023, the Ryan budget would reduce this funding to about 0.66 percent of GDP, half the historical average and well below the level likely to be provided under the BCA caps. (In 2023, under the BCA caps, discretionary funding to states and localities would likely be about 0.84 percent of GDP.)
Cuts of such magnitude would force states and localities to reduce the quality and reach of their public services, or to raise new revenue to continue meeting these needs. Either way, the result would be a very large cost shift from the federal government to states and localities.
Click here to read the full report from the Center for Budget and Policy Priorities (CBPP.)