On Monday, President Joe Biden announced the $5.8 trillion Fiscal Year 2023 Budget Proposal that focuses on three values – fiscal responsibility; safety and security; and investments to build a better America.
The budget proposal provides $3.2 billion in discretionary resources for state and local grants and $30 billion in mandatory resources to support law enforcement, crime prevention, and community violence intervention, including putting more officers for the community.
To address the shortage of affordable housing in communities, the budget proposes $50 billion for housing construction and supply – addressing existing market gaps and helping to stabilize housing prices over the long-term. This includes funding, via the Department of Housing and Urban Development, for state and local housing finance agencies and their partners to provide grants, revolving loan funds, and other streamlined financing tools to boost housing supply, with a particular focus on housing types that have traditionally been difficult to finance using existing federal financing but have the potential to boost supply and density in supply-constrained communities.
The budget also includes grants to advance and reward state and local jurisdictions’ efforts to remove barriers to affordable housing development. It also includes modifying Low-Income Housing Tax Credits to better incentivize new unit production and funding for the Department of the Treasury’s Community Development Financial Institutions Fund to support the financing of new construction and substantial rehabilitation that creates net new units of affordable rental and for-sale housing.
The proposal includes a Billionaire’s Minimum Tax that raises $360 billion as well as a Global Minimum Tax to ensure that large corporations do not avoid paying taxes. The President reiterated his promise to not to raise any taxes on anyone making $400,000 or less.
Due to the Russian invasion of Ukraine, there is $773 billion for defense spending in this proposal, which is $30 billion more than was approved in FY22.
Also included in President Biden’s budget proposal is funding for a variety of policy initiatives including preparation for the next pandemic, fighting for gun safety, universal pre-kindergarten, doubling of the maximum Pell Grant to attend college, tax credits for making homes more energy-efficient, research and development to broaden the reach of solar and build a clean energy future, mental health services, and cancer research.
The proposed budget also pledges to cut the deficit by more than $350 billion.
There was no mention of including the elimination of the State and Local Taxes (SALT) deduction cap in the budget proposal.
In the coming months, Congress will hold hearings, evaluate the proposal and include its’ own priorities, as well as a decision on whether or not to include member-directed spending in the budget bills it considers. We encourage you to identify projects and have information prepared if there is an application process for these member-directed projects.
The federal fiscal year begins on October 1. Last fiscal year, as is often the case, there were several continuing resolutions to fund the government and the full budget was not enacted until March. We will continue to monitor the process and report back as progress occurs.
Contact: Paul Penna, Senior Legislative Analyst, ppenna@njlm.org or 609-695-3481, x110.