The Ferguson Group Blog

House Votes For Permanent Internet Tax Ban

Earlier this week, the House passed by voice vote legislation permanently banning internet access taxes – a blow to local and state governments counting on the tax as a current or future revenue stream. 

H.R. 3086, the “Permanent Internet Tax Freedom Act,” permanently extends the moratorium first enacted in 1998 and removes the exemption enjoyed by seven states.  The bill does not address the matter of sales tax collected on interstate online purchases.  Wireless industry representatives supported passage.

Action now moves to the Senate where Sen. Ron Wyden has sponsored similar legislation.  Many local governments and organizations such as the National Association of Counties have voiced strong opposition to Senate offices.  Sen. Wyden said he is consulting with his colleagues regarding moving the bill forward but he has not indicated a timeframe within which he hopes see action on his bill.

House Passes Highway Trust Fund Patch & Authorization Extension

Yesterday, the House of Representatives passed legislation providing an $11 billion bailout to the Highway Trust Fund (HTF) and steady state funding for highway and transit projects and programs through May 2015.  Only 45 Republicans and 10 Democrats voted against H.R. 5021.  

The bill now moves to the Senate where Majority Leader Harry Reid wants to have the bill on the Senate floor before the August recess.  Environment & Public Works Committee Chairman Barbara Boxer wants the authorization portion of H.R. 5021 to end five months earlier to force additional consideration prior to the end of 2014 and is likely to offer an amendment on the floor. 

The House bill sources the $11 billion by way of customs fees, redirecting funds set aside for leaking underground storage tanks, and  “pension smoothing,” which allows companies to pay in less pension benefits and report higher taxable profits.  According to the Congressional Budget Office (CBO), allowing pension plans to use higher interest rates when calculating their future liabilities would reduce the minimum contributions that employers are required to make to such plans, leading to increases in offsetting receipts, direct spending, and revenues. The CBO report also noted its expectation that H.R. 5021 would increase the amount of underfunding in pension plans.  A Senate Finance Committee amendment with a slightly different plan to provide the $11 billion HTF bailout waits in the wings.  The Senate plan relies less on pension smoothing and more on tax law compliance enforcement.

Wednesday News Roundup

Every Wednesday, The Ferguson Group (TFG) blog posts a series of articles published over the previous week that discusses topics of interest to local governments. Learn about emerging trends and keep up on key policy issues by browsing the TFG Wednesday News Roundup!

Comcast Readies for Washington War

Shortly after announcing its intentions to merger with industry giant Time Warner Cable, Comcast began building a strategy to defend the $45 billion deal in Washington, where criticism is already adrift. Comcast consultants want to sway lawmakers, agencies, and industry groups before hearings on the merger are scheduled in the coming months.  Scrutiny, however, will be inevitable.  Read More…

Minimum Wage Increase Would Have Mixed Effects, C.B.O. Report Says

On Tuesday, the Congressional Budget Office released its assessment of the proposal to raise the minimum wage to $10.10 an hour, with mixed results that could provide supporters and critics fuel for their arguments.  The report concludes that the wage increase could reduce total employment by 500,000 by mid-2016, but could also lift 900,000 families out of poverty.  Read More…

Can A Book Club Improve Government?

The budget director for the City of Baltimore, Andrew Kleine, believes it can.  Kleine runs a book club that is open to any of the city’s 14,000 employees. With input from club members, Kleine chooses books that can spur discussion about improving government with innovative ideas, noting that several good ideas for improving Baltimore have come out of the club.  Read More…

Battling Blight: Detroit Maps Entire City to Find Bad Buildings

Since the White House created a Blight Task Force in Detroit last fall to help fight blight in the motor city, Detroit is almost done mapping all their blighted properties in the hopes of systematically redeveloping entire neighborhoods. The mapping project manager says that often several different departments in the city own properties in the same area and don’t know it, causing the city to lose thousands of dollars by demoing each property separately.  With the new system, they will be able to show the departments they have these properties in the same area, and the departments can work together to demo the properties, saving thousands of dollars.  Read More…

White House to Toughen Fuel Standards for Heavy-Duty Vehicles

Yesterday, the White House announced new, tougher fuel economy standards for heavy-duty vehicles in a continuing effort to reduce heavy-vehicle emissions, an effort that began in 2011.  The 2011 standards were only for truck models 2014 to 2018.  The new standards are targeted for model years after 2018.  Read More…

Wednesday News Roundup

White House Dials it Down on Immigration

In meetings with immigration advocates and Senate Democrats this year, it seems that the Obama Administration is looking to tone down its push on the House majority and give them “breathing room” to pass legislation in 2014. Immigration reform remains a top priority for the Administration, but it wants to give the House its chance to tackle immigration reform before stepping in.  Read More…

 

5 Trends for Emergency Management and Public Safety for 2014 and Beyond

Emergency Management Magazine, winner of the 2013 National American Society of Business Press Editors (ASBPE) Magazine of the year, brings you their forecast for the top issues emergency management will face in 2014 and beyond.  Their assessment of issues may show what your preparation plans may be lacking.  Read More…

 

Smart Snowplow Tech Turns Every Vehicle into a Weather Sensor

With technology originally developed by the U.S. Department of Transportation, several states have outfitted snowplows with “enhanced” prototype weather sensors that record and collect data that update transportation officials on weather conditions on roadways.  The system, which is still in need of tweaking, has the potential to be applied by buses, trains, and other modes of transportation to alert drivers of dangerous road conditions.  Read More…

 

Stanford Experts Urge Major Reforms in State, Local Government Budgeting

A report issued by the State Budget Crisis Task Force, with contributions from the Stanford Institute for Economic Policy and former U.S. Secretary of State George Shultz, gives recommendations to budgeters to ensure greater solvency. David Crane, contributing research scholar from Stanford, said “this report should be read by everyone who cares about future generations.” The report's key recommendation is that states should adopt accrual-based budgeting, but lists several other imperative proposals state and local governments should consider during their budgeting process.  Read More…

 

The Boldest Education Ideas from State of State Addresses So Far

It’s that time of year, folks! Governors across the country will be making their State of the State addresses and selling their constituents on their 2014 policy agendas.  So far, an emphasis on education has been seen in many speeches, some specifically citing their new policies.  Governing offers a look into the boldest education reform ideas presented thus far.  Read More…

 

Lights, Camera, $$: Tax Incentives Can Draw Productions, Financial Benefits to Cities and States

Film and TV productions used to look at locations as the most important part of their site scouting. Now, incentives are the draw for many production companies.  Both states and localities can alter their tax incentives to attract production companies. Why? The payoff can be big for the local economy.  Read More…

 

Congress Approves $1.1 Trillion Omnibus

On Thursday evening, the Senate easily passed the massive Omnibus spending bill by a vote of 72-26. The 1,582-page bill, which packages all 12 appropriations bills into one, rings in with a price tag of $1.1 trillion dollars.  Although the bill boosts spending by $26 billion over FY 2013 levels, the total budget is about $30 billion below pre-sequester levels.  It provides $63 billion in sequester relief and $85 billion in total savings over the next two years, resulting in about $23 billion in deficit reduction.

This is how the budget adds up:

   $520 for defense

+$491 million non-defense

=$1.012 trillion

+

$98 billion not subject to spending cap (mostly war spending and disaster relief)

=$1.1 trillion

 

Here are some highlights of the omnibus:

• Restores $20 billion for domestic programs that would have been cut by the sequester
• Cuts daily agency operations by $79 billion
• Increases civilian federal workers pay by 1%, the first pay increase in 4 years
• Blocks the U.S. Postal Service from ending Saturday mail delivery
• Increases TIGER funds to $600 million, a 20% increase
• Provides an additional $636 million to fight forest fires
• Decreases funding for CDBG by $278 million
• Decreases Defense Appropriations by $8 billion

The Omnibus was introduced on Monday, and sailed through the House Wednesday afternoon by a vote of 357-64.  The House and Senate had to approve a three-day extension of the current Continuing Resolution to keep the government running while they considered the massive spending package.  The three-day extension will keep the government running until 11:59PM on January 18^th, where after the new Omnibus will take effect at midnight. The Omnibus has been sent to the President for final approval. Read More…

House Passes 3 Day CR

Today the House passed a three-day extension of the current stopgap spending measure. Instead of federal funding authority running out Wednesday night, Congress now has until midnight on January 18th to pass the massive FY 2014 omnibus spending bill introduced yesterday. The House took less than five minutes to the pass the extension and the Senate is expected to vote on the CR tomorrow at noon.

As the House gears up to vote on the omnibus bill Wednesday morning, spirits are high that the measure will get the support is needs to quickly move onto the Senate. Senate Majority Lead Harry Reid said he is ready to call up the bill Wednesday after House passage. The Senate will then consider the measure until Thursday or Friday until a cloture vote is called. After the 60-vote threshold is obtained for cloture, the Senate will then bring the omnibus to the floor for a final vote. The goal is to have the bill to the President for his signature by Saturday before the new CR expires.

Wednesday News Roundup

LADP Tests Situational Awareness Tool
The Los Angeles Police Department (LAPD) has been piloting a new mapping technology that improves situational awareness and response during large-scale events and disasters.  TouchShare, this new mobile touchscreen visual geospatial mapping technology, has already been effective in improving LAPD situational awareness throughout Los Angeles during large events.  The LAPD sees a bright future for TouchShare, hoping this technology can be applied to disaster relief and response efforts, as well as connect other agencies throughout the city and state to better coordinate in the event of a disaster.  Read More…

Supreme Court Considers Cases Impacting States & Localities
This month, SCOTUS began hearings and oral arguments on several cases whose decisions could have impacts on state and local governments.  The top six cases Governing magazine discusses address hot button issues ranging from affirmative action to abortion and the first amendment.  Read More…

EPA Greenhouse-Gas Rules Draw U.S. Supreme Court Scrutiny
Although the Supreme Court will not make a final ruling on whether the EPA has authority to set new permit requirements for stationary sources of pollution like power plants and factories until next year, the Court is taking its time to hear appeals from all stakeholders. However, the Court sent a strong message Tuesday when it said it would limit its review to “whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit
greenhouse gases.”  Read More…

Obama to Push Immigration Reform ‘Day After’ Budget Deal
On Tuesday, the President said that once Congress reaches an agreement on raising the debt ceiling and reopening the government, he will push for an immigration reform vote in the House. Both chambers have bills floating around, however, trying to resolve the different approaches to reform offered by both parties will be difficult to conference.  Read More…

House Farm Bill Conference Committee Announced
Over the weekend, House Speaker John Boehner named the House members who will be on the conference committee handling the farm bill reauthorization negotiations.  Despite this strong step forward, the turbulent atmosphere in Washington makes it unclear when conference negotiations can begin.  Read More…

Private Risk, Public Benefit:  Are Social Impact Bonds the Way of the Future?
Social Impact Bonds (SIBs) are relatively new financial products that offer private capital in exchange for measurable, permanent progress addressing societal problem.  If an SIB project outcome is not met by a certain date, the government pays nothing back to investors, but if the project succeeds, the government pays investors back with a financial return.  Although these bonds seem like risky business, the payoff can be in big in more ways than one.  Read More…

 

Government Shutdown End In Sight?

In the Senate, lawmakers are working out details of an agreement that would end a partial government shutdown and avert a default on the nation’s debt ceiling in a few days. The proposed deal would suspend the debt limit through February 7, 2014, fund the government through January 15, 2014, and require a House-Senate budget conference by December 13, 2013.

Any proposal, however, could face procedural delays in the Senate and an uncertain path in the Republican-controlled House.  If Congress does nothing, the federal government would run out of borrowing authority on October 17, 2013 and start missing payments sometime between October 22 and October 31 according to the Congressional Budget Office.

Treasury Report Highlights Potential Impacts of a Congressional Debt Ceiling Impasse

A recent report by the U.S. Treasury Department focused on the macroeconomic effect of the potential debt ceiling impasse in the Congress.  The report points out that the United States has never in its history defaulted on its financial obligations and, as a result, the U.S. dollar and Treasury securities are “at the center of the international financial system.”  The report goes on to state that a default brought on by the inability of Congress and the Administration to come to an agreement to raise the borrowing limit could be potentially catastrophic for the economy.  The impact could freeze credit markets, devalue the dollar, and hike U.S. interest rates, with the corresponding financial effects being felt around the world.  The report states that even the “prospect” of a default can have negative impacts to financial markets, using the fallout from the 2011 debt ceiling impasse as an example of what can happen (downgrading of government credit ratings, falling stock prices, financial volatility, etc.). 

The report goes on to analyze the economic impacts that were realized in 2011, including the resulting effects on mortgage rates, consumer confidence and business optimism.  The report concludes that a potential 2013 debt limit impasse and resulting default on U.S. obligations (which cover federal expenditures that have already been appropriated by Congress and spent by the Administration) could have an even harsher catastrophic effect on “not just financial markets but also on job creation, consumer spending, and economic growth” than those experienced in 2011.  The Treasury report states that these events could be of a magnitude equal to or greater than the 2008 recession, and concludes “considering the experience of countries around that world that have defaulted on their debt, not only might the economic consequences of default be profound, those consequences, including high interest rates, reduced investment, higher debt payments, and slow economic growth, could last for more than a generation.”  You can read the report at here.

How to Pay for the Next Transportation Bill

The current transportation authorization bill (“MAP-21”) expires next year. A recently-released report from the Congressional Research Service (CRS) says that if Congress were to pass a six-year transportation reauthorization bill that increases spending on surface transportation programs in line with inflation, it would need to fill a nearly $80 billion gap. With more fuel efficient vehicles and reliance on public transit, just raising the gas tax isn’t going to cut it, so what are some other options?

The CRS report lists some options. Like in Virginia, a federal motor fuels tax could be assessed as a percentage of the retail price of fuel instead of a fixed amount per gallon. There is also the vehicle miles traveled option that would track and charge you for the number of miles you put on your car. This option raises privacy and fairness concerns however. How about expanding the use of tolls on federal highways? That option has its share of detractors as well.

Congress certainly has its hands full as it looks for ways to bolster the highway trust fund to help pay for our aging infrastructure. The clock is ticking…