Update on Debt/Deficit Negotiations

Senate Subcommittee Holds Hearing on Immigration Reform

Transportation Authorization Reaches Stalemate

FAA Legislation Remains Stalled

GASB Draft Guidelines Propose Changes to Municipal Pension Reporting

Upcoming Webinar: TIGER Grants and Rural America

NLC Files Comments on Waters of the U.S. Guidance

NLC Comments on Environmental Quality Regulatory Review Plan 

NLC Comments on FCC Broadband Deployment Inquiry

Senate Committee Approves Second Chance Act Reauthorization

NLC Policy Amendments and Resolutions Due August 12

With default day less than one week away, the House and the Senate continue to have significant disagreements over deficit reduction proposals that are tied to efforts to raise the nation's debt ceiling. For months now, the Administration has warned that if the debt ceiling is not raised by August 2, the country will, for the first time ever, default on its financial obligations.

Because a default is unprecedented, no one is completely certain about the potential impacts on local government operations. However, if reports are accurate that the U.S. would be unable to meet nearly 40 percent of its debt obligations in the event of a default, then cities and towns could be impacted in ways similar to the possibilities we faced in the near government shutdown a few months ago. In addition, a default will likely make it more difficult and expensive for cities to access credit in any form, whether it is bonds, loans, letters of credit, or other products. For more information on the impact of a default on local government operations, see the Pew Center on the States' recent report.

NLC continues to call for Congress and the Administration to settle their differences and raise the debt ceiling, while taking a balanced approach to getting our fiscal affairs in order. Click here to view a link to the media statement regarding the negotiations that NLC released last week.

Senate Subcommittee Holds Hearing on Immigration Reform
Leslie Wollack, wollack@nlc.org, 202.626.3029

On Wednesday, Senator Charles Schumer (D-NY) made another attempt to revive the congressional debate on comprehensive immigration reform. The Senate Judiciary Committee Subcommittee on Immigration, chaired by the Senator, held a hearing entitled, "The Economic Imperative for Enacting Immigration Reform," featuring testimony from three mayors whose communities have embraced immigrants.

The three local leaders testifying at the hearing were: Mayor Paul Bridges of Uvalda, Georgia, who warned that the new immigration law enacted in his state is having a devastating impact on the local economy and will decrease public safety as police continue to enforce the law before local crime; Mayor David Roefaro of Utica, New York, who spoke of the valuable contributions of Bosnian refugees to his city's economy; and Mayor Laurent Gilbert of Lewiston, Maine, who noted an initial negative perception of local Somali refugees but said "collaboration and education are the keys to success" in integrating the newest population into the community.

Sen. Schumer stressed that there is an urgent need to reform the nation's immigration system in a manner that will grow our economy by attracting people with innovative skills, talents, and the desire to start new businesses. He specifically referenced two recent reports that highlight the value of immigrants to our local and national economies. The first, published by the Federal Reserve Bank of Boston, shows that in the top 10 "resurgent cities" in the nation, the immigration population increased from 4.5 percent in 1980 to more than 15 percent today. The second, a Kauffman Foundation study found that immigrant-owned businesses jumped from 13.4 percent of all new businesses in 1996 to 29.5 percent of all new businesses in 2010.

NLC supports efforts to fix the nation's broken immigration system and calls on Congress and the Administration to leave the divisive rhetoric behind and work together to enact comprehensive immigration reform.

As the September 30 deadline approaches for Congress to act on a new authorization bill, it appears less likely that Congress will be able to reach agreement on a new set of federal transportation policies. Earlier this month, House Transportation Committee Chairman John Mica (R-FL) released a 22-page draft proposal, which would cut current programs by 34 percent based on the outlines of the House budget agreement, limit transportation spending to available trust fund dollars, and consolidate many of the current transportation programs into one flexible grant for states. The draft bill also includes a series of regulatory streamlining proposals and calls for expanding federal transportation credit programs. No official legislative language has been released, nor any time frame confirmed for consideration by the Committee or the full House.

In the Senate, the Environment and Public Works Committee recently released a summary of a two-year authorization proposal that calls for maintaining the program at current levels and greatly expanding federal credit programs. The bill has bipartisan support from Democratic and Republican committee leaders but would require an additional $12 billion each year, the source of which has not been identified, to reach the proposal's authorization levels.

FAA Legislation Remains Stalled
Leslie Wollack, wollack@nlc.org, 202.626.3029

While Congress remains at an impasse over a new federal airport program and with the latest extension of the current law having expired on July 22, the Federal Aviation Administration (FAA)-for the first time in the agency's history-cannot collect or distribute any construction funds for current and future municipal airport improvements. This means that for the foreseeable future, all current revenues raised through taxes on airline tickets are going directly to the airlines rather than the Airport Trust Fund.

The current disagreement centers on whether or not to pass a clean extension of existing programs or to include several policy changes contained in an earlier House-passed extension. House Transportation Committee Chairman John Mica (R-FL) insists that the House will not adopt a clean version.

Some of the longstanding contested provisions center on labor issues; new to the controversy is the House-passed phasing out of the Essential Air Services Program, which provides subsidies for small airports that would otherwise not receive commercial airline service.

NLC opposes sunsetting or phasing out the Essential Air Services program and supports a clean extension of the current FAA program.

GASB Draft Guidelines Propose Changes to Municipal Pension Reporting
Neil Bomberg, bomberg@nlc.org, 202.626.3042

Earlier this month, the Governmental Accounting Standards Board (GASB) released two "exposure drafts," guidelines that would change how cities and towns report on the assets and liabilities of their pension plans. The drafts-Accounting and Financial Reporting for Pensions and Financial Reporting for Pension Plans-propose amendments to existing standards as part of an effort to improve how the costs and obligations associated with state and local public pensions are calculated and reported.

If finalized, the new guidelines would require state and local governments to report their net pension liability on their financial statements and several changes in the way cities and towns calculate their total pension liability and pension expenses. For example, cities and towns would be required to use a new discount rate that is based on the expected long-term rate of return for the pension fund and the interest rate on a 30 year AA or higher rated municipal bond index, rather than the traditional rate of return discount rate. The new guidelines would also require cities to use a single actuarial cost allocation method that is based on the starting date of the employee and to count pension expenses as an immediate liability rather than one that is deferred and amortized over 30 years.

GASB is accepting comments on the drafts through September 30; NLC is reviewing both drafts and will likely submit comments.

More information, including instructions on how to submit written comments, is available for download atwww.gasb.org. Additionally, the National Institute on Retirement Security will hold a webinar on the GASB exposure drafts on August 3; information may be found on their web site, www.nirsonline.org.

Upcoming Webinar: TIGER Grants and Rural America
Leslie Wollack, wollack@nlc.org, 202.626.3029 

On August 3 at 2:00 p.m. EDT, NLC, along with Smart Growth America, the American Public Transportation Association, the National Association of Development Organizations, PolicyLink, Reconnecting America, and Transportation for America, will host a free webinar designed to help rural communities prepare to submit applications for the recently-announced third round of Transportation Investment Generating Economic Recovery (TIGER) grants.

The webinar-the first in a two-part series in August-will feature an overview of the TIGER program from DOT Deputy Assistant Secretary Beth Osborne, as well as a discussion of innovative rural transportation projects by Alia Anderson, Program and Policy Associate at Reconnecting America. In addition, Courtney Payne, a Government Services Specialist at the Middle Georgia Regional Commission, will showcase a successful rural project from an earlier TIGER grant cycle.

The webinar is only accessible to those who RSVP by 5:00 p.m. EDT on August 2. If you have questions regarding the webinar, contact Garett Ballard-Rosa at gballardrosa@smartgrowthamerica.org or 202.207.3355 x142.

On Wednesday, NLC the National Conference of State Legislatures, the National Association of Counties, the U.S. Conference of Mayors, and several other local government organizations, filed joint comments on the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) Draft Guidance on Identifying Waters Protected by the Clean Water Act (CWA). The Draft Guidance aims to define "waters of the U.S." and determine whether a waterway, water body, or wetland should be protected under the CWA and could lead to an increase in a city's permitting costs or the mitigation expenses associated with discharging pollutants into local rivers and streams.

In the joint comments, the groups call on the EPA and Corps to move forward with a rulemaking process that features an open and transparent means of proposing and establishing regulations and ensures that state, local, and private entity concerns are fully considered and properly addressed.

Additionally, in the comments, the groups raise concerns with the fact that the draft guidance fails to consider the effects of the proposed changes on all CWA programs beyond the 404 permit program, such as Total Maximum Daily Load (TMDL) and water quality standards programs and the National Pollutant Discharge Elimination System (NPDES) permit program.

NLC Comments on Environmental Quality Regulatory Review Plan
Carolyn Berndt, berndt@nlc.org, 202.626.3101 

At the beginning of the year, President Obama issued Executive Order 13563: Improving Regulation and Regulatory Review, which called for federal agencies to draft plans to determine whether their regulations should be streamlined, changed, or repealed to make each agency's regulatory program more efficient, effective and accountable. Over the last several months, the agencies have begun releasing their preliminary review plans and inviting public comment on them. NLC continues to review the plans as they are released and, where appropriate, submits comments underscoring opportunities for the agencies to reduce the burden unnecessary regulations have on local governments and ultimately taxpayers.

This week, NLC submitted comments to the White House Council on Environmental Quality (CEQ) in response to the agency's plan, titled "Preliminary Plan for Retrospective Review of Existing Regulation." The CEQ was established within the Executive Office of the President by Congress as part of the National Environmental Protection Act (NEPA) of 1969. NLC's comments focus on specific changes to NEPA that can increase the efficiency of the regulatory process and reduce unnecessary project delays.

Last week, NLC and a coalition of national organizations representing local government interests filed comments with the Federal Communications Commission (FCC) in response to the agency's Notice of Inquiry (NOI) entitled "Expanding the Reach and Reducing the Cost of Broadband Deployment by Improving Policies Regarding Public Rights of Way and Wireless Facilities Siting."

The FCC's stated purpose for the NOI is to gather information from industry and local governments on a number of issues involving local public rights of way management, compensation, and wireless facilities siting requirements. Specifically, the NOI sought information and data regarding challenges, best practices, and educational efforts.

In the comments, the groups confirm the continued importance of broadband deployment and adoption in local communities and argue that local government rights of way policies and procedures neither hinder nor delay broadband deployment and adoption. They also call on the FCC to resist efforts to federally regulate local rights of way practices and challenged the agency's legal authority to regulate these local policies.

In total, approximately 160 comments were filed with the FCC, the majority of which were filed by local governments. View all comments here. Reply comments may be filed thru August 30; NLC and its coalition partners are reviewing all of the comments that have been filed and plans to file reply comments responding to issues raised in industry's filings.

Senate Committee Approves Second Chance Act Reauthorization
Mitchel Herckis, herckis@nlc.org, 202.626.3124 

Last week, the Senate Judiciary Committee passed S. 1231, the Second Chance Reauthorization Act, which NLC supports.  Since the law was initially enacted in 2007, it has funded proven local re-entry programs, such as substance abuse treatment, job and housing placement, and other services that reduce the chances of offenses by those who have previously committed crimes.

The bill, which calls for the extension of the program through 2016, also includes minor changes to the program, such as increased accountability measures for grantees and an all-state minimum funding formula; the consolidation of several programs; and periodic audits of grantees to ensure the grant funding is being spent for the intended purposes.

Although the bill has bipartisan support, given the limited Senate floor time remaining in this session of Congress, action on the bill may have to wait until next year.

NLC invites all member cities to submit National Municipal Policy (NMP) amendments and resolutions for consideration as part of NLC's annual policy development process. The deadline for submissions is Friday, August 12.

The NMP is a permanent statement of NLC's position on national matters divided into seven policy chapters. Each policy and advocacy committee considers the submitted policy amendments to develop and revise policies within its corresponding chapter. Resolutions address timely issues or specific pieces of legislation and are annual statements of position. Unless action is taken to renew a resolution or incorporate it into the NMP, each resolution expires at the Congress of Cities following their adoption.  

All proposals submitted by the deadline will be forwarded to the appropriate Policy and Advocacy Steering Committees for review. Upon further action, voting delegates will consider the committees' work at the Annual Business Meeting during NLC's Congress of Cities in Phoenix, Arizona, in November.

Submit policy amendments and resolutions in writing to Stephanie Spirer via email: (spirer@nlc.org), fax: 202.626.3043 or mail: National League of Cities, 1301 Pennsylvania Avenue, NW, Suite 550, Washington, DC 20004. Stephanie may also be reached via phone at 202.626.3030 for those seeking a copy of the submission guidelines.