With across-the-board sequestration spending cuts scheduled to be imposed on March 1, 2013, Los Angeles County has completed a review of the potential financial threats the sequester poses to the nation’s largest local government agency.

If sequester cuts go into effect, the overall net impact on the County is likely to be small - less than one percent of the $5.408 billion in Federal revenue the County received in Fiscal Year 2012-13. This is because the County receives most of its Federal revenue through low-income mandatory programs which are exempt from sequestration cuts, including Medicaid, Temporary Assistance for Needy Families (TANF), Title IV-E Foster Care and Adoption Assistance, Supplemental Nutrition Assistance Program (SNAP), and Child Support Enforcement.

A number of key public, social welfare programs administered by the County will still be significantly impacted. While the overall Countywide impact of sequestration would be relatively small, three departments are directly affected because they receive a substantial amount of Federal revenue through non-defense discretionary programs which would be subject to the roughly 5.3% across-the-board reduction:

The Community Development Commission: Community Development Block Grant, Public Housing, Section 8 Housing, HOME Investment Partnerships (HOME) Program;

The Department of Community and Senior Services: Workforce Investment Act and Older Americans Act programs; and

The Department of Public Health: Ryan White AIDS Emergency Assistance, Public Health Emergency Preparedness, HIV/AIDS Core Prevention and Surveillance, Tuberculosis Control, Infectious Disease, and other public health programs, including those funded from the Prevention and Public Health Fund.

Other Los Angeles County programs which are exempt from sequestration cuts include surface transportation programs funded from the Highway Trust Fund, the Airport Improvement Program, the Independent Living Program, and child care entitlement mandatory and matching funding.

The ultimate fiscal impact of Federal Fiscal Year (FFY) 2013 sequestration cuts on the County cannot be determined at this time because none of the 12 FFY 2013 appropriations bills, which fund discretionary programs, have been enacted. Instead, all discretionary programs are being temporarily funded under a Continuing Resolution through March 27, 2013.

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