AML urges OMB to withdraw proposed federal grant overhaul

Proposed changes to federal grant rules could disrupt municipal projects and services across Alaska if finalized this fall, prompting the Alaska Municipal League to file formal comments June 9 asking the Office of Management and Budget to withdraw the proposal entirely.

AML is a voluntary, nonprofit, statewide organization representing 165 cities, boroughs, and unified municipalities covering more than 97 percent of Alaska's residents. The league's letter warns the changes would "increase uncertainty, expand federal agency discretion, add administrative burden, and create new financial risks for local governments," with disproportionate exposure for rural boroughs and Alaska Native communities. If OMB proceeds rather than withdraws, AML asks the agency to "substantially revise" the proposal to protect "merit-based and program-specific award decisions," "timely reimbursement," and a "meaningful transition period."

The proposal would revise the Uniform Guidance at 2 CFR Part 200, the governmentwide framework governing federal awards to non-federal entities and subrecipients. AML's letter argues the changes as written would harm rather than improve grant administration for local governments.

AML calls on OMB to consult "local governments, Tribal governments, state agencies, and federal grant recipients" before finalizing any changes. Outside municipal and infrastructure groups have characterized the proposal as affecting nearly all federal funding streams, underscoring the breadth of what is at stake for Alaska communities.

The proposed rule was published May 29. It would take effect Oct. 1 if finalized. Public comments close July 13. The proposal remains in the public comment stage and has not been adopted as a final rule.

How many Alaska grants or municipalities would be directly affected has not been quantified in available sources.