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The impact of sequestration on justice and public safety funds

The Office of Management and Budget (OMB) recently released a report pursuant to the Sequestration Transparency Act (STA) of 2012, which lists funds that will be in jeopardy should Congress fail to produce and accept a plan to reduce the budget by $1.2 trillion. The budget reduction plan was required by the Budget Control Act of 2011. The list of budget accounts that could be hit by sequestration is staggering, and will have a significant impact on all areas of government should the act be put into effect.

Not only will the federal government be affected, state and local governments will be as well, due mostly to the fact that they rely heavily on the federal government to provide grant funding in many areas, including public safety and emergency management, both of which are slated to be cut. Though 100 percent of the Public Safety Trust Fund is subject to sequestration, a decision was made to sequester 7.6 percent ($8 million). According to the report, under sequestration, “The Federal Emergency Management Agency’s ability to respond to incidents of terrorism and other catastrophic events would be undermined.” FEMA’s budget account for just the Flood Hazard Mapping and Risk Analysis Program holds $98 million, of which 8.2 percent (nearly $8 million) is subject to sequestration. Non-defense function state and local programs are slated to see a cut of $183 million.

Below are two tables delineating the impact of sequestration on several key programs. All numbers are in millions.



As mentioned by Joanna Salini last week, states depend on grants that are provided from these funds, and should a disaster occur, many states would be at a loss with how to even begin rebuilding without the aid of federal funds. However, that’s exactly what states may have to do since disaster relief could be cut by $580 million (all but $1 million of the budget was sequestrable). This could have significant impact, particularly if a disaster strikes a state still working to rebuild after the floods, hurricanes and tornados of last year.

Analyst’s Take

While the chances of sequestration actually occurring are still minimal at this point, vendors should be aware of areas that could be affected, and be ready to adjust their business plans and expectations accordingly. Vendors who focus in the area of emergency preparedness and disaster recovery should be particularly in tune with sequestration plans. While post-disaster clean up will surely be completed, it will likely be on a much smaller scale and longer timeframe.

Vendors in the public safety sector should be aware that grants for E911 and next generation 911 systems (both of which are covered under the Public Safety Trust Fund) are likely to be heavily impacted. While other grant options still exist for NG911 programs, such as those under the Homeland Security Grant Program, it is likely that those grants will receive even more applications than normal. By cutting federal funding in so many areas, funding will be stretched across the board. This means that many smaller state and local entities moving forward with upgrades or replacements might be required to hold off on making improvements until federal funding becomes available again. 



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