Federal Advocacy Update: Week of July 31, 2018

The exterior of the U.S. Capitol Building
The exterior of the U.S. Capitol Building

In this issue:

FY19 Appropriations: Where Are We Now

Michael Wallace, 202.626.3025; Carolyn Berndt, 202.626.3101

During the week of July 23, the Senate began consideration of a Fiscal Year (FY) 2019 spending package consisting of four appropriations bills totaling $154.2 billion: Interior-Environment, Financial Services, Agriculture, and Transportation-Housing and Urban Development. For cities, the decision to bundle the four bills is another good sign that Congress is likely to remain faithful to the higher funding levels approved under the current two-year budget agreement, rather than bending to the president’s proposed budget cuts. If the package passes, and many expect it will, the Senate will have approved seven of the annual twelve spending bills before their August recess. That would give Congress two months to resolve the differences between those bills before the new fiscal year begins on October 1.

The timing is important because Senate leaders do not want to resort to sending the White House another giant, year-end omnibus spending package. For one, the House has been unable to match the bipartisan cooperation on display in the Senate when it comes to appropriations bills, and it isn’t clear if an omnibus bill could pass the House. Secondly, President Trump vowed that he would never sign another omnibus spending package following enactment of the FY18 omnibus appropriations package.  

In general, the four Senate bills would extend the higher FY18 funding levels for city priorities through FY19, including several programs covered under the Interior-Environment and Energy-Water Bills, as well as $3.3 billion for CDBG. Unlike the House, the Senate bills do not generally include controversial, partisan policy riders or proposals that would undermine the current budget agreement. 

City leaders can track the development of the FY19 spending bills by visiting NLC’s Budget Tracker, which details dozens of federal programs important to cities across all federal agencies. 

Energy-Water

Earlier this month, the House and Senate each approved a “mini-bus” package of three FY19 appropriations bills, including those pertaining to Energy-Water, Military Construction and Veterans Affairs, and the Legislative Branch. Both chambers have named conference committee members who will begin working out the differences between the two bills, with an eye toward completing negotiations before the end of the fiscal year on September 30. 

Senate conference committee members are: Senators Richard Shelby (R-AL), Lamar Alexander (R-TN), John Boozman (R-AR), Steve Daines (R-MT), James Lankford (R-OK), Patrick Leahy (D-VT), Dianne Feinstein (D-CA), Brian Schatz (D-HI) and Chris Murphy (D-CT).

House conference committee members are: Representatives Rodney Frelinghuysen (R-NJ), Mike Simpson (R-ID), John Carter (R-TX), Ken Calvert (R-CA), Jeff Fortenberry (R-NE), Chuck Fleischmann (R-TN), Jaime Herrera Beutler (R-WA), Scott Taylor (R-VA), Nita Lowey (D-NY), Marcy Kaptur (D-OH), Pete Visclosky (D-IN), Tim Ryan (D-OH) and Debbie Wasserman Schultz (D-FL). 

The House and Senate Energy-Water appropriations bills largely reject the president’s proposed cuts and provide level funding at FY18 levels for key programs, such as $251 million for the Weatherization Assistance Program. The House bill also includes several controversial policy riders not found in the Senate version, including one to repeal the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers’ Clean Water Rule. Conference committee members have not yet met to begin work. 

Interior-Environment

On July 19, the House passed its spending bill by a vote of 217-199 to fund the U.S. Department of Interior and the U.S. Environmental Protection Agency as part of a two-bill “mini-bus” appropriations package that also included the Financial Services bill. While the bill provides an increase to the Water Infrastructure Finance and Innovation Act (WIFIA) providing $75 million — compared to $63 million in FY18 — it funds the Clean Water and Drinking Water State Revolving Fund programs at FY2017 levels, $1.393 billion and $863 million respectively. 

The House considered 87 amendments to the mini-bus package and the final bill includes several controversial policy riders, including one to repeal the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers Clean Water Rule. 

Meanwhile, the Senate is preparing to bring its version of the Interior-Environment bill to the floor this week as part of a “mini-bus” package that includes not only the Interior-Environment appropriations bill and Financial Services, but also the Agriculture and Transportation-HUD spending bills. The Senate bill provides mostly level funding at FY18 levels for the Clean Water State Revolving Fund ($1.694 billion), Drinking Water State Revolving Fund ($1.164 billion), WIFIA ($63 million) and Brownfields ($80 million). Again, the Senate bill does not include any policy riders.

Transportation-Housing and Urban Development 

Funding for the Departments of Transportation and Housing and Urban Development have emerged as a point of partisan contention in the House, with familiar lines being drawn on overall spending levels, and an August recess that leaves little time for any meaningful debate. As a result, it’s more than likely that there will be no vote on the House Transportation-HUD bill before the fiscal year ends on October 1.

The situation is different in the Senate, which unanimously passed the Senate Transportation-HUD bill in committee. Seeing a chance to overcome the stalemate in the House, Senate leaders agreed to bundle the Senate T-HUD bill with three other bills, two of which were already approved by the House.  Unfortunately, the limits of that strategy slowly became evident, as the four-bill package became subject to over 200 filed amendments. A final vote on the bill has been delayed by a week. Of the 200 amendments, two dominated the debate: an amendment to increase funding for election security in response to Russian interference and an amendment to permanently authorize the Land and Water Conservation Fund.  

NLC supports passage of the Senate Transportation-HUD bill, which generally maintains FY18 funding increases made possible by the two-year Bipartisan Budget Act. To date, none of the filed amendments would impact the $3.3 billion allocated for CDBG. Although it’s unclear which of the 200 plus amendments will actually be considered for a vote, amendments that NLC would support include a Senator Nelson (D-FL) Amendment (3545) to make the Disaster Housing Assistance Program (DHAP) available to survivors of Hurricanes Harvey, Irma, and Maria; and a Senator Young (R-IN) Amendment (3550) to establish a bipartisan task force to evaluate and create recommendations regarding the nation’s affordable housing crisis.  

Outgoing House Chairman Releases Plan to Fix Federal Infrastructure Funding 

Brittney Kohler, 202.626.3164

Since the president released his infrastructure proposal this spring, cities have been calling on Congress to follow-up with a proposal of their own. On July 23, Representative Bill Shuster (R-PA), the outgoing Chair of the House Committee on Transportation and Infrastructure, finally released a discussion bill on a comprehensive transportation and water resources infrastructure investment package. Following the release of the proposal NLC, National Association of Counties (NACo), National Governors Association (NGA), Council of State Governments (CSG) and the National Council of State Legislatures (NCSL) released a joint statement.

The bill provides a path to address the Highway Trust Fund’s looming insolvency in 2020, while also eliminating the gas tax, increasing investment in important water infrastructure and asking that all beneficiaries of federal transportation contribute to its funding. While the bill could set the course for the future, Chairman Shuster released this proposal highlighting that frustration with inaction is high, noting “Since election day, the American people have waited for action by their federal elected representatives, and I am just as frustrated as they are that we have yet to seriously consider a responsible, thoughtful proposal.” 

NLC is glad to see the Chairman put pen to paper for his colleagues to react to. For city leaders, now is a great time to ask your Members of Congress to carry on the Chairman’s momentum towards accomplishing comprehensive infrastructure reform and address pressing needs, like the looming insolvency of the Highway Trust Fund. Cities need to know if Congress will rebuild with us and support an infrastructure package that meets the essential needs of cities. 

For NLC’s key takeaways on where the Chairman’s infrastructure proposal is leaning and how that may impact cities, visit NLC’s blog CitiesSpeak.

First Peek at Tax Reform 2.0

Brian Egan, 202.623.3107

On July 24, House Ways and Means Committee Chairman Kevin Brady (R-TX) released a listening session framework for the anticipated Tax Reform 2.0. The two-page document provided high level talking points around goals for a follow-up package to 2018’s Tax Cuts and Jobs Act (TCJA). 

Last year, in order to limit the cost of the TCJA, legislators set many tax cut provisions for individuals to sunset in 2026. This framework centers on making those previously temporary tax cuts for individuals permanent. In addition, the framework broadly outlines plans to encourage flexible savings accounts and spur business innovation through changes to the tax code. This announcement did not include any indication that technical corrections to the tax bill would be included in immediate plans. 

While the proposal lacks key specific details, including how Congress plans to pay for the estimated $600 billion price tag, it is further proof that some Members of Congress are serious about voting on additional tax legislation between September and the November elections. NLC remains committed to preserving our priorities in the tax code, which include:

Municipal Bonds:

  • Preserving the tax exemption for interest earned on municipal bonds.
  • Preserving the tax exemption for interest earned on qualified private activity bonds.
  • Restoring the tax exemption for interest earned on advance refunding bonds.

Tax Credits that Spur Growth in Cities:

  • Preserving the Historic Tax Credit.
  • Preserving the New Markets Tax Credit.
  • Preserving the Earned Income Tax Credit.
  • Preserving the Low Income Housing Tax Credit.
  • Preserving the Work Opportunity Tax Credit.

Preserving the Sovereignty of Local Governments:

  • Preserving the state and local tax (SALT) deduction and removing its new $10,000 cap.
  • Eliminating new language that considers local governments’ contributions to capital as taxable corporate income under Section 118.

Congress Extends NFIP Hours Before Deadline

Yucel Ors, 202.626.3124

With hours to spare before the National Flood Insurance Program is set to expire, the Senate voted on July 31 to extend the program through November 30. The House voted 366 – 52 to extend the NFIP on July 25, 2018 before leaving town for the August recess. The bill now goes to the president's desk for signature.

NLC supports the short-term extension of the NFIP while the House and Senate continue to work out the necessary reforms needed to keep the program solvent and ensure flood insurance premiums are affordable.

Don’t Let Congress Widen the Digital Divide

Angelina Panettieri, 202.626.3196

In every city across our nation, local leaders are actively working to reduce the digital divide. Access to the Internet is no longer a luxury. Reliable, fast broadband that connects all neighborhoods is a vital component of our citizen’s daily lives. 

But a bill was recently introduced in the Senate by Senators John Thune (R-SD) and Brian Schatz (D-HI) that would complicate existing efforts by state and local governments to deploy broadband service. The STREAMLINE Small Cell Deployment Act (S. 3157) would force a one-size-fits-all preemption that will harm local negotiations and policy work – slowing the deployment of new broadband infrastructure. NLC joined a number of other state and local government organizations on a letter to senators opposing the bill.

Cities have traditionally negotiated with providers on issues such as the location, appearance, and size of wireless infrastructure, but this bill severely limits the ability of cities to ensure that infrastructure suits the neighborhood around it and to charge appropriate rents for private, for-profit use of public property.

With work being done to introduce a House version of this bill, we need city leaders to send your Members of Congress a letter today urging opposition to this harmful legislation. NLC shares Congress’s goal of ensuring efficient, safe, and appropriate deployment of new broadband technology, but S. 3157 is not the best way to achieve this shared goal.

President Signs Career and Technical Education Bill into Law

Stephanie Martinez-Ruckman, 202.626.3098

On July 31, the president signed into law The Strengthening Career and Technical Education for the 21st Century Act (H.R. 2353), which reauthorizes the Carl D. Perkins Career and Technical Education Act (Perkins Act). The Perkins Act provides necessary updates to career and technical education programs, including eliminating a negotiation process between states crafting goals for their career and technical education programs and the secretary of the U.S. Department of Education. States receive $1 billion in grants via this program. NLC has long championed the reauthorization of the Perkins Act and released a statement in support of it’s signing.

The bill's signing comes after the Senate passed the much-anticipated legislation on June 23 by a voice vote. The House of Representatives passed their version of the bill last year and, following the Senate’s action, passed the Senate’s version of the bill by voice vote and promptly forwarded the legislation to the president for signature last week.

NLC supported the Senate’s action on the bill, which is a key pillar of our Rebuild With Us guiding principles, as well as a key component of the Administration’s infrastructure principles. Passage of this bill received support from both Ivanka Trump and Secretary of Education Betsy DeVos.

How the BDAC Could Shape Cities’ Digital Future

Angelina Panettieri, 202.626.3196

During the week of July 23, the thirty members of the Broadband Deployment Advisory Committee (BDAC) gathered at the Federal Communications Commission (FCC) to develop and agree to debate new model state and local laws for broadband deployment. 

The group is comprised of one elected official and five total representatives of state or local governments — along with a wide range of members representing telecommunications companies, academic institutions known for their opposition to municipal broadband investment, and stakeholders representing the National Grange and LGBT Technology Partnership & Institute. Together, they represented the committee charged with writing state and local laws on broadband deployment. But with just a handful of local government officials onboard, the ramifications for cities could be serious.

To read more about the BDAC proceedings and how their decisions could impact cities, visit NLC’s blog CitiesSpeak.

NLC Responds to National Council for the American Worker

Stephanie Martinez-Ruckman, 202.626.3098

On July 19, President Trump signed an Executive Order establishing the National Council for the American Worker, which is comprised of individuals from the administration and is tasked with developing a national strategy for workforce development, focusing on employment, training and the use of data.

The Council will be supported by an advisory board comprised of leaders from the private sector, educational institutions, philanthropic organizations and state government. The advisory board will provide advice and on-the-ground examples to the Council as they work to develop a national workforce strategy. In addition, the announcement showcased the new Pledge to America’s Workers, which asks companies across the country to commit to investing in the training and retraining of their workforces.

Following the announcement, NLC released a statement commending the president for his focus on investments in workforce development, which are critical to the economic vitality of cities, as well as highlighting the need for the inclusion of local government representation on the advisory board for the Council.

Program Area
Related Topics