Federal funding freeze creates confusion

Kent Boyd: Nothing at the Springfield-Branson National Airport is "woke."

David Mitchell: A funding freeze could be quite devastating in the short run.

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An order to pause all disbursements of federal grants and loans was announced suddenly on the evening of Jan. 27 and while the memo was rescinded two days later, White House officials say the freeze to review all spending is still in place, creating confusion for government offices and nonprofit agencies both locally and nationally.

The Office of Management and Budget, which administers the federal budget, issued a memo from Acting Director Matthew J. Vaeth before later announcing its rescission, according to media reports.

The original memo outlined some objectives of the action as advancing priorities of the administration of President Donald Trump and ending what it called “‘wokeness’ and the weaponization of government.”

“The use of federal resources to advance Marxist equity, transgenderism and Green New Deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” the memo stated.

On Jan. 28, a federal judge blocked the funding freeze just before it was set to take effect, with a hearing scheduled for Feb. 3.

Locally, leaders expressed confusion and concern regarding the status of funding. Springfield Business Journal reached out to affected organizations for insight into the proposed action.

Joel Alexander, manager of media relations for City Utilities of Springfield, said the agency received notification Jan. 29 that a $30 million grant to replace aging natural gas pipes had been paused. As of press time, that notification was still in place.

The CU grant from the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration was announced in September.

“This morning, we received notice from PHMSA that at this time grant funding for all PHMSA projects is paused,” a statement from CU reads. “These are worthwhile projects for our community that we anticipate will resume once we receive further clarification.”

Kent Boyd, public information and marketing manager at the Springfield-Branson National Airport, said that like all airports, SGF relies on federal funding for infrastructure projects, including $5.4 million awarded by the Federal Aviation Administration in February 2024 to replace five of its 10 airplane boarding bridges.

“We’re like everyone else – we’re waiting for clarity, and I would put ‘clarity’ in all-caps,” he said in an interview on Jan. 29. “Everyone’s asking, ‘What does this mean?’”

The way the federal grant system typically works is that grant activities are performed and then the recipient applies for reimbursement, Boyd said, and when documentation of activities is completed, that’s when the money arrives.

The airport, like other agencies and organizations that rely on federal funding, is awaiting a thorough explanation of the funding pause, according to Boyd.

“It seems like there’s a lot of concern about things they identify as woke,” Boyd said. “I don’t know that there’s anything at the airport that’s woke.”

The airport is part of the government structure of the city of Springfield, which received several federal grants in 2024 – among them $28 million in transportation/infrastructure improvement grants, announced in July; $25 million for improvements to the city’s trail system from the Department of Transportation, announced in June; and $1 million in an annual brownfields reduction grant from the Environmental Protection Agency, announced in May.

“There are still too many unknowns to comment intelligently about possible local impacts,” city spokesperson Cora Scott said Jan. 29 via email. “There is now a temporary restraining order on this action, so we are using that time to see what the real impacts might be.”

Springfield Regional Arts Council Executive Director Leslie Forrester said the arts community is worried. She said 40% of the budget of the National Endowment for the Arts is distributed to state agencies. In the Show Me State, the Missouri Arts Council makes grants to local agencies, like SRAC, which further distributes those federal dollars in the community.

“I’m worried about the possibility of withholds to money that’s been promised,” she said.

Like Boyd, she said most grants are administered on a reimbursement basis.

“It’s hard to do programming when you’re not sure if the money you’re planning to spend will be there if you need it,” she said.

Artists and arts organizations are small businesses, Forrester said, and the possibility of a freeze sows chaos.

“We were already concerned about threats of budget cuts,” she said. “If you don’t feel the impacts now, you will eventually.”

David Mitchell, a professor of economics, director of the Bureau of Economic Research and director of the Center for Economic Education at Missouri State University, said he suspected the freeze was an attempt to gain attention for the president’s priorities.

“I honestly suspect this was done as a shock to the system,” he said. “People have been trying to tame in government spending for a long time, and they’re not very good at it. Everyone has their pet projects.”

But the announcement and its resulting shock waves were hard to ignore.

Nonprofits impacted
Federal funding touches myriad aspects of the community, including local nonprofits.

Jaimie Trussell, executive director of Council of Churches of the Ozarks Inc., said the amount of funding her organization receives is hard to tally. About a third of the funding received by the organization, which serves disadvantaged people in numerous ways, comes from federal, state and local grants, with some of the state and local grants funneled from federal sources – so technically, that’s federal funding, she said.

Another third is in food product, much of which is provided by Ozarks Food Harvest, which receives product through the U.S. Department of Agriculture.

“The lines are a little murky right now,” Trussell said.

Trussell said she is not sure what the funding pause – now itself paused as it makes it way through the courts – means.

“There’s so much uncertainty,” she said. “We’re watching; we’re paying attention; we’re committed to our mission to serve the least of these. But the truth is, we really don’t know how it will impact us.”

Asked if she was worried, Trussell pointed to what her organization sees as an office above the Office of Management and Budget and the presidency.

“We’re a faith-based organization,” she said. “God is bigger than everything. If we didn’t have that, I can see where we would be worried.”

For its part, Ozarks Food Harvest issued an announcement Jan. 29 on Facebook saying agencies are required to submit detailed information on any programs, projects or activities subject to the pause to the Office of Management and Budget by Feb. 10. It’s unclear if the recission of the memo negates that information request.

Brandi VanAntwerp, president and CEO of United Way of the Ozarks, said her agency is not a recipient of federal funds, but she has heard concern from leaders of other nonprofit agencies.

“There’s not a lot of news yet,” she said. “We’re very empathetic for what the nonprofit community is going through and what citizens are going to encounter. I just hope the ship can be righted.”

United Way does operate an emergency food and shelter program and helps to administer federal funds for it. VanAntwerp said the agency was preparing to submit an application for the next round of funding, but that activity is paused.

“We’ve asked all of the teams to basically be on hold and wait,” she said. “We’re trying to be as engaged as we can to learn as much as we can.”

Local economic impact
Asked what the impact of the freeze announcement and subsequent developments might mean to the local economy, MSU economist Mitchell said that depends.

“It depends on how extensive it is and how long it lasts,” he said.

Mitchell said the government farms out some of its work to nonprofits or non-government organizations and provides funds as they provide local expertise and person-power.

Nonprofits that perform some of the federal government’s objectives have already hired people and put in place the capital requirements they need to achieve those goals, Mitchell said.

“In the short term, it could be quite devastating,” he said. “In the long term, maybe five or 10 years out, the effects would be a little more muted.”

Mitchell noted, however, that in the long term, something has to change.

“Before COVID, federal spending was $4 trillion, and now it’s $8 trillion, and that’s in a five-to six-year period,” he said. “The current fiscal path that we’re on is not sustainable.”

But Mitchell added that the expenses impacted by the freeze order are not the biggest drivers of federal spending. Those are entitlement programs, like Social Security, Medicare, Medicaid and food stamps.

Meanwhile, supporters of the president’s agenda cite portions of the federal budget that are reportedly spent on initiatives like providing contraception in Gaza or funding a transgender opera in Colombia, Mitchell said, but those expenses do not come close to the entitlement spending.

“These other things are the bigger costs, but they’re harder to tackle than sending condoms to Gaza – that one’s easy,” he said. “The idea is that all these little things add up.”