Transportation and FAA Laws Extended

Coalition Urges Super Committee to Preserve Tax-Exempt Financing

House Introduces 2012 Stop-Gap Spending Measure

NLC Urges GASB to Withhold Publication of Final Pension Reporting Rules

Transportation and FAA Laws Extended
Leslie Wollack, wollack@nlc.org, 202.626.3029

Yesterday, the Senate passed a short-term bill (H.R. 2887) to extend Federal Aviation Administration (FAA) programs and surface transportation programs. The House cleared the bill earlier this week, and the President is expected to sign it into law before the midnight deadline tonight.

Under the bill, FAA programs will be extended for four months, and surface transportation programs, set to expire on September 30, will be extended for six months. The bill maintains current highway and transit funding levels and extends authority for both federal aviation taxes and the federal gasoline tax. It does not contain any policy changes. 

Coalition Urges Super Committee to Preserve Tax-Exempt Financing
Lars Etzkorn, etzkorn@nlc.org, 202.626.3173

On September 6, NLC and more than 20 national organizations sent a letter to the twelve members of the newly created Joint Committee on Deficit Reduction ("Super Committee") urging continued congressional support for federal tax-exempt bond financing. In the letter, the groups argue that, because tax-exempt bonds issued by state and local governments serve as the primary mechanism for financing the majority of the infrastructure investments made in the country, eliminating it would effectively end such investment, just as the country needs more investment to help put Americans back to work and to improve the condition of our infrastructure.

While the Super Committee has not talked publicly about eliminating the exemption for tax exempt financing, the National Commission on Fiscal Responsibility and Reform (aka Simpson-Bowles Commission) did include it as one of its recommendations in 2010.

NLC and the coalition will continue to meet with and educate members of Congress on the importance of the exemption and tax exempt financing to improvements to roads, schools, water infrastructure, and neighborhood revitalization initiatives in our communities.

As the Super Committee began the quest to find over a trillion dollars in savings by the November deadline and President Obama traveled the country drumming up support for his jobs proposal, the House Appropriations Committee introduced a Continuing Resolution (CR) to extend the deadline for passing the annual spending bills for FY 2012 from September 30 to November 18. The CR (H.R. 79) is necessary because the House and Senate have not passed a single spending bill for the fiscal year that begins on October 1.

The package calls for continuing funding at FY 2011 levels with the exception of a 1.5 percent across-the-board cut to keep funding at the $1.043 trillion level, as required by the Budget Control Act (debt-ceiling agreement) cap on FY 2012 appropriations.

The CR also serves as a vehicle for an additional $3.65 billion in disaster relief funding to provide assistance to the thousands of communities affected by recent natural disasters, to extend the national flood insurance program, and to delay a mandatory payment from the United States Postal Service to ensure the continuation of mail service.

Although congressional leaders appear anxious to get a CR in place and avoid a repeat of last spring's budget fight that nearly resulted in a government shutdown, the two chambers are at odds over whether disaster relief funding must be offset. The House bill provides offsets for the new spending, but Senate Democrats are insisting that disaster relief spending be treated as emergency spending as it has in the past. With Congress scheduled to be on recess the last week of September, the House and Senate need to reach agreement and act on legislation next week. 

NLC Urges GASB to Withhold Publication of Final Pension Reporting Rules
Neil Bomberg, bomberg@nlc.org, 202.626.3042 

NLC and nine other state and local organizations including the National Governors Association, the U.S. Conference of Mayors, and the National Association of Counties, sent a letter to the Governmental Accounting Standards Board (GASB) requesting that it withhold publishing the final revisions to Statements 25 and 27 for at least 60 days after the planned publication (or effective) date of September 30. The groups made the request so that the new rules would not go into effect until after the field testing stage is completed and GASB, state and local governments, and retirement plan administrators have an opportunity to determine the impact of new standards for reporting pension assets.

If finalized, the proposed standards would require state and local governments and pension administrators to report their net pension liability on their financial statements and would make several changes to the way in which they 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.