Last weekend the Inflation Reduction Act passed the Senate and is expected to be on Biden’s desk by the week’s end. So what does it mean for counties?
There has been a large amount of talk in the media recently about the Inflation Reduction Act (IRA). On its face the bill appears to be a response to highly publicized rising costs; something felt by both individuals and local governments alike. But the IRA includes provisions that go beyond inflation fighting; the budget reconciliation bill covers areas ranging from climate and energy, healthcare, tax reform, and deficit reduction.
…the IRA would reduce deficits by over $300 billion over 10 years through the relief of inflationary pressures. In total, the proposal includes $433 billion in new spending in energy and climate, and healthcare programs, while raising just under $740 billion. The legislation aims to reduce carbon emissions by 40 percent by 2030.
Local Government Impact:
Environment: Creates or extends several programs whereby counties can seek additional funds for environmentally sustainable projects. Several new programs emphasize providing financial assistance to low-income and disadvantaged communities and/or benefit from zero-emission technologies.
Planning: Establishes the Neighborhood Access and Equity Grant program, with a focus on improving walkability supporting planning and capacity-building activities in disadvantaged communities.
Taxes: In this regard, the IRA is notable for what it didn’t do. From NACo, “… the IRA does not include relief from the $10,000 cap on the state and local tax (SALT) deduction enacted in the 2017 Tax Cuts and Jobs Act. The House-passed bill would have raised the SALT cap to $80,000 and would have extended the cap past its 2025 expiration date as a spending offset. NACo supports the full deductibility of all state and local taxes, particularly the property tax, in the federal tax code.”
Health: Provides several free vaccines for those on Medicare and extends Affordable Care Act (ACA) premium subsidies to 2025. These provisions should work to make communities healthier and reduce costs associated with local public health services.