Government Shutdown Unlikely, But CR Leaves Local Governments Guessing Again

September 28, 2020 - (2 min read)

Congress is poised to send the President a bipartisan continuing resolution (CR) to extend funding for federal government operations through December 11, 2020, preventing a government shutdown after the new fiscal year (FY2021) begins this week on October 1st.

The House overwhelmingly approved the CR, called H.R. 8337, the Continuing Appropriations Act, 2021 and Other Extensions Act, by a vote of 359-57 last week. The Senate is expected to vote on the measure this week and send it to the President for enactment.

For cities and towns, the CR means that funding and agency support for federal grant programs supporting local governments will remain available until the start of a lame-duck session of Congress following the November elections. Come December, Congress will need to either pass another continuing resolution or a new spending package consisting of the 12 annual appropriations bills.

Beyond preventing a government shutdown, the CR does provide certainty in other important areas.  The measure includes a deal to provide billions in new subsidy supports for farmers as well as food and nutrition aid for families and children. It also extends authorizations until September 30, 2021, for both the National Flood Insurance Program and the federal surface transportation programs for transit, roads and more that cities rely on. The CR also stabilizes the airport and airways trust fund with a $14 billion dollar infusion.

To date, none of the 12 spending bills for FY2021 have passed Congress. Although states and localities have become accustomed to navigating the consequences of Congress’ frequent inability to enact spending bills on time at the beginning of the new fiscal year, this year the short-term CR is compounding uncertainty over federal aid for local governments. As a result, local budget writing season begins without the benefit of knowing approximately how much annual federal aid cities and towns should expect from the Fy2021 spending bills, or if Congress will ultimately satisfy the urgent request for emergency aid to address local budget shortfalls related to COVID-19.

About the Author:

 Michael-Wallace-small.jpgMichael Wallace is the Legislative Director for Community and Economic Development at the National League of Cities. Follow him on Twitter @MikeWallaceII.