By Robin Respaut
SAN FRANCISCO (Reuters) – President Donald Trump’s government order final week to chop federal funding to self-proclaimed sanctuary cities would possible not end in an impression to cities’ bond scores, Fitch Ratings reported on Monday.
Instead, a push to transform Medicaid to a block grant would possible end in a extra vital impact on state and native authorities funds, Fitch famous.
Federal funding represents solely a small portion of native revenues and most of the funding is restricted to particular packages, similar to Temporary Assistance for Needy Families (TANF) and faculty lunch subsidies, Fitch reported. In common, federal funding doesn’t help cities’ basic operations.
Sanctuary standing isn’t an official designation. Still, cities throughout the nation have vowed some type of safety to undocumented residents, together with New York, Los Angeles, San Francisco, Boston and Chicago.
Much of the federal funding spent on the municipal degree flows to states, counties and faculty districts, fairly than cities.
A Reuters evaluation of the nation’s ten largest cities that defend unlawful immigrants discovered that the presidential order might strip municipalities of $2.27 billion yearly.
“Direct funding is limited,” reported Fitch. “Moreover, civil and constitutional challenges appear likely to impede the implementation of the executive order.”
Last week’s government order exempted federal dollars used for regulation enforcement, sparking opponents to say that a decide might strike down that part of the order as unconstitutional.
Fitch famous that President Trump’s push to repeal the Affordable Care Act, also referred to as Obamacare, with out a alternative might have a extra significant influence on state and native authorities funds.
The Kaiser Family Foundation estimates a repeal of Obamacare and a cap on federal Medicaid spending, reminiscent of via a block grant or a per capita cap, might minimize Medicaid funding by 41 % over the subsequent decade. That would doubtless handicap states’ capacity to answer bigger enrollments throughout recessions.
(This story has been refiled to right hyperlink in paragraph eight.)
(Reporting by Robin Respaut; Editing by Andrew Hay)