Congress Prepares for Final Vote on Tax Plan

The joint House-Senate conference committee announced their final reconciliation of the federal tax reform proposal on Friday.  Each chamber is expected to vote on the conference report early this week, where the bill is expected to receive enough support to make it to the President’s desk.

The League has been working with the National League of Cities and our delegation throughout the fall to advocate for changes to a number of provisions within the overall reform proposal that could impact communities in Michigan.  While a number of changes that we advocated for have been included in this final version, there are still areas of concern for Michigan municipalities.

After an initial review of the 503-page bill by NLC staff, the conference report on the Tax Cuts and Jobs Act (H.R. 1) does the following;

  • Publicly Issued Tax-Exempt Municipal Bonds: Preserved throughout the whole process.
  • Private Activity Bonds (PABs): Conference report sided with Senate version and preserved PABs.
  • Advance Refunding (ARs) Bonds: Conference report had no difference to reconcile. Tax exemption for interest earned on ARs would terminate on 12/31/2017.
  • New Markets Tax Credits (NMTC): Conference report sided with Senate version and preserved NMTC until their authorization normally expires.
  • Historic Tax Credits (HTC): Conference report sided with the Senate version and preserves the 20% credit for rehabilitation costs to certified historic structures, but eliminates the 10% credit for pre-1936 structures.
  • State and Local Tax (SALT) Deduction: Conference report provided a new modification to SALT. Taxpayers would be able to deduct up to $10k in property taxes combined with either income or sales taxes.  

House Actions: The House Rules Committee is expected to consider the bill on Monday (12/18) and possibly vote on it by Tuesday (12/19).

Senate Actions: The Senate aims to hold 10 hours of debate and a vote on Wednesday (12/20).

A continued thanks to all of you who have sent letters, called members of Congress and helped make sure city priorities have not been ignored.

Feel free to reference www.nlc.org/TaxReform for more information, or reach out with any questions or concerns. Stay tuned.

 

Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and chackbarth@mml.org.

 

 

Federal Tax Reform Update – US Senate Proposal

Staff from the National League of Cities shared the following information with MML and other state leagues over the weekend, following the Senate’s release of their proposed version of tax reform…

Late Thursday, the Chairman of the Senate Committee on Finance Orrin Hatch (R-UT) released the Chairman’s Mark of his Tax Cuts and Jobs Act.  The Senate Committee on Finance is expected to markup this legislation on November 13, 2017 at 3:00 p.m. We urge you to contact your congressional delegation, especially the Senate Finance Committee (www.finance.senate.gov/about/membership).

After 4 days, the House Ways and Means Committee concluded committee markup on Thursday as well.  A floor vote on H.R. 1 is expected next week, most likely on Wednesday or Thursday.     

In the House, there are still nine Republicans who are opposed to the tax bill because of its treatment of SALT: New Jersey Reps. Leonard Lance, Frank A. LoBiondo and Christopher H. Smith; New York Reps. Peter T. King, Lee Zeldin, Elise Stefanik and Dan Donovan; and California Reps. Darrell Issa and Tom McClintock. Please thank those Members of the House who are standing strong with us in writing or via social media.

The House and Senate leadership have both stated that they expect to go to conference to reconcile differences in the bills, but they could bypass going to conference entirely.  Either way, they hope to send a final bill to the President for his signature in December. Below, find quick summary on bill differences.

 

  House Bill – Final As of Mark Up Senate Bill – No Markup
Tax Exempt Municipal Bonds Retained (not included in bill) Retained (not included in bill)
Private Activity Bonds Eliminated Retained
Non-refundable Bonds Eliminated Eliminated
State and local income and sales taxes Eliminated (except for those attributable to business income) Eliminated (except for those attributable to business income)
Property taxes Retained (up to $10,000) Eliminated
Mortgage interest Retained (but only on debt up to $500,000 for new loans; no interest on second home, no interest on new home equity loans) Retained (but no deduction on home equity loans)
Personal casualty losses Eliminated (except for federal declared disaster areas) Eliminated (except for federal declared disaster areas)
Nonqualified deferred compensation arrangements Eliminated Eliminated
Historic Tax Credits Eliminated Retained (but reduces their value)
New Mark Tax Credits Eliminated Retained (until current authorization expires in 2 years)
Work Opportunity Tax Credits Eliminated Eliminated
Low Income Housing Tax Credits Eliminated Retained

Today, the Chairs of House Municipal Finance Caucus released an oped to protect bonds and tax credits. www.washingtonexaminer.com/…

Also, NLC was in US News and World Report on tax reform www.usnews.com/news/the-report/articles/2017-11-10/…

We will continue to challenge any plan that threatens the tax exemptions for bonds used to finance critical infrastructure, eliminates the state and local tax deduction that protects local decision making and erases tax credits that strengthen communities.

 

 

Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and chackbarth@mml.org.

Congress Releases Details of Federal Tax Reform Proposal

Congress released the following details of the proposed federal tax reform legislation:

– Ways & Means Cmte Tax Reform Highlights

– bill text  https://waysandmeansforms.house.gov/uploadedfiles/bill_text.pdf

Following NLC’s lead, MML staff have been talking with Michigan delegation members about preserving the State & Local Tax deduction (SALT) within the federal tax code.  The version of the bill released today retains a portion of that deduction for taxpayers to continue deducting local property taxes, but eliminates the deduction for local income taxes.

NLC leaders released the following statement in response to today’s announcement: http://www.nlc.org/article/tax-reform-bill-an-affront-to-local-control

You can view NLC’s State and Local Tax Deduction resource page here: http://www.nlc.org/SALT.

Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and chackbarth@mml.org.

MSP Announces Hazard Mitigation Assistance Grant Opportunity

Attached is the official Notice of Funds Availability (NOFA) announcement for the open application period for two Federal Emergency Management Agency (FEMA) mitigation grant programs for FY 2017.  This funding announcement includes the Flood Mitigation Assistance (FMA) Program and the Pre-Disaster Mitigation (PDM) Program.  Both of these FEMA hazard mitigation grant programs are now under one umbrella known as Hazard Mitigation Assistance (HMA).  FEMA has unified all of the mitigation grant programs under one set of guidance documents.  The two guidance documents (linked below) are dated 2015 because there have been no changes to the guidance since last year.

The information contained in the announcement below include limited time lines and requires a timely response.

Deadlines:
· NOIs must be submitted to the MSP/EMHSD by no later than September 1, 2017.
· eGrants applications (initial draft) are due to the MSP/EMHSD for review by October 13, 2017.
· After review and revision, eGrants applications are due to FEMA by November 14, 2017.

HMA funds can be used for the implementation of hazard mitigation projects as well as the development or update of local hazard mitigation plans.  Many of the FEMA approved local mitigation plans across Michigan will be expiring within the next two years.  The available HMA funding offers an excellent opportunity for communities to use grant dollars to update their local hazard mitigation plans.

IB 17-01 – HMA Funds Available
HMA_Guidance_022715_508
HMA_Addendum_022715_508

Joel Pepper
Asst. State Hazard Mitigation Officer
Emergency Management and Homeland Security Division
Michigan State Police
TX: 517-284-3955

Physical Address:
7150 Harris Drive
Dimondale, Michigan 48821

Mailing Address:
PO Box #30634
Lansing, Michigan  48909

 

Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and chackbarth@mml.org.

Federal Budget: Fight the Cuts Toolkit, Take Action Now

The Fiscal Year 2018 budget process continued this May with the release of the administration’s full budget proposal. The proposal, which cuts more than $54 billion in funding for domestic programs that communities rely on, would have major consequences for every city and village in Michigan – regardless of size, location or economic outlook. The administration’s proposal is just the starting point. Congress is currently working to draft their budget and appropriations bills. Now is the time for leaders across this state to come together and send a unified message to Congress that we need a partner who understands the impact of continued federal investment in communities.

We are proud to be working with the National League of Cites to provide you with a Toolkit that includes the following:

The Michigan Municipal League, in partnership with the National League of Cities, is prepared to fight every step of the way — but we’re going to need your help. Use this action guide to learn how the proposed budget cuts could impact your community and how you can advocate for continued federal investments.

John LaMacchia is the Assistant Director of State and Federal Affairs for the League handling transportation, infrastructure, energy and environment issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

Track Federal Funding for Programs Important to Cities and Villages

In its Fiscal Year 2018 budget plan, the administration proposed an unprecedented $54 billion in cuts to federal funding for domestic programs important to cities and towns. Since then, members of the House Appropriations Committee have met to debate funding levels to agencies and specific programs, with some important changes.

As of Monday, July 17, the Committee has finished work on half of the twelve appropriations bills needed to fully fund the federal government. We are very please that  funding for the Great Lakes Restoration Initiative was fully restored. The Committee trimmed CDBG funding by $100 million, down to $2.9 billion, which is a drastic reversal from the complete elimination the administration suggested. Other areas of concern still remain though as TIGER grants continue to face complete elimination.

Through our ongoing partnership with the Nation League of Cites they have put together a Federal Budget Tracker for FY18 that takes a detailed look at some of the most important federal programs to cities, and the current state of play for their funding.To learn more on each spending bill please click Federal Budget FY18 Budget Tracker.

John LaMacchia is the Assistant Director of State and Federal Affairs for the League handling transportation, infrastructure, energy and environment issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

President Trump’s Fiscal Year 2018 Budget Proposal is a $54 Billion Disinvestment in Cities

The Administration recently released their fiscal year 2018 budget proposal. the League has been working with the Nation League of Cities to identify the cuts that will affect cities across Michigan and the list is extensive. The total cuts equal a $54 billion disinvestment in communities across this country. As a result, not a single city, village or town will be better off if this budget were to be signed into law.

Key programs the budget eliminates funding for are Community Development Block Grant program (CDBG), the Great Lakes Restoration Initiative, TIGER grants and he Low Income Home Energy Assistance Program (LIHEAP), just to name a few.

These cuts would have a devastating result on not only on local budgets but also on the quality of life for all our residents. It is imperative that we weight in with our voice and inform Congress that these cuts are unacceptable. The League will be proactively reaching out to express our concerns and we need you to do the same. Below you will find a department by department list of identified cuts that could negatively impact your communities.

  • Agriculture
    • Eliminates $500 million for the Water and Wastewater loan and grant program for rural water projects, which hurts small cities that utilize the program to maintain and improve water systems, sanitary sewage disposal, and storm water drainage efforts.
    • Eliminates the Rural Business Cooperative Service ($95 million).
    • Eliminates and consolidates rural economic development and infrastructure grant programs under a new Rural Economic Infrastructure Grants program.
    • Eliminates $61 million for the Department of Agriculture’s (USDA) rural single family housing direct loan program.
    • Cuts the Supplemental Nutritional Assistance Program (SNAP) by $4.637 billion, encouraging a re-balancing of the Federal/State partnership.
  • Commerce
    • Eliminates the Economic Development Administration ($221 million), which impedes distressed cities from receiving funding support for public works grants, city planning strategies, and research and technical support
    • Eliminates the Minority Business Development Agency ($26 million), which could slow the growth of successful minority-owned businesses nationwide by defunding programs useful in the planning, marketing, and managing processes.
    • Cuts $250 million from coastal research programs, which forces cities to pause or ease-away from preparation efforts for rising sea levels and worsening storms.
    • Eliminates the Manufacturing Extension Partnership, which hurts small- and medium-sized businesses that are reliant on this public-private partnership to foster job growth and maintain stability.
    • Cuts $2 million (18%) from the BroadbandUSA program, which provides technical assistance to state and local governments on broadband development, deployment, and financing.
  • Education
    • Eliminates 21st Century Community Learning Centers (21st CCLC; $1.2 billion), which negatively impacts children in general, and more specifically children in impoverished areas, by cutting afterschool and summer programs.
    • Cuts $2.3 billion from Title II, Part A of the Every Student Succeeds Act (ESSA), which harms teacher quality and professional development efforts. The program is weighed heavily towards communities with high poverty.
    • Proposes a $1.4 billion investment in school choice, including a $167 million increase for Charter School Program grants, $250 million for a new private school choice program and $1 billion for Title 1 to ensure “student-based budgeting,” which follows the student to their school of choice.
    • Proposes level funding ($12.7 billion) for special education grants through the Individuals with Disabilities Education Act (IDEA).
  • Environmental Protection Agency
    • Proposes level funding for the Clean Water and Drinking Water State Revolving Funds (SRF) – $1.393 billion for the Clean Water SRF and $863 million for the Drinking Water SRF, for a total of $2.257 billion.
    • Proposes level funding for WIFIA, a loan and loan guarantee program for large water infrastructure projects, at $20 million.
    • Cuts $326 million from the Superfund program and $11 million from the Brownfields program. Both programs help communities clean up polluted lands and revitalized abandoned and vacant properties.
    • Eliminates funding for regional ecosystem restoration efforts like the Great Lakes Restoration Initiative, Chesapeake Bay Watershed Initiative and Puget Sound, while maintaining strict EPA pollution reduction requirements, for a total cut of $427 million.
    • Eliminates funding for the Clean Power Plan, international climate change programs, climate change research and partnership programs, such as Energy Star, for a total cut of $100 million.
  • Energy
    • Cuts $1.4 billion from the Office of Energy Efficiency and Renewable Energy and refocuses the priorities on early-stage R&D rather than development/deployment of energy efficiency and renewable energy technologies.
    • Eliminates the Weatherization Assistance Program ($220 million), which stops states from improving the energy efficiency of low income households.
    • Eliminates the State Energy Program ($50 million), which strips state and local energy efficiency and renewable of energy programs.
  • Health and Human Services
    • Eliminates the Low Income Home Energy Assistance Program (LIHEAP), totaling $3.384 billion, which helps low-income families with energy costs.
    • Eliminates the Community Service Block Grant (CSBG), totaling $714 million, which diminishes available funding directed towards alleviating poverty.
    • Eliminates the Social Services Block Grant (SSBG), totaling $1.393 billion, which is an important, flexible funding source that allows States and Territories to tailor social service programming to their population’s needs.
    • Reduces the Temporary Assistance for Needy Families (TANF) block grant program by 10% and eliminate the TANF contingency fund, totaling $1.785 billion.
    • Proposes reforms to Medicaid by giving State choice between per capita caps and block grants beginning in 2020.
  • Homeland Security
    • Cuts State and Local Homeland Security Grant Programs by 25% to $349 million, the Urban Area Security Initiative (UASI) Grant Program by 25% to $449 million, the Emergency Management Performance Grants by 20% to $279 million, and the Pre-Disaster Mitigation Fund by 60% to $39 million.
    • Eliminates the National Flood Insurance Program’s Flood Hazard Mapping Program, which puts many cities and towns that rely on maps when building homes outside of flood zones at risk.
    • Proposes a 25% non-Federal cost match for FEMA preparedness grants, which will impact small- and medium-sized cities. Smaller cities and towns will not be able to meet the 25% cost match, which will likely lead to their exclusion from FEMA preparedness funding.
  • Housing and Urban Development
    • Eliminates the Community Development Block Grant program, totaling $3 billion in cuts, which hurts the most vulnerable communities that are already in distress.
    • Eliminates the HOME program, totaling $950 million in cuts, which decreases affordable housing options in cities.
    • Eliminates the Choice Neighborhoods program, totaling $125 million in cuts, which decreases opportunities in communities with public and federally subsidized housing.
    • Reduces Rental Assistance Programs by $1.9 billion. Rental Assistance Programs help approximately 4.5 billion very low income households.
    • Eliminates the Self-Help and Assisted Homeownership Opportunity Program, the Section 4 Capacity Building for Community Development and Affordable Housing program, and the rural capacity building program ($56 million).
  • Independent Agencies
    • Eliminates 18 independent agencies, including the Appalachian Regional Commission, Delta Regional Authority, Northern Border Regional Commission, Denali Commission, Corporation for National and Community Service, Institute for Museum and Library, and Neighborhood Reinvestment Corporation.
  • Justice
    • Reduces Byrne Justice Assistance Grants by 25% to $239 million and eliminates the Byrne Criminal Justice Innovation Program.
    • The budget also reduces Justice Information Sharing Technology Program by 50% to $34 million, Juvenile Justice Grant Programs by 14% to $230 million, Second Chance Act Grant Program by 27% to $43 million, School Safety Initiative by 74% to $18 million, Prescription Drug Monitoring Program by 8% to $11 million and eliminates the State and Local Gun Violence Reduction program and the State Criminal Alien Assistance Program (SCAAP).
    • The budget would increase COPS Hiring Grants by 10% to $124 million and create a new $65 million Protect Safe Neighborhoods Block Grant Program.
    • The budget also contains proposed language for Congress to consider that would require DOJ and DHS to withhold grants from sanctuary cities that do not comply with 8 U.S.C. 1373 or honor DHS detainer request aliens suspected to be in the country unlawfully.
  • Labor
    • Eliminates the Senior Community Service Employment Program (SCSEP), totaling $434 million in cuts, which aims to transition low-income, unemployed seniors to unsubsidized jobs.
    • Cuts funding for the Workforce Innovation and Opportunity Act (WIOA) job training and employment services programs by $1.341 billion (39%).
  • Treasury
    • Reduction of $500 million (4.1%). The IRS accounts for 97% of Treasury’s discretionary budget, which would have a lasting impact on the agency.
    • Eliminates new grants to Community Development Financial Institutions ($210 million), which expands availability of credit, investment capital, and financial services in under-served communities.
  • Transportation
    • Eliminates the TIGER grant program ($500 million), which has funded countless roads and transit projects since its inception in 2009.
    • Eliminates $630 million from long distance Amtrak routes.
    • Cuts Army Corps of Engineers discretionary budget by $1 billion (17%).
    • Eliminates $928 million from the Federal Transit Administration’s New Starts grants program.
    • Cuts $175 million from the Essential Air service, which subsides commercial flights to rural airports.

John LaMacchia is the Assistant Director of State and Federal Affairs for the League handling transportation, infrastructure, energy and environment issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

President Trump’s Plan to Rebuild America’s Infrastructure

Last week President Trump hosted a “White House Infrastructure Summit” It was a gathering of the Administration and local leaders from across the country. At this summit the President laid out his vision for future investment in infrastructure. You can view the President’s official plan for infrastructure by clicking here.

The White House rolled out ideas on how to fix our nation’s ailing roads, bridges, schools and water systems in their version of “Infrastructure Week.” Building off the $200 billion in federal investment included in President Donald Trump’s FY2018 budget, ideas such as privatizing air traffic control, streamlining the permitting process, and improving inland waterways were all  highlighted by the president.

While proponents argue the infrastructure proposal would deliver greater control to states and local governments, the proposal appears to back down on a direct investment in infrastructure that cities and the nation desperately need. The result is a mixed bag for cities — some crucial programs shored up, major changes to regulations, and a great deal of funding uncertainty for the future.

The League will continue to stress the following points in our advocacy efforts for increases investment in infrastructure at the federal level.

  • Protect the tax exemption for municipal bonds
  • The need for direct funding to cities and villages
  • Ensure that federally funded programs that communities use to leverage additional investments continue
  • Any infrastructure package needs to include roads, bridges, transit, water, electric and broadband

Please consider reaching out and expressing the importance of investing in infrastructure and the need for that investment at the local level.

John LaMacchia is the Assistant Director of State and Federal Affairs for the League handling transportation, infrastructure, energy and environment issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

Congress Reaches Short Term Budget Deal, Administration Proposes Tax Overhaul

Congress has reached a short-term budget deal that adheres to existing overall spending levels and, for the most part, preserves funding for city priorities. Due to the advocacy efforts of the League, NLC and many other stakeholders, Congress did not adopt any of the mid-year cuts that had been proposed by the Trump Administration. This ensures cities will not face unanticipated shortfalls or systematic clawbacks of spent-out FY17 federal funds.

Key programs the budget deal maintains funding for are CDBG and the Great Lakes Restoration Initiative. Specific program outcomes are presented below and indicates whether funding was Decreased, Preserved, or Increased.

Transportation

  • TIGER: Preserved
  • Federal Transit Administration Capital Investment Grants: Increased
  • Essential Air Services: Preserved

Housing

  • CDBG: Preserved
  • Homeless Assistance: Preserved
  • Housing Assistance Vouchers: Preserved

Labor / Education / Health

  • AmeriCorps (Corporation for National Community Service): Preserved
  • IMLS (Library Services): Increased
  • Job Corps: Preserved
  • LIHEAP (Low-Income Housing Energy Assistance Program): Preserved
  • SSBG (Social Services Block Grant): Preserved
  • CCDBG (Child Care Development Block Grant): Increased
  • 21st Century Community Learning Centers: Increased
  • State Response to the Opioid Abuse services: Increased to $500 million

Interior-EPA

  • Clean Water and Drinking Water SRFs: Preserved
  • Brownfields: Preserved
  • Superfund: Preserved
  • WIFIA: Preserved
  • Great Lakes Restoration Initiative: Preserved

Energy-Water

  • Department of Energy Office of Energy Efficiency and Renewable Energy: Increased

Commerce

  • Economic Development Administration Funding: Increased
  • U.S. Census: Increased

Justice / Homeland

  • New funding for countering heroin and opioid epidemic: Increased to $103 million
  • State Local Law Enforcement Grants: Decreased $128 million to $2.08 billion
    •  Byrne JAG: Decreased by $150 million to $1.26 billion
    •  Community Oriented Policing (COPS): Increased
    • Juvenile Justice: Decreased by $23 million to $247 million
    • Violence Against Women Act: Increased
  • State and Local Homeland Security grants: Preserved
    • Urban Area Security Initiative: Increased
    • Flood Hazard Mapping and Risk Analysis: Decreased by $10 million to $178 million
    •  Predisaster Mitigation Fund: Preserved
    • Assistance to Fire Fighters and Staffing for Adequate Fire and Emergency Response (SAFER) grants: Increased
  • Sanctuary Cities: No change to current law

Agriculture

  • Rural Water and waste Water: Preserved
  • Rural Housing: Increased

Additionally, the Trump Administration released their framework for tax reform. In a call with NLC staff late last week, the outline provided for the Administration’s tax overhaul proposal appears to eliminate all state and local income tax deductions, only preserving the charitable and mortgage exemptions.  What was not included in the proposal was any mention of eliminating the tax-free status of municipal bonds.  NLC staff view this omission as a big victory and their contacts in the White House have indicated that municipal bond tax status will not be addressed within a tax reform conversation.  Instead, this issue will be included in the infrastructure spending plan that will likely be a September conversation for the Administration.

The League will continue to work with NLC to show our support for local government priorities in the areas of tax reform, infrastructure and the federal budget.

John LaMacchia is the Assistant Director of State and Federal Affairs for the League handling transportation, infrastructure, energy and environment issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

FCC Threatens to Limit Local Land Use Authority on Wireless Siting

The National League of Cities is requesting the help of Michigan Communities.

Late last month, the Federal Communications Commission (FCC) issued a public notice seeking comment on two topics that could shape the future of city control over their rights-of-way. The FCC’s Wireless Bureau requested public comment on how to streamline the deployment of small wireless facilities, primarily through potential changes to local land-use ordinances, and comment generally on a petition filed by infrastructure company Mobilitie regarding local government rules and procedures.

The public notice raises several major concerns for cities. The first is that the FCC wishes to use this proceeding to reexamine the facts of the decisions made in its 2009 and 2014 rule-makings on local wireless facilities siting, questioning whether the evidence presented by local governments during those proceedings is still valid. Specifically, the notice questions the amount of time needed by local governments to process wireless siting applications for small-cell facilities, particularly when submitted in large quantities. The notice requests feedback on streamlining local regulations when similar applications are submitted as batches. The notice also questions the amount and structure of fees charged by local governments for applications and access to rights-of-way.

NLC will comment on this notice, in collaboration with other local government groups and state municipal leagues, and is calling on cities nationwide to help craft our response. Click here to provide important data on your city’s wireless facility siting process by January 27 and to request a comment template for your city to use in providing your own comment.

John LaMacchia is the Assistant Director of State and Federal Affairs for the League handling transportation, infrastructure, energy and environment issues. He can be reached at jlamacchia@mml.org or 517-908-0303.