Congress passes bill to avert shutdown, keep funds flowing to municipalities

On Wednesday, the House of Representatives and the Senate both signed off on a continuing resolution that will keep the government open and federal funds flowing to state and local governments. 

A bipartisan effort on both sides of the Capitol building was required with a 341 to 82 decision in the House and 78 to 18 ratio in the Senate.  The successful vote beats a hard budget deadline of Sept. 30, sending the legislation to President Biden for a signature. 

“The National League of Cities thanks both the Senate and House for passing the CR to avoid a federal government shutdown,” said Clarence Anthony, CEO and executive director of the National League of Cities.  “This bipartisan measure ensures sustained funding for essential programs that support local governments and the communities they serve.”  

The House vote, which needed help from the Democrats to pass, was brought to the floor using a “suspension of the rules,” maneuver which requires a two-thirds majority.  The bill includes an extra $230 million in additional funding for the Secret Service 

The extension lasts until Dec. 20, kicking the can past the November elections and into the lame duck Congressional session. Friday marks a recess for both houses, sending lawmakers home to focus on campaign-related business. They will return to Washington on Nov.12. 

The heavy legislative lifting that will be required when they get back for the lame duck session has some observers expecting an omnibus bill that could attract a muni wish-list of items as riders. 

Speaker Mike Johnson is already tamping down the talk. In remarks to reporters after the vote he said, “I want to assure everyone, and I’ve said this multiple times this week, we are not going to return to the Christmas omnibus spending tradition.”  

The Speaker once again relied on help from Democrats to get the bill across the goal line. He and the right wing Freedom Caucus absorbed another blow during the process as their bid to attach the SAVE Act, which stiffened proof of citizenship requirements for voting was shot down. 

Paying for the extra resources needed to check citizenship would have fallen onto the states and local governments. 

The National Association of Counties issued a statement on the act earlier his month saying, “Implementing changes included in the SAVE Act could require additional training for county election officials and poll workers in states with same-day registration. The SAVE Act does not authorize additional federal funding for states and local governments to implement these new guidelines.” 

The current last-minute scramble to keep the lights on in Capitol Hill can be traced to an appropriations process that started going haywire last spring. 

According to NACo’s tracking data, as of July 25 when the House adjourned for summer vacation it had only passed five of the 12 fiscal year 2025 spending bills that were supposed to be finished by June 30. The Senate performed better by marking up and advancing 11 of the 12 spending bills in their purview. 

State and local governments rely on federal funding to reimburse them for several programs with most of the money going to Medicare. According to the Pew Charitable Trusts, total federal grants to states topped $1 trillion for the first time in 2022 but was proportionally even higher in 2021. 

Per Pew, “Historically, the federal share of state revenue has ranged from about a quarter to a third. Before the pandemic, the highest share occurred just after the 2007-09 recession, when a temporary influx of federal dollars and falling state tax revenue pushed the federal share to 35.5% in fiscal 2010 and 34.7% in fiscal 2011.”