Congress to President: Thanks, But No Thanks

Last week, President Obama released his last budget proposal. However, it got the cold shoulder from Congress with Speaker Paul Ryan (R-WI) even going so far as saying that the budget is “a progressive manual for growing the federal government at the expense of hardworking Americans.” In fact, Congress has announced it has no plans to even consider it and the Budget Committees won’t entertain hearings from the White House on it, which is a break in tradition.

Congress has an abbreviated schedule this year, with the election looming. So, it will be interesting to see if they can prepare and negotiate their own budget, or if we can expect a less-controversial “Continuing Resolution” from the current year budget come this summer/fall.

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at sminnick@mml.org or 517-908-0301.

 

Breakdown of President Obama’s Final Budget

Last week, President Obama released his final budget proposal and there are significant notable items for local governments. Below is a brief summary of some key items. For the entire budget you can visit the White House’s online resource, which is a pretty neat tool for exploring the proposal.

The President’s budget totals a record $4.1 trillion. Approximately $1.2 trillion is discretionary, with that being split in half between military spending and domestic programs. One of the biggest items that stands out is the $320 billion influx of revenue over 10 years from a $10 per barrel oil tax, which would equate to about $.25 per gallon. But this funding wouldn’t just go to building roads. In fact, the President’s proposal puts a much greater emphasis on transit and multi-modal transportation, increasing the spending ratio of highway to transit spending from 4 to 1 to 2 to 1 with $17 billion for FY 2017 under the “21st century Clean Transportation Plan.” Specifically, it would provide $20 billion above current levels to reduce traffic and provide new ways for families to get to work and school, $3.7 billion in grants for high speed rail, and $5.9 billion for safer, more efficient transit systems. It also allocated another $725 million in TIGER (Transportation Investment Generating Economic Recovery) grants and would make it a mandatory, ongoing program rather than the existing annually-authorized program.

In the Housing, Community and Economic Development budget, the proposal would expand and make permanent the New Markets Tax Credits, which promote investments in low income communities. HUD’s Fair Housing Initiatives Program would see a $6 million increase. There would be $15 million in additional funding for housing choice vouchers and $215 million for Economic Development Assistance Programs, which fund a variety of local and regional programs. However, Community Development Block Grants (CDBG) would see a slight decrease in funding – $2.8 from $3 billion.

The Department of Justice budget would be essentially flat, but there programs that would better benefit cities tucked within it. For example, a new $500 million for the 21st Century Justice Initiative program to help local governments reduce crime and build community trust with law enforcement. An additional $74 million is proposed for the COPS program (Community Oriented Policing Services) and a variety of other smaller local-government focused programs.

In the Environmental Protection Agency budget, there may be a nod to the Flint water crisis in the President’s budget via increased funding in the Drinking Water State Revolving Loan Fund of $157 million. However, this is offset by a decrease in the Clean Water SRF of $414 million. There are also modest increases in both the Brownfields Program and the Superfund program, both programs used for the restoration and redevelopment of abandoned or under-utilized industrial and commercial sites, which are frequently contaminated. On the energy front, the President proposed $2.9 billion to support a range of strategies aimed at reducing US reliance on oil, increasing energy affordability and increasing environmental responsibility.

The President’s budget is the first step in the process, and now it is up to Congress to determine if they will debate any of it or move forward with their own, or simply punt to a Continuing Resolution.

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at sminnick@mml.org 517-908-0301.

Congress Passes Ban on Internet Access Taxes, Will Action on Internet Sales Tax Parity Be Next?

Last week, the  Senate passed the Trade Facilitation and Trade Enforcement Act of 2015, H.R. 644, which included a provision that will make permanent the temporary ban on state and local government’s authority to tax internet access (the Permanent Internet Tax Freedom Act or PITFA). The House has already supported the measure, so the bill is now headed to the President for his signature, which the White House has indicated he will provide.

There are a handful of states in which local governments levy such a tax, and the bill also eliminated their ability to continue to do so. While Michigan is not one of them, it is relevant because this issue was frequently tied together in a leverage-sort-of-way to help encourage Congress to act on online sales parity – known now as the Marketplace Fairness Act (S. 698).

And indeed, the bill was supported by many Congressional members in exchange for a commitment from Senate majority leadership to provide floor debate time on Marketplace Fairness later this year. The League will be discussing this issue as a priority in our Congressional visits in Washington DC in a few weeks.

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at sminnick@mml.org or 517-908-0301.

New Federal Transportation Bill, FAST Act, Becomes Law

President Obama signed the FAST (Fixing America’s Surface Transportation) Act yesterday, making the first long term transportation bill in a decade official. There are some big wins for local governments within the new law, which is worth approximately $305 billion. A good, comprehensive 13 page summary of the law can be found here.

The biggest win for local communities, quite simply, is that it is a 5 year arrangement and local leaders will not have to wonder what will happen every six months under more extensions. The League had been advocating first and foremost for a bill that expands beyond the next fiscal year to enable more long-term planning for transportation projects. Specifically, there are many other significant victories being highlighted in the bill, which spans 1300 pages.

The Surface Transportation Program is now the Surface Transportation Block Grant Program and increases the amount allocated to local leaders from 50% to 55% over the length of the bill and gives locals greater flexibility in how the funds are spent.

The Surface Transportation Block Grant Program would now house the Transportation Alternatives Program, and is proposed to be increased from $835 million to $850 million. And the bill gives Metropolitan Planning Organizations additional flexibility in how to spend their funds.

Transit Oriented Development would be eligible for the TIFIA program and the minimum project size threshold would be lowered to $10 million, expanding the program significantly for smaller projects.

The Michigan delegation was mostly supportive with both Senators voting yes and twelve of the fourteen Representatives voting for the bill as well. Congressmen Amash and Huizenga were the two no votes.

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at sminnick@mml.org or 517-908-0301.

Congress Poised to Pass Long-Term Transportation Package This Week

For the first time in ten years, Congress is on the verge of passing a long-term transportation package and there are some big wins for local governments within the new deal. The committee of House and Senate negotiators have agreed to the new bill worth approximately $305 billion, entitled the FAST Act (Fixing America’s Surface Transportation), and both Chambers are expected to pass it by the deadline of this Friday, December 4th. The biggest win for local communities, quite simply, is that it is a 5 year arrangement and local leaders will not have to wonder what will happen every six months under more extensions. The League had been advocating first and foremost for a bill that expands beyond the next fiscal year to enable more long-term planning for transportation projects. Specifically, there are many other significant victories being highlighted in the bill, which spans 1300 pages.

The Surface Transportation Program is now the Surface Transportation Block Grant Program and increases the amount allocated to local leaders from 50% to 55% over the length of the bill and gives locals greater flexibility in how the funds are spent.

The Surface Transportation Block Grant Program would now house the Transportation Alternatives Program, and is proposed to be increased from $835 million to $850 million. And the bill gives Metropolitan Planning Organizations additional flexibility in how to spend their funds.

Transit Oriented Development would be eligible for the TIFIA program and the minimum project size threshold would be lowered to $10 million, expanding the program significantly for smaller projects.

The bill is being paid for by a series of sources, not including any changes to the federal gas tax. Some of the sources include the Federal Reserve surplus account, selling a portion of the Strategic Petroleum Reserve and cutting the dividend the Federal Reserve pays to some member banks.

We will notify you as soon as the bill has cleared both the House and Senate later this week. We’ll know more details of the bill in the coming days, but the changes identified so far show significant improvement for local governments and their support for transportation infrastructure by the federal government. We’re pleased after all these years to be on the verge of such a victory!

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at 517-908-0301 or sminnick@mml.org.

Budget and Speaker Action in U.S. House of Representatives

The United States House of Representatives just took some significant action on critical issues which had been looming. They passed legislation which suspends the debt ceiling until March of 2017 and lifts budget caps set by sequestration by $80 billion through September 2017. That increase will be split evenly between discretionary spending and non-discretionary spending. This could result in positive outcomes for local government programs in the coming year and a half. Senate members have sounded mostly positive about the deal. Essentially at the same time, they elected Paul Ryan (R-WI) to serve as the next House Speaker, ending weeks of turmoil within the GOP caucus. 

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at 517-908-0301 or sminnick@mml.org.

Possible Federal Debt Limit and Budget Deal This Week

A deal to increase the federal debt limit and set some federal budget figures has been struck by Congress and the President, according to many sources out of Washington DC. The deal would raise the debt ceiling through March 2017 and would lift sequestration caps in the budget for fiscal years 2016 and 2017. Currently it appears that long term federal transportation solutions are not included in the agreement. While the plan has not been made public yet, it is expected to be within the next day or two. Congress has only a few days left to act before the current federal debt limit is reached, so time is winding down for an agreement. Additionally, it is believed that there is a desire by many in the Republican caucus to strike an agreement before a new Speaker takes the helm.

Join #CitiesLead2016 to Encourage Presidential Candidates to Address City Issues

`The National League of Cities has launched Cities Lead 2016, which is a new platform for local officials to engage with Presidential candidates on important city issues. By signing up here, you can receive updated information on the campaign and send a message that you want to hear candidates address key issues that impact cities and villages such as transportation, economic development issues and public safety. On the NLC’s website for the campaign, you can download a brochure on the issues, learn about all the candidates and find additional resources. Please help us get local issues into the Presidential spotlight!

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at 517-908-0301 or sminnick@mml.org.

Transportation Sees Action in Congress

The House Transportation and Infrastructure Committee voted this week to support a six year federal transportation bill, the Surface Transportation Reauthorization and Reform – STTR – Act of 2015 (H.R. 3763), which has provisions that are seen as being very favorable to local governments – similar to that of the DRIVE Act passed by the Senate prior this summer. This includes incremental growth in local government funding under the Surface Transportation Program and preserving local authority to allocate funding for multi modal transportation networks under the proposed STP Set Aside. One major difference however, is that the House proposal does not provide for a funding stream for the nearly insolvent Highway Trust Fund, whereas the Senate plan did have three years of funding proposed. But this step is seen as important and positive for getting a long term transportation plan on the books soon. While there may be another short term extension before the House and Senate can resolve their proposals and agree on how to fund them – the hope is that this deal can be in place by the holidays.

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at 517-908-0301 or sminnick@mml.org.

Deadline to Raise Federal Debit Limit Moved Up

This week, US Treasury Secretary Jack Lew told Congress that the deadline for the United States running out of cash to pay its bill is now November 3rd. There are only 10 legislative days left before the deadline, and the House still has not determined who they will be electing as a new Speaker. There are many in doubt that a deal will be reached by the deadline, which has many financial analysts starting to predict a variety of negative impacts, including a downgrading of the federal credit rating and a downward spiral of consumer confidence.

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at 517-908-0301 or sminnick@mml.org.