Federal budget battles, potential HUD cuts and Moody’s downgrade flagged in Kent County update

Steve (staff member) and Charlie (staff member) updated the Kent County Board of Commissioners on federal budget activity and possible program cuts that could affect county funding.

At a May meeting, presenters summarized three parallel budget processes they are tracking: the administration’s “skinny” budget request, a House reconciliation package, and a rescission process seeking to claw back unspent funds. "I wish I could report that everything is running smoothly here in your nation's capital," Steve said, adding that the new administration’s actions have been unpredictable and that budget figures have changed during committee markups.

The presenters highlighted proposals that would reduce or eliminate longstanding U.S. Department of Housing and Urban Development programs including Community Development Block Grants (CDBG) and the HOME program. Charlie said, "The main issue is cuts to some of HUD's community development programs that have been in place for many years. He would phase out CDBG block grants and also phase out HUD's HOME program, that has been very important to cities and counties." Presenters also noted possible reductions to construction and grant programs that support local infrastructure and economic development and the potential elimination or scaling back of clean-energy tax credits.

Presenters discussed the fiscal implications of the House reconciliation package and the timing pressures created by the U.S. debt limit. They noted Moody’s recent downgrade of the U.S. credit rating and that most economists expect higher borrowing costs over time if the federal debt grows. "I think most serious economists would say that... we will end up paying more," Steve said when asked about the downgrade’s implications.

Commissioner Pacla asked whether the Congressional Budget Office has scored the current reconciliation package. Presenters said CBO scoring is evolving as committee markups change provisions and that many independent assessments indicate the package would increase federal debt. They recommended the county remain engaged with its federal delegation and continue outreach to monitor changes and potential impacts to county programs.

On timing, presenters urged early preparedness. "I would say right away," Steve said when asked how soon the county should begin communicating potential impacts to the community. He and Charlie estimated clearer outcomes sometime in the summer ahead of August congressional recesses and the debt ceiling deadline, but cautioned that schedules and bill language remain fluid.

The update listed programs that county staff should track closely (CDBG, HOME, certain construction grants and clean-energy tax credits) and urged continued coordination with the county administrator’s office and state and federal representatives. Commissioners asked clarifying questions about credit rating drivers, CBO scoring, and procedural timing for markups on the House and Senate sides. Presenters said they will provide follow-up briefings as scores and bill text become available.

The discussion did not include a formal county vote; it was presented as informational to help the county plan outreach and contingency steps.