(Idaho State) As federal grant recipients in Idaho scramble to figure out how a federal freeze on grants and loans will impact their programs, the state Division of Financial Management has instructed agencies not to use state general fund money to offset any losses from a federal freeze on loans and grants.
The freeze, set to go into effect at 3 pm MT on Tuesday, affects the distribution of existing grants and loans, as well as the issuance of new awards. It has the potential to affect trillions of dollars across the nation. It isn’t yet clear how the freeze will impact Idaho, but state agencies, local government entities, and federal grant recipients in the public and private sector reached by Idaho Reports were spending Tuesday morning trying to figure out which of their programs are affected.
On Tuesday morning, Lori Wolff, administrator for the Division of Financial Management, sent a memo to executive agency directors asking them to review the impact of the federal action on their own budgets, and to report any issues to their DFM budget analyst as soon as possible.
In the memo, she also reminded state agencies that they are prohibited from using state funds to offset federal losses. That prohibition includes payroll advances for employee positions funded by federal grants.
“Idaho has prepared for times like these. All federal grants received by state agencies have an approved exit strategy,” Wolff wrote. “Please refer to those strategies in your contingency planning. All state agencies who receive federal grants or assistance that are affected by this Federal action will submit a letter signed by the agency director to DFM outlining an exit strategy in the event federal funds are not available.”
Wolff was not immediately available for comment.
Uncertainty in public and private sectors
Nearly every agency and association director reached for comment on Tuesday told Idaho Reports that they are still trying to figure out how the freeze will impact their programs.
“Major programs like Medicaid and SNAP are carved out,” Idaho Department of Health and Welfare director Alex Adams told Idaho Reports. He also shared an OMB document that says funds “for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused.”
Adding to the confusion, states are reportedly losing access to the Medicaid management portal amid the funding freeze, despite reassurances from the White House that Medicaid is not affected. Those portal issues, however, may be unrelated, according to a message from Adams.
“System maintenance is in progress – we expect it to be resolved shortly,” Adams wrote in a text message to Idaho Reports.
Christine Pisani, executive director of the Idaho Council on Developmental Disabilities, said she and her colleagues in other states had a meeting planned later in the day, and she hoped to receive more information then. Pisani added that she had received assurance that the freeze would not affect ICDD payroll.
Lee Flinn, director of the Idaho Suicide and Crisis Hotline, told Idaho Reports she was also still learning more.
Jason Lantz, director of marketing and communications for the Idaho Housing and Finance Association, said they are actively seeking guidance from their attorneys as well as the U.S. Department of Housing and Urban Development.
“At this point it’s unclear if, or how, the federal funding freeze will affect the programs Idaho Housing and Finance administers,” Lantz wrote in an email to Idaho Reports. “Until there is more clarity, we intend operate normally.”
Laila Kral, executive director of the Local Highway Technical Assistance Council, told Idaho Reports it is unclear how transportation funds from the Biden administration’s Infrastructure Investment and Jobs Act will be affected by the freeze.
“It’s been unclear – because that’s a previous authorization – if that will remain untouched for right now or not,” Kral said. “We’ve got a lot of active projects in the state and a lot of grant projects that are funded that have been awarded, but their agreements aren’t completed, so those cannot move forward. A lot of these communities in Idaho receive these federal grants and it’s unclear if their projects are going to happen.”
Kelley Packer, executive director of the Association of Idaho Cities, said the cities are working to categorize their local infrastructure projects based on funding sources.
“The National League of Cities is monitoring those so that they can give updates on when those funds are released again, if those funds are going away, and what our other options would be in place,” Packer said. “Right now, it’s kind of an unknown. We don’t know if this pause is temporary, or if it’s a pause that will turn permanent for some of these programs. We don’t know what to expect.”
Packer said Idaho’s cities would lose billions of dollars if federal funding is not released.
“You have big transportation projects already going in the state that have federal funds,” Packer said. “Some of it could be emergency service needs, like fire trucks and police fleets and other things. I mean, there’s a lot of different funding sources that the cities reach out for to help subsidize the dwindling property tax money they receive.”
Idaho’s county officials are holding their legislative conference this week. “I haven’t had a chance to dig into the impacts,” Idaho Association of Counties executive director Seth Grigg told Idaho Reports over text.
Individual assistance, including social security, Medicare, food stamps, welfare benefits, and assistance going to individuals is not affected, said White House press secretary Karoline Leavitt during a Tuesday media briefing.
It’s also unclear how the freeze may affect the state’s current budget-setting process for the upcoming fiscal year, happening over the next weeks in the Joint Finance-Appropriations Committee.
“We are awaiting additional guidance from the federal government on what this means for Idaho’s budget process,” committee co-chair Rep. Wendy Horman, R-Idaho Falls, told Idaho Reports on Tuesday morning.
This story will be updated as more information becomes available. Idaho Reports is also compiling information on approximately how much state, local and non government entities receive in federal grants and loans that might be affected by this action.
This article first appeared on Idaho Capital Sun.