Rescissions Package on the Way, Threats to Federal Programs Continue
The codification of government efficiency efforts to cut waste, fraud and abuse spearheaded by the Department of Government Efficiency (DOGE) will now be tested in Congress. On Tuesday, May 3, President Trump sent a rescissions package to federal lawmakers requesting that they cut foreign aid and public broadcast funding that supports NPR and PBS outlets. Recissions packages, if passed within the required 45-day period, would rescind funding already approved by Congress and can only modify discretionary funding, unlike mandatory spending for Social Security benefits and other expenses. The cuts amount to around $9.4 billion and if passed, advance the work of DOGE to the next stage. The President’s request is not assured passage and must navigate the committee process and go up for a vote in by both the House and Senate. This first package does pave the way for more such packages seeking to cancel previously approved but unobligated or unspent funds.
In the May 22 update, GMA called on cities to protect Community Development Block Grants – or CDBG – and other programs that faced elimination in the President’s FY2026 budget proposal. Funding to the Department of Housing and Urban Development where these programs are housed could be reduced by more than 44%. While the initial sign-on window has passed, your city can still join the letter to protect these critical programs before July when the full Appropriations Committee marks up the transportation and housing spending bill: sign the letter here.
The President’s budget proposal also targets a critical source of water and sewer infrastructure investments for localities nationwide: only $155 million and $150 million respectively for the Clean Water and Drinking Water State Revolving Loan Funds were included, compared to $1.6 billion and $1.1 billion in FY2025. This comes at a time when Georgia cities need $10.3 billion over the next five years for water and wastewater capital projects. Check out the Capital Needs of Georgia’s Cities 2025-2029 resource. In conversations with members of Congress, city officials need to communicate the harmful effects that these funding cuts would mean for communities and urge lawmakers to defend these programs.
Renewing Opportunity Zones
Included in the “One Big Beautiful Bill” that passed the House on May 22 and is now up for debate in the Senate is the renewal of Opportunity Zones: a financing tool created by the 2017 Tax Cuts and Jobs Act to revitalize economically distressed communities by offering investors deferred tax payments. Projects receiving these tax incentives can be residential, commercial, and industrial real estate, infrastructure, and business investments. In Georgia, 260 census tracts were designated as opportunity zones (see map here), and the program is administered by the Department of Community Affairs.
With the existing tax incentives sunsetting on December 31, 2026, Congress is weighing a renewed opportunity zone program for 2027 through 2033 with several changes that seek to address shortcomings from the first iteration:
- States continue to nominate areas for designation with approval by the Internal Revenue Service but at least one-third of tracts must be in entirely rural communities.
- Median family income of qualifying census tracts must not exceed 125% of the state or metropolitan median – tightening the definition of “low-income communities” to avoid areas that are already seeing investment or revitalization.
- Increase tax incentives for investments in rural properties or businesses.
- New reporting obligations to improve transparency and provide a better measure of impact.
Read more in an analysis of the “OZ 2.0” proposal here. The prioritization of rural areas could spur investment in areas that need it most. At the same time, the rise of data centers to keep up with growing digital demands has also entered the opportunity zone conversation as a way for communities that are economically stagnant to attract investment.