Quick County Update on Federal Issues

On this morning’s call of counties from the northeastern United States, National Association of Counties Legislative Director Deborah Cox and Health Policy Director Brian Bowden provided the following updates:

The President’s Fiscal Year 2018 Budget

The President’s full budget request for Fiscal Year 2018 (October 1, 2017-September 30, 2018) came out yesterday. It is a couple of thousand pages, and NACo is reviewing it for a full analysis to be released later this week. Similar to what was seen in the initial proposal, however, there are many programs cut that would negatively affect county governments. These range from rural development grant cuts to the elimination of Community Development Block Grants for urban areas, and others [for more see Trump’s Proposed Budget Eliminates 66 Programs, Including “CDBG” and NACo’s Statement on the President’s Proposed FY 2018 Budget].

NACo’s Deborah Cox stressed that this is just a budget proposal. The next step is that the House and Senate determine the total amount of funding in the budget before moving on to its composition. For more information, see this Guide to the Federal Budget Process.

Healthcare Reform Efforts: All Eyes on the Senate

National Association of Counties Health Policy Director Brian Bowden updates that the House passed the American Healthcare Act. Under the Act, states may waive out of several of the ACA requirements. Also, a late-coming amendment to the bill created a high-risk pool modification to accommodate pre-existing condition concerns. In his update, Bowden noted the emotional appeal by Jimmy Kimmel on pre-existing conditions prior to the legislation’s passage.

At this point, all eyes turn to the Senate, where the bill faces stricter procedural rules and different policy dynamics—and therefore is expected to be changed significantly. The Congressional Budget Office is expected to release a score on the House-passed measure today, allowing the Senate to officially move forward.

The Latest on Tax Reform

The house is completely focused on tax reform now that they have passed their healthcare legislation. Tax reform has been a top priority of Speaker Ryan.

NACo provided context for tax reform and the dramatic effect it could have on county fiscal health: while many of the issues that NACo tracks are in the billions as far as potential effects on county governments, the effects of tax reform could be in the trillions of dollars. The municipal bond tax deduction and state and local tax deductions are longstanding provisions of the tax code that have been a part of the partnership between the federal government and local governments for years. But, they are again part of the tax reform discussions going on in the House now.

Over the next few days, NACo will release more detailed analysis of the President’s proposed budget and its effect on counties. Stay tuned to Conduit Street for more.