Shut-down, Infrastructure, Tax Reform & More in Federal Issue Update

This morning, the NACo Northeast County Regional Caucus held its monthly call with the National Association of Counties for an update on federal issues affecting counties. To join future calls, stay tuned to Conduit Street for call-in information, or contact Robin Clark Eilenberg.

Notes from the January 24, 2018 call:

Budget Negotiations & Appropriations Package

  • Congress passed short-term continuing resolution to fund the government through February 8th.
  • The government shut-down lasted just under 3 days.
  • Congress is still negotiating over immigration measures including DACA (Deferred Action for Childhood Arrivals).
  • Congress funded a 6-year funding extension for CHIP (Children’s Health Insurance Program).

The White House’s Infrastructure Plan

  • There was a 6-page leaked document from the White House, but nothing was formally released yet. NACo expects a 60-70 page formal proposal on infrastructure to be released any day. The formal proposal would provide a detailed overview to Congress allowing them to start drafting legislation.
  • One the themes of the leaked document is that the federal government would pay less for infrastructure and the local governments would pay more. However, the leaked document could be old, and the plan could change, especially since the passage of tax reform.

Opioid Emergency

  • The public health emergency for the opioid crisis was extended. It had been set to expire on January 23rd, it now lasts through April 23rd.

Waters of the US

  • The Supreme Court found that federal districts, not the state appeals courts have jurisdiction over the Environmental Protection Agency’s Waters of the US ruling.
  • This finding could invalidate the nationwide stay on the 2015 rule that changed the definition of waters of the US. NACo and many counties opposed the 2015 rule that would have expanded the definition and brought more bodies of water under environmental requirements.

Tax Reform

  • The final tax reform legislation included some improvements in areas of concern for counties and NACo:
    • Initial conversations on tax reform jeopardized municipal bonds’ tax exempt status, but they were protected in the final bill.
    • Private activity bonds, also used in infrastructure financing, were slated for elimination in the original bill, but they were protected in the final bill.
    • Credits for historic housing and building preservation and other credits helpful to counties were also retained.
  • NACo will be seeking to restore elements that were lost in the final tax reform package:
    • Advanced refunding bonds, which are used to refinance tax exempt municipal bonds, will no longer be tax-exempt under the final bill. NACo hopes to restore the tax-exempt state of advanced refunding bonds in future legislation.
    • The state and local tax deduction was fully wiped out in the original bill, and in the final legislation preserves $10,000 of the deduction. NACo will be working to raise the $10,000 cap.
  • For more information on tax reform from NACo, see Tax Reform Resources.

Learn more about NACo and register for the upcoming NACo Legislative Conference in Washington DC.