The Office of Management and Budget (OMB) is proposing broad changes to regulations governing direct federal disbursements, which pose major impacts on counties and boroughs and represent the largest revision since 2013.
About the proposed changes: “The proposed rule would apply to all federal grant, cooperative agreement and pass-through awards counties receive, a portion of $1 trillion in annual federal grant funding. Counties that often serve and operate as pass-through entities, which administer federal funds to subrecipients, are also subject to additional requirements under the proposed rule. These changes could put counties at risk of grant termination if they run afoul of policies articulated by executive orders.” (NACo)
Learn more about the proposed rewrite here.
Comments will be accepted until July 13.
NACo is holding a webinar on June 15 to discuss the changes counties need to note as they budget for federal awards.
Why AML opposes the proposed changes: Federal financial assistance is central to municipal government in Alaska. Communities rely on federal awards to maintain roads, ports, water and wastewater systems, public safety, emergency response, housing, energy resilience, broadband, planning capacity, and disaster recovery. These programs must be governed by rules that are clear, predictable, fair, and administrable.
The proposed rule would increase uncertainty, expand federal agency discretion, add administrative burden, and create new financial risks for local governments. These concerns are especially acute in Alaska, where municipalities operate in a high-cost environment, often with limited staff, constrained revenue bases, short construction seasons, supply-chain challenges, and communities accessible only by air or water.
AML has submitted comments (attached) urging OMB to withdraw the proposal or substantially revise it after meaningful consultation with local governments, Tribal governments, state agencies, and federal grant recipients. Members can submit their comments here until July 13.