Sonoma City hears federal budget risks: municipal bonds, CDBG, FEMA and EMS reimbursement flagged as priorities

SONOMA CITY — At a special April 21 meeting, the Sonoma City Council heard a briefing from MMO Partners lobbyists on pending federal budget and appropriations work that the firm and the county—s cities are tracking, and council members and the city—s fire chief raised immediate local concerns including public safety funding, municipal bond tax treatment and potential cuts to grants that support recovery and housing programs.

MMO Partners senior representative John O'Donnell told the council the current congressional process is likely to be "a roller coaster" as lawmakers work on a reconciliation package and FY 2026 appropriations. "Right now we're in the business of finishing up FY25 appropriations. It's a CR," O'Donnell said, referencing the continuing resolution that left FY25 funding levels at FY24 amounts in some programs.

The presentation and ensuing discussion focused on several federal programs and risks the lobbyists and council said could affect Sonoma City services and budgets, including:

- Municipal bonds: Lobbyists warned proposals to eliminate or limit the tax‑exempt status of municipal bonds remain under discussion in Congress and on the House and Senate tax committees. O'Donnell said the firm has been using a University of Chicago study showing how tax‑exempt bonds are used across congressional districts to make the case to members of Congress about the bonds' importance to local governments. Council members asked about downstream effects on public pension funds and the city budget.

- Community Development Block Grant (CDBG) and HOME: The…