Federal funding freezes and cuts seem to be causing major disruptions to nonprofits, federal agencies and even farmers, but the impact seems to be less for local government budgets.
Augusta County Administrator Tim Fitzgerald told AFP that the county receives less than 1% of its budget from federal funds so the sweeping freezes initiated by the Trump administration will likely have “little impact” on day-to-day operations.
“The federal freeze will likely have little impact on our general fund due to the small percentage of federal funding we receive,” Fitzgerald said. “I am not aware of any projects that are directly affected by the federal freeze.”
Almost 50 percent of federal funding is for payment in lieu of taxes, estimated at just under $600,000 for fiscal year 2025, he said. Cities and counties cannot collect tax revenue on federal lands but are often reimbursed to offset losses in property tax revenues and for services provided on that land.
“We have noticed a slow down on how fast grant drawdowns are processed but they are still being paid,” he said.
The largest federal funding line item is a COSSUP grant for the Commonwealth Attorney’s office which received funding to implement a new case management program to connect high-risk, felony-level offenders with substance use disorder resources prior to them being charged. The project is a partnership with the Augusta County Sheriff’s Office, Blue Ridge Court Services, Valley Community Services Board, Blue Ridge Criminal Justice Board and the Institute for Reform and Solutions.
Fitzgerald said he doesn’t know about the potential impact on the school system, because he is not actively involved in their budget. There could potentially be cuts to the school breakfast and lunch programs as well as Head Start, according to experts.
The City of Staunton told AFP they are closing monitoring the situation but have not encountered any funding issues.
Waynesboro agreed. City Manager Mike Hamp said “it’s business as usual” for now.
The spending pauses initiated by the administration are causing confusion and uncertainty in many sectors outside of local government.
Local farmers have reported delays in reimbursements related to USDA grants.
The Community Foundation of the Central Blue Ridge launched an online survey for nonprofit organizations to share details on any federal funding they receive. The goal is to address any deficiencies that might result in the community if organizations are forced to downsize or close altogether.
The survey is available online.
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Crystal Graham
