Federal Advocacy Update: Week of July 18, 2017

U.S. Capitol
U.S. Capitol

In this issue:

FY18 Federal Budget: State of Play for Cities

Angelina Panettieri, 202.626.3196

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 yesterday, the Committee has finished work on half of the twelve appropriations bills needed to fully fund the federal government: the Agriculture and Rural Development bill, the Commerce, Science, and Justice bill, the Defense bill, the Energy and Water bill, the Financial Services bill, the Legislative Branch bill, the Military Construction and Veterans Affairs bill, and the Transportation, Housing and Urban Development bills. The committee has yet to mark up the Homeland Security bill, the Interior and Environment bill, the Labor, Health and Human Services bill, and the State bill, but are expected to do so before the start of their August recess. In addition to this appropriations work, the House Budget Committee must set top-level spending numbers for each of these appropriations bills, and the House bills must be reconciled with Senate versions, all before the start of the new fiscal year on October 1.

NLC has been monitoring the House Appropriation Committee's markups, and contacting subcommittees directly in response to approved spending bills. The Federal Advocacy team sent letters early this week to the Subcommittee on Agriculture, Rural Development and Related Agencies, the Subcommittee on the Interior and the Environment, the Subcommittee on Energy and Water Development, the Subcommittee on Transportation, Housing and Urban Development, the Subcommittee on Labor, Health and Human Services, and Education, and the Subcommittee on Transportation, Housing and Urban Development.

To learn more on each spending bill, click here to view our Federal Budget FY18 Budget Tracker that takes a detailed look at some of the most important federal programs to cities, and the current state of play for their funding. 


Why SALT Matters to Cities

Will Downie, 202.626.3139

Last Tuesday, NLC, in conjunction with the Government Finance Officers Association (GFOA) and the Big 7 state and local government associations, hosted a panel discussion on the State and Local Tax Deduction on Capitol Hill.

The panel, moderated by GFOA CEO and Executive Director Chris Morril, featured Virginia Municipal League President and NLC FAIR Committee member Mayor Bob Coiner, Gordonsville, Va., Mayor Allison Silberberg, Alexandria, Va., Member Mike Fricilone, Will County, Ill., and James Nicholson, Director of Finance for Pataskala, Ohio. They discussed the importance of the State and Local Tax Deduction for their jurisdictions, and the harm that would come if it was eliminated.

The panelists also discussed how the administration’s plan to remove the State and Local Tax Deduction would harm constituents, and called on Congress to protect this commonsense deduction that has been in place since the first Federal Tax Code was passed over 100 years ago. The local officials discussed how this deduction has allowed them to finance the services that their citizens expect from their local government, and how eliminating it would require them to cut vital services.

A reoccurring theme of the discussion focused on how the elimination of this deduction would result in double taxation for millions of Americans, and push many below the threshold for the standard deduction that the administration has proposed instead. As such, this would result in an increased tax burden for many people all across the country, and unfairly reward the wealthy while punishing the most vulnerable in society.

The idea of removing the State and Local Tax Deduction is a simplistic answer to a complex problem. Removing it would only add to the tax burden of Americans, while eliminating many of the services provided by their local government. NLC calls on Congress to respect and protect this important tax deduction that is rooted in the ideal of federalism and has formed a positive relationship between local and federal government for over 100 years. 


Senate Committee Passes Brownfields Reauthorization

Carolyn Berndt, 202.626.3101

Last week, with NLC support, the Senate Committee on Environment and Public Works passed the Brownfields Utilization, Investment and Local Development Act (S. 822) by voice vote. The bill would reauthorize the U.S. Environmental Protection Agency (EPA) Brownfields program, while making several key changes to assist with the cleanup and redevelopment of large, complex brownfields sites.

NLC has advocated for increasing the single-site cleanup grant cap, authorizing multipurpose grants, and clarifying issues around municipal liability. Many of NLC’s recommendations are incorporated into the bill. Specifically, the bill:

  • Authorizes multipurpose grants up to $950,000;
  • Increases funding for remediation grants to $500,000, with the ability for EPA to go up to $650,000 per site;
  • Allows up to 8 percent of grant amounts to be used for administrative costs;
  • Addresses liability concerns for sites acquired prior to January 11, 2002; and
  • Addresses “involuntary” acquisition of properties.

S. 822 is sponsored by Sens. John Barrasso (R-WY) and chair of the Committee, Thomas Carper (D-DE) and ranking member, James Inhofe (R-OK), Edward Markey (D-MA), Dan Sullivan (R-AK), Cory Booker (D-NJ) and Sheldon Whitehouse (D-RI).

Senate action follows the passage of a similar brownfields reauthorization bill (H.R 3071) by the House Energy and Commerce Committee on June 28. The House Transportation and Infrastructure Committee also has jurisdiction over brownfields, with a version introduced by Rep. Elizabeth Esty (D-CT). The timeframe to move the bills to the floor in either chamber is uncertain.


DOL Overtime Rule Update

Stephanie Martinez-Ruckman, 202.626.3098

Last month, before the U.S. Court of Appeals for the Fifth Circuit, the U.S. Department of Labor (DOL) defended its authority to set a salary test to determine qualifications for overtime pay. Should the court uphold the authority of DOL to set a salary test, this will represent a first step towards ensuring that DOL can move forward with further rulemaking processes to determine what, if any, salary update would be proposed for overtime by the department. In his confirmation hearing earlier this year, Secretary Acosta noted that he would support a salary threshold increase, but he questioned the sharp increase as proposed in the rule. 

As you may recall, the U.S. Department of Labor’s overtime rule, finalized during the last administration, increased the overtime salary level to $47,476, which is double the current level, and called for automatic adjustments every three years. The rule was originally scheduled to go into effect on December 1, 2016, however, it was delayed due to the issuance of a nationwide preliminary injunction blocking the rule by the U.S. District Court for the Eastern District of Texas.

NLC supports modernizing the overtime rules, but has concerns about the fiscal impact of the rule as originally written and opposes automatic three-year updates. For cities as employers, absorbing the impact of the rule would be felt significantly on municipal budgets, particularly those of small and medium-sized cities. NLC will continue to follow DOL’s actions within the courts and looks forward to actively participating in future rulemakings that would look to update and revise overtime regulations.


Better Care Reconciliation Act Fails to Collect Necessary Senate Votes

Stephanie Martinez-Ruckman, 202.626.3098

Yesterday, Senate Majority Leader Mitch McConnell announced that the Better Care Reconciliation Act, as proposed by Senate GOP leadership earlier this month, did not have the necessary votes to move forward. Following the news that Senator John McCain (R-AZ) would not immediately return to Washington following surgery, Senators Jerry Moran (R-KS) and Mike Lee (R-UT) announced that they would be unable to support the legislation due to it not repealing enough of the Affordable Care Act and not doing enough to reduce health care costs, joining Senators Rand Paul (R-KY) and Susan Collins (R-ME) in their opposition. 

Following this announcement, Leader McConnell announced his plan for a new way forward: voting on full repeal with a two-year transition period -legislation that was passed in 2015 and vetoed by President Obama - as they work towards a replacement. However, hours after this announcement, three senators announced that they would not support a repeal without a replacement in place: Senators Susan Collins (R-ME), Shelley Moore-Capito (R-WV), and Lisa Murkowski (R-AK). 

As the Senate moves forward from this debate, NLC looks forward to working with members of Congress on reforms to health care that ensure access to health care for our residents, and that do not shift the financial burden onto cities.

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