Washington, DC Update – February 2017

GFOA and Issuer Groups’ Message to Congress: Munis Build Infrastructure

On January 10, GFOA and 28 other issuer groups, including our State and local sister organizations, sent a message to the entire Congress in support of the preservation of the tax exemption of municipal bond interest.

In the message we reiterated that the municipal bond is the only infrastructure financing tool that is accessible to jurisdictions of all sizes to effectively access the capital markets. We emphasized that the municipal bond is the best way to implement the infrastructure needs of each community effectively because decision-making is made at the local level. Read our letter: http://gfoa.org/sites/default/files/MarketplaceFairnessActResolution.pdf

Will you join the effort? Tell us your story!

GFOA continues to develop information for distribution to Congress about the tax exemption on municipal bond interest, including data that shows the costs that local governments may incur should the tax exemption come under review in comprehensive tax reform.

But the most effective communication comes from you.

What have munis built in your jurisdiction? Will you share pictures of the projects built by bonds with us? Jump on the hashtag #BuiltByBonds and @GFOA along with your Congressional representatives. Please let the Federal Liaison Center know of any communication heading up to your Senator or Representative, or let us know how we can help your efforts (Emily Brock)!

 

Sens. Heinrich and Keller Introduce “Cadillac Tax” Legislation

On January 10, Senators Heinrich (NM) and Heller (NV) introduced bipartisan legislation (S.58) that would repeal the Cadillac tax. Recognizing the essential nature of health care reform initiatives that expand access to quality health care and control the growth of health care costs, GFOA policy commits the GFOA to working with federal policy makers to advocate adequate and appropriate funding to ensure the sustainability of the Patient Protection and Affordable Care Act. In so doing, GFOA supports legislative efforts to repeal the 40% excise Tax on Health Plan Premiums and also supports alternative approaches that would mitigate the effect of the excise tax on State and Local governments while preserving the authority of State and Local governments to design and maintain health insurance arrangements that are tailored to the specific needs of the employers. The Federal Liaison Center will continue to update members of discussions surrounding this and of the legislation progress as the 115th Congress proceeds.

 

New Year, New Action on Marketplace Fairness

On January 3, 2017, the City of Roanoke, Virginia, passed a resolution that urges the US Congress to act on legislation that will enable State and Local governments to collect revenues due to local government. The inaction of Congress over the past several years has resulted in an increase in the Virginia state sales tax from 5.0% to 5.3% and has placed significant limitations on the jurisdiction.

The resolution asks the new Congress to act on legislation this year that would collect and remit sales taxes structured on a system of collection based upon the purchaser’s location. Passing this legislation during the 115th Congress would “send the clear and unequivocal message to States and Localities that the United States Congress supports small business women and men who create jobs, produce revenues to support essential infrastructure improvements, and create a stronger and more resilient economy for the benefit of all Americans,” as stated in the resolution, which passed unanimously among the City of Roanoke’s City Council at their first Council meeting of the year.

This resolution sends a clear message not only Roanoke’s Representative Bob Goodlatte, Chairman of the House Judiciary Committee, but also to the state legislature and Governor McAuliffe, who has recently proposed legislation that would require certain out-of-state online retailers to collect sales taxes.

The Federal Liaison Center is working with our colleagues at the National League of Cities, the U.S. Conference of Mayors, and the National Association of Counties to distribute a template of this resolution and gain traction on a solution that would give marketplace fairness the chance to be considered and passed this year. Stay tuned for more details on this grassroots movement, and access the City of Roanoke’s resolution here: http://gfoa.org/sites/default/files/MarketplaceFairnessActResolution.pdf

 

GFOA Federal Liaison Center Priorities Outlined

With the new Congress and President settling into Washington, we now enter time where the new administration lays out its key goals and looks for opportunities where these initiatives can find traction. GFOA priority items for the new Administration and Congress include consideration of legislation dealing with an overhaul of the federal tax code through comprehensive tax reform, collection of state and local taxes on remote sales, legislation to classify investment-grade municipal bonds as High Quality Liquid Assets (HQLA), efforts to repeal or significantly reform the Affordable Care Act (ACA), and attempts to revise the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

Click here for an overview of expected federal activity in 2017 that includes discussion of GFOA’s related advocacy campaigns. The GFOA’s Federal Liaison Center will monitor these legislative and regulatory activities and work to advance the public policy positions adopted by the GFOA membership.

 

Marketplace Fairness: Municipal Resolutions Encourage Leadership

Even though January 2017 marked the beginning of the 115th Congress and a new Administration, state and local governments still find themselves without the ability to enforce existing sales and use tax laws on remote, online purchases. A long-standing priority for state and local governments, we remain optimistic that federal remote sales tax legislation will advance in the new Congress. We anticipate an introduction of legislation identical to last year's legislation in February 2017.

In Roanoke, Virginia, City Council members determined that the strongest message could be delivered via resolution, urging Congress to pass marketplace fairness legislation. Several other surrounding jurisdictions have passed identical resolutions. A corresponding op-Ed was published by the local paper authored by the city manager of the City of Roanoke, the local chamber and a local business leader describing the resolution and its purpose.

Consider doing the same! Visit our Marketplace Fairness website for the resources you need to pass a resolution, including a draft resolution and a mythbuster fact sheet. Please let us know at the Federal Liaison Center if we can be helpful in any way. Contact Michael Belarmino or Emily Brock.

 

Executive Order on Sanctuary Cities Raises Concerns

On January 25, 2017, President Trump issued the Executive Order Enhancing Public Safety in the Interior of the United States. An executive order is an official statement from the President that directs how the federal agencies are to expend their resources within the laws that are established by Congress and the Constitution. Technically, while an executive order is considered binding, it is subject to legal review and cannot be used to create new law or appropriate new funding from the U.S. Treasury. And while the use of executive orders is common, this particular executive order has drawn concern from finance officers in various jurisdictions due to the potential loss of federal grant funding for failure to comply with the order. Legal arguments against the executive order have been identified and are in development. As a member of the State and Local Legal Center, GFOA will continue to monitor the implementation of the January 25 executive order and will update GFOA members as developments occur.