Resurrection of Healthcare Reform, Three Questions About Sanctuaries

The National Association of Counties (NACo) held a conference call today on federal legislation and regulations that affect counties.

Screenshot 2017-04-04 15.46.59

NACo’s policy team began their federal policy update call by stating that, for NACo, review of federal policy is not seen as a partisan topic, but an issue of federalism and intergovernmental relations.

Overview

According to NACo’s policy team, the concern regarding many current federal proposals is a common underpinning of achieving federal budgetary savings through cuts to state and local governments.

Healthcare

Counties are a key part of the nation’s health system. Nationally, counties spend $84B a year on residents’ healthcare, counties spend $25B on premiums for their own employees, and counties own hospitals and other medical infrastructure, according to NACo.

Healthcare reform is still very much alive the NACo Policy Team reports. The President and leadership are working on efforts to revise the legislation that was withdrawn. What was put forth previously would have cut medicaid spending and other public health funding that states and local governments currently use to provide services. At the same time, the legislation would only have delayed, not repealed the Affordable Care Act’s Cadillac tax on counties and other entities according to NACo.

Given Congress’s schedule, NACo does not predict the next steps for healthcare reform to emerge until May 2017. For more information about the legislation that was proposed previously and its effect on county governments, see ACA repeal, replacement raises concerns for counties.

Tax Reform

Comprehensive tax reform has been a goal of Speaker Ryan’s for a while, as described by NACo’s tax policy lead. NACo cannot predict, however, whether this year will bring significant tax reform, or not.

There are two primary issues that NACo tracks in the area of tax reform:

  1. The tax exempt status of municipal bonds, and
  2. The state and local tax deduction

Municipal bonds have funded 75% of the nation’s infrastructure over the years, according to NACo. The concern is that the municipal bond interest exemption will be cut or capped through tax reform, threatening the utility of this infrastructure-building tool. For more information, see MACo’s prior coverage on municipal bonds.

The state and local deduction is worth $1.3T over ten years, according to NACo. But the issue is not just the loss of dollars to counties, but also the double-taxation of local residents. Maryland is not one of the handful of states that gains the most from this deduction, according to the Tax Foundation:

The deduction’s effect is for lower- and middle-income taxpayers to subsidize more generous spending in wealthier states like California, New York, and New Jersey, reducing the felt cost of higher taxes in those states.

Infrastructure

Trump has stated his interested in an $1T increase in infrastructure, as recently as yesterday morning, according to NACo’s policy lead. NACo has a good relationship with the presidential advisor on infrastructure and NACo’s policy team is meeting with him in-person next week.

According to NACo, infrastructure needs are outstripping the ability to raise revenue nationwide. NACo advocates for the public sector to have a seat at the table as the executive branch explores possibilities for private sector involvement.

On May 16-17th NACo is hosting an infrastructure week fly-in. For more information, look for updates on the NACo website or contact Kevan Stone at NACo.

Screenshot 2017-04-05 09.22.52

Sanctuary Cities and Counties

NACo clarified that U.S. Immigration and Customs Enforcement (ICE) detainer requests are voluntary. If a county honors a detainer request without a court order or established probable cause, the county could be held liable.

Questions that remain:

  1. What is a sanctuary jurisdiction? There is no clear definition.
  2. What can the government do legal to encourage compliance? The question here is whether the federal government withhold grant funds.
  3. What does 8 U.S.C. 1373 require from county governments, if anything? This centers on reporting requirements.

NACo and partner organizations are hosting a webinar April 18, 1pm Eastern Standard Time on this issue. For more information, join the webinar Legal Issues Surrounding the Executive Order on Sanctuary Jurisdictions and see the NACo Analysis.