2013 NACo Legislative Policy Briefs Legislative Policy... · 2013 NACo Legislative Policy Briefs ... 2013 Legislative Priorities T he members of the National Association of Counties

2013 NACo Legislative Policy Briefs In preparation for your attendance at the 2013 NACo Legislative Conference March 2 – 6, we have prepared

a number of policy briefs on critical federal legislative and policy issues facing the nation’s counties. These

policy briefs cover issues including community and economic development, transportation and infrastructure,

public health, justice and public safety, human services and education, public lands, environment and energy,

telecommunications, labor and employment, finance and many more.

In each policy brief, you will find information on the type of action needed on the issue, background

information including why the issue matters to counties, key talking points and a listing of the Congressional

committees of jurisdiction. We hope that you will use these while you are in Washington, D.C. during your

meetings on Capitol Hill and with federal agencies! If you need additional copies of the policy briefs to take

with you to meetings, please visit the Legislative Resource Center at the conference. They can also be

downloaded through the conference app.

The following policy briefs are available:

Agriculture and Rural Affairs

Maintain Funding for USDA Rural Development Programs

Support Farm Bill Reauthorization that Bolsters Rural Development

Community and Economic Development

HUD Community Development Block Grants (CDBG): Support Local Development and Infrastructure

Projects

U.S. Economic Development Administration: Essential Seed Capital/Gap Financing for Local Job Creation

Restore funding for HUD’s home investment Partnerships (HOME) program

Environment, Energy and Land Use

Property Assessed Clean Energy Program (PACE) Update

Stop “Waters of the U.S.” Guidance

Finance and Intergovernmental Affairs

Oppose Efforts to Eliminate or Limit the Tax-Exempt Status of Municipal Bonds

Support Local Revenues by Allowing the Collection of Sales Taxes on Out-of-State Catalog and Online Sales

2013 Facts You Should Know - State and Municipal Bankruptcy, Municipal Bonds, State and Local Pensions

Health

Protect the Prevention and Public Health Fund

Protect the Federal-State-Local Partnership for Medicaid

Fund the Substance Abuse and Mental Health Services Administration

Extend Health Benefit Coverage to Pre-Trial Jail Inmates

Human Services and Education

Reauthorize Temporary Assistance for Needy Families (TANF) Block Grant

Justice and Public Safety

Support Vulnerable Youth: Reauthorize the Juvenile Justice and Delinquency Prevention Act

Reauthorize the Mentally Ill Offender Treatment and Crime Reduction Act

Lower Jail Recidivism and Reinvest the Savings: Support the Second Chance Act

Labor and Employment

Support Reauthorization of the Workforce Investment Act (WIA)

Support Funding For Workforce Development Programs

2013 Facts You Should Know - State and Municipal Bankruptcy, Municipal Bonds, State and Local Pensions

Public Lands

Continue Mandatory Funding for the Payment in Lieu of Taxes (PILT) Program

Revenue Sharing Payments to Forest Counties

Telecommunications and Technology

Important Role of Counties in the First Responder Network Authority (FirstNet)

Transportation

Support County Surface Transportation Priorities

2013 Legislative Priorities

The members of the National Association of Counties (NACo) support federal policies and programs that provide the tools, resources and solutions needed to spur job growth,

improve quality of life and increase the economic competitiveness of America’s local counties and communities.

The nation’s 3,068 county governments provide the essential building blocks to create healthy, vibrant and safe communities. This includes supporting and maintaining key public infrastructure, transportation and economic development assets; creating and sustaining a skilled workforce to meet the needs of private industry; ensuring public health and public safety needs to protect our citizens; and implementing a broad portfolio of federal, state and local programs in a cost-effective and accountable manner.

People depend on counties to provide services that protect their homes, schools and neighborhoods. Counties maintain safe roads, bridges, airports and transit systems and ensure that we

have clean water and effective wastewater systems. Counties operate our courts and jails, and maintain our parks and recreation programs, libraries, waste and recycling facilities.

Counties also provide access to health care, especially for the uninsured and indigent, and serve as the community “safety net” for our children, elderly, disabled, mentally ill and anyone in need. Counties are also instrumental in moving their communities forward by providing the business conditions, critical infrastructure and capital necessary for private industry to flourish.

At a time when federal, state and local budgets have been slashed, counties have had to balance their budgets yet continue shouldering so many of the critical programs and services that people, industry and communities depend upon. Therefore, we urge Congress and the Administration to establish a sustainable path forward for our country and encourage a balanced approach to deficit reduction.

infrastructure development. As the level of government often responsible for implementing the federal safety net and critical public services, including Medicaid, social services, justice and public safety programs, counties are most affected by reductions in federal funding.

Protect County Revenue and Investment StrategiesNACo members support the preservation of the federal deductibility of local property and income taxes and the tax exempt status of municipal bonds that provide critical funding for public facilities, infrastructure and development. Furthermore, we support legislative initiatives that permit the collection of existing sales and use taxes from remote sellers. Counties continue to be concerned about efforts at the federal level that would provide preferential treatment to any industry seeking to create its own special immunity from state and local taxation.

Protect Federal-State-Local Partnership for MedicaidNACo members support maintaining the federal-state-local partnership structure for financing and delivering Medicaid services. We continue to be concerned about measures that would further shift federal and state Medicaid costs to counties including cuts, caps or block grants.

Support Key Federal Investments in Programs that Promote Local Job Creation and Economic GrowthNACo members support fully funding key federal programs and investments that support the nation’s future economic growth and improved local conditions, including HUD’s Community Development Block Grant (CDBG) Program and HOME Program, the U.S. Economic Development Administration (EDA), investments in local workforce development programs, and investments in highway, transit, aviation, port and water

The following are America’s counties’ top priorities for the 113th Congress:

NATIONAL ASSOCIATION OF COUNTIES | 25 MASSACHUSETTS AVENUE, N.W. | SUITE 500 | WASHINGTON, D.C. 20001 | (202) 393-6226 | FAX (202) 393-2630 | WWW.NACO.ORG

Support Federal Land Revenue Sharing and Payment in Lieu of Taxes ProgramsNACo members support extending full mandatory funding for the Payment in Lieu of Taxes (PILT) Program as well as legislative efforts to reform and fund the expired Secure Rural Schools (SRS) program. PILT compensates counties for tax-exempt federal land within their boundaries, while SRS provides payments to counties to compensate for significant declines in federal revenue sharing obligations due to reductions in federal land management activities on the National Forest System.

Oppose Unfunded and Underfunded Mandates NACo members urge federal policymakers to respect and protect local decision-making authority at the county level. This includes strengthening intergovernmental dialogue and solutions focused on enhancing federal, state, local collaboration and local flexibility.

Promote County Priorities within Immigration ReformNACo members urge policymakers to consider the financial impact of immigration on county governments. Counties are required by law to provide health, public safety and education services for these populations. We support comprehensive immigration reform that includes a modernized legal immigration system, establishes a temporary worker program, provides an earned path to citizenship and enhances border security. Support Rural Development Initiatives and the Farm BillNACo members support federal investments and gap financing for rural development and will work to prioritize and increase the national and local flexibility of these investments through a Farm Bill reauthorization and funding for USDA Rural Development programs. These programs assist rural counties in their efforts to partner with all sectors to develop essential community and economic building blocks, such as water/wastewater infrastructure, community facilities, broadband, electric, housing, renewable energy and capital for businesses and entrepreneurs.

Edwin RosadoLegislative Director(202) 942-4271 [email protected] Deborah CoxDeputy Legislative DirectorTelecommunications & Technology(202) 942-4286 [email protected]

Paul BeddoeAssociate Legislative DirectorHealth(202) 942-4234 [email protected]

Michael BelarminoAssociate Legislative DirectorFinance & Intergovernmental Affairs(202) 942-4254 [email protected]

Daria DanielAssociate Legislative DirectorCommunity & Economic Development(202) 942-4212 [email protected]

Bob FogelSenior Legislative DirectorTransportation(202) 942-4217 [email protected]

Deseree GardnerAssociate Legislative DirectorLabor & Employment(202) 942-4204 [email protected]

Dalen HarrisAssociate Legislative DirectorJustice & Public SafetyLarge Urban County Caucus(202) 942-4236 [email protected]

Yejin JangLegislative Affairs Advocate and Grassroots Coordinator(202) 942-4239 [email protected]

Erik JohnstonAssociate Legislative DirectorAgriculture & Rural AffairsRural Action Caucus(202) 942-4230 [email protected]

Marilina SanzAssociate Legislative DirectorHuman Services & Education(202) 942-4260 [email protected]

Julie UfnerAssociate Legislative DirectorEnvironment, Energy & Land Use(202) 942-4269 [email protected]

Ryan YatesAssociate Legislative DirectorPublic Lands(202) 942-4207 [email protected]

2013 Legislative Priorities Staff Contact Directory

fb.com/NACoDC • twitter.com/NACoTweets • youtube.com/NACoVideo • linkedin.com/NACoDC www.NACo.org

About the National Association of CountiesThe National Association of Counties (NACo) assists America’s counties in pursuing excellence in public service by advancing sound public policy, promoting peer learning and accountability, fostering intergovernmental and public-private collaboration, and providing value-added services to save counties and taxpayers money.

Founded in 1935, NACo provides the elected and appointed leaders from the nation’s 3,068 counties with the knowledge, skills and tools necessary to provide fiscally-responsible, quality-driven and results-oriented policies and services for healthy, vibrant, safe and fiscally resilient counties.

Matthew D. ChaseExecutive Director

(202) 942-4201 [email protected]

NATIONAL ASSOCIATION OF COUNTIES | 25 MASSACHUSETTS AVENUE, N.W. SUITE 500 | WASHINGTON, D.C. 20001 | 202.393.6226 | FAX 202.393.2630 | WWW.NACO.ORG

FB.COM/NACODC | TWITTER.COM/NACOTWEETS | YOUTUBE.COM/NACOVIDEO | LINKEDIN.COM/IN/NACODC

• Overall, USDA Rural Development budget authority has been cut by almost 1/3 since 2003

• USDA Rural Development grant and loan programs help over 2,126 rural counties with the basic building blocks for rural community and economic development

• Grants are mostly used to make

projects more affordable for users/rate payers in the most rural locations. Locals provide significant match and pay back loans at high enough rates that USDA operates the loan programs at little or no cost

MAINTAIN FUNDING FOR USDA RURAL DEVELOPMENT PROGRAMS

ACTION NEEDED: Urge your Members of Congress to maintain funding for U.S. Department of Agriculture (USDA) Rural Development programs in the FY2013 and FY2014 appropriations process at $2.2 billion and to support efforts to ensure that the programs target local and regional priorities. BACKGROUND: USDA Rural Development operates a broad range of grant and loan programs that are critical to rural counties. These programs include grant funding and loan financing for water/wastewater infrastructure, community facilities, broadband, electric, telephone, housing, renewable energy and business development. USDA Rural Development programs create jobs and enhance economic prosperity in rural communities. The agency is currently funded at the FY2012 level of $2.2 billion under a Continuing Resolution (CR) until March 27, 2013. This level of funding represents a cut of $732 million or 25 percent in budget authority from the FY2010 enacted level. These drastic cuts over recent years have hampered the agency’s ability to partner with local governments, businesses and rural people to create rural jobs and improve local living conditions. Recent cuts should be restored and, at a minimum, these programs should be maintained at level funding, especially grant funding in order for distressed rural communities to be economically competitive and address basic, yet essential, community needs. KEY ISSUES:

• Support USDA Rural Development funding at the FY2012 enacted

level of $2.2 billion. The agency and its critical county supported programs have been cut by 25 percent since 2010. Further cuts will continue to weaken economic development opportunities and basic living conditions in rural counties.

• Support maintaining grant funding for USDA rural water infrastructure and community facilities programs, which are especially critical to economic development efforts in rural communities. NACo supports maintaining $469 million for Rural Water and Waste Program Grants and $20.37 million in funding for Community Facility Grants. USDA uses its limited grant funding to assist the most economically depressed rural areas with fundamental community and public services.

• Support rural business programs which leverage public and private sector resources to create new jobs. NACo supports $97.11 million in budget authority for the Rural Business Program Account, which includes the Rural Business Enterprise Grants, Rural Business Opportunity Grants, and Business and Industry Loans. NACo also supports maintaining funding for the Intermediary Relending Program, the Rural Microenterprise Assistance Program, the Value Added Producer Grants, and the Rural Energy for America Program. All of these programs create new economic opportunities in small, rural areas and assist those farmers and entrepreneurs struggling to secure traditional credit and loans.

QUICK FACTS

NATIONAL ASSOCIATION OF COUNTIES |25 MASSACHUSETTS AVENUE, N.W. SUITE 500 | WASHINGTON, D.C. 20001 | 202.393.6226 | FAX 202.393.2630 | WWW.NACO.ORG

• Support Regional Innovation and Flexibility. The FY2012 Agriculture Appropriations bill that was wrapped into the Minibus (P.L. 112 – 55) included language supporting the Regional Innovation Initiative. NACo urges continued support of this initiative which is designed to give USDA Rural Development the flexibility to focus some agency support on innovative locally-driven projects. The initiative will target five percent of several existing rural development programs to economic development projects that represent regional priorities.

COMMITTEES OF JURISDICTION:

U.S. House Appropriations Committee U.S. Senate Appropriations Committee Majority: Harold Rogers (R-KY), Chairman C.W. Bill Young (R-FL) Jo Bonner (R-AL) Tom Cole (R-OK) Frank R. Wolf (R-Va.) Mario Diaz-Balart (R-FL) Jack Kingston (R-GA) Charles Dent (R-PA) Rodney Frelinghuysen (R-NJ) Tom Graves (R-GA) Tom Latham (R-IA)* Kevin Yoder (R-KS)* Robert B. Aderholt (R-AL)* Steve Womack (R-AR) Andy Harris (R-MD) Minority: Nita Lowey (D-NY), Ranking Member Marcy Kaptur (D-OH) Sanford Bishop (D-GA) * Pete Visclosky (D-IN) Barbara Lee (D-CA) Bill Owens (D-NY) José Serrano (D-NY) Adam Schiff (D-CA) Rosa DeLauro (D-CT)* Michael Honda (D-CA) Mike Quigley (D-IL) *Member of the U.S. House Appropriations Subcommitteeon Agriculture, Rural Development, Food & Drug Administration and Related Agencies

David Valadao (R-CA) Alan Nunnelee (R-MS)* Kay Granger (R-TX) Jeff Fortenberry (R-NE)* Michael Simpson (R-ID) Tom Rooney (R-FL)* John Abney Culberson, (R-TX) Chuck Fleischmann (R-TN) Ander Crenshaw, (R-FL) David Valadao (R-CA)* John R. Carter (R-TX) David Joyce (R-OH) Rodney Alexander (R-LA) Ken Calvert (R-CA) Jaime Herrera Beutler (R-WA) James Moran (D-VA) Betty McCollum (D-MN) Ed Pastor (D-AZ) Tim Ryan (D-OH) David Price (D-NC) Debbie Wasserman Schultz (D-FL) Lucille Roybal-Allard (D-CA) Sam Farr (D-CA)* Henry Cuellar (D-TX) Chaka Fattah (D-PA) Chellie Pingree (D-ME)*

Majority: Barbara Mikulski (D-MD), Chairwoman Patrick Leahy (D-VT) Tom Harkin (D-IA)* Patty Murray (D-WA) Dianne Feinstein (D-CA)* Richard Durbin (D-IL) Tim Johnson (D-SD)* Mary Landrieu (D-LA) Jack Reed (D-RI) Frank Lautenberg (D-NJ) Mark Pryor (D-AR)* Jon Tester (D-MT)* Tom Udall (D-NM)* Jeanne Shaheen (D-NH) Jeff Merkley (D-OR)* Mark Begich (D-AK) Minority: Richard Shelby (R-AL), Vice Chairman Thad Cochran (R-MS) Mitch McConnell (R-KY) * Lamar Alexander (R-TN) Susan Collins (R-ME) * Lisa Murkowski (R-AK) Lindsey Graham (R-SC) Mark Kirk (R-IL) Dan Coats (R-IN) Roy Blunt (R-MO)* Jerry Moran (R-KS) * John Hoeven (R-ND) * Mike Johanns (R-NE) John Boozman (R-AR) *Member of the U.S. Senate Appropriations Subcommitteeon Agriculture, Rural Development, Food & Drug Administration and Related Agencies

For further information, contact: Erik Johnston at 202.942.4230 or [email protected]

mailto:[email protected]



• The mandatory funding invested in USDA renewable energy programs through the 2008 Farm Bill assisted 6,600 projects nationwide, employing 15,000 people

• According to the Agriculture Energy Coalition, within the next decade, farm energy programs could generate as many as 700,000 jobs and $88.5 billion in economic activity for rural America

• The $150 million invested in the Rural Development Title of the 2008 Farm Bill funded 89 entities in 39 states to develop the capacity to provide critical training and financing to rural microenterprises, bolstered the Value Added Producer Grant program which is an effective public-private partnership bringing hundreds of self-sustaining products to market each year and helped finance 176 water/wastewater projects that are critical to economic survival in their rural service areas

• The current backlog of unfinanced USDA Rural Development water/wastewater project applications in rural communities is $3.2 billion

SUPPORT FARM BILL REAUTHORIZATION THAT BOLSTERS RURAL DEVELOPMENT

ACTION NEEDED: Urge your members of Congress and the Administration to support a robust Farm Bill reauthorization that supports mandatory funding for conservation, renewable energy, rural development and beginning farmers/ranchers programs. The next Farm Bill reauthorization should make rural development programs a priority and align rural development funding towards local and regional priorities.

BACKGROUND: The Farm Bill is a large piece of legislation which authorizes a broad range of programs that are critical to counties. The legislation authorizes, and in some cases funds, programs that assist counties in their rural development efforts, nutrition assistance programs, conservation initiatives, renewable energy deployment, support for new farmers/ranchers, and business development initiatives. All titles of the Farm Bill are important to the vitality of our nation, therefore, NACo supports the timely completion and long term stability of a multi-year reauthorization bill. The 2008 Farm Bill expired on September 30, 2012. On January 1, 2013, Congress passed the fiscal cliff deal (H.R. 8), which included an extension of the Farm Bill through September 30, 2013 but ended mandatory funding for NACo priority programs in the Rural Development Title ($150 million cut), Renewable Energy Title ($1 billion cut) and the Beginning Farmer/Rancher Program ($75 million cut). The full Senate and the House Agriculture Committee passed bipartisan Farm Bills in the 112th Congress. However, the House Farm Bill never reached the floor. The Senate plans to pass a Farm Bill again in 2013, but the outlook in the House remains uncertain. KEY TALKING POINTS:

• The current extension of the Farm Bill leaves many county

priorities unfunded. It is critical that Congress pass a Farm Bill that will maintain conservation and nutrition assistance programs and restore mandatory funding for rural development, renewable energy and beginning farmer/rancher programs.

QUICK FACTS


• The next Farm Bill will make cuts, but they should not fall disproportionately on the titles of the bill that create jobs and promote rural innovation. Therefore, we urge you to maintain $150 million in mandatory funding for the Rural Development Title, $1 billion in mandatory funding for the Renewable Energy Title and $75 million in mandatory funding for the Beginning Farmer/Rancher Development Program.

• Please support Farm Bill policy changes that improve USDA Rural Development programs by simplifying applications, enhancing technical assistance for rural counties and other stakeholders and ensuring funding decisions are based on the strategic priorities of rural regions and counties.


For further information, contact: Erik Johnston at 202.942.4230 [email protected]

U.S. House Agriculture Committee U.S. Senate Agriculture, Nutrition & Forestry Committee

Majority: Frank Lucas (R-OK), Chairman Bob Goodlatte (R-VA) Steve King (R-IA) Randy Neugebauer (R-TX) Mike Rogers (R-AL) K. Michael Conaway (R-TX) Glenn Thompson (R-PA) Bob Gibbs (R-OH) Austin Scott (R-GA) Scott Tipton (R-CO) Steve Southerland (R-FL)

Rick Crawford (R-AR) Martha Roby (R-AL) Scott Desjarlais (R-TN) Chris Gibson (R-NY) Vicky Hartzler (R-MO) Reid Ribble (R-WI) Kristi Noem (R-SD) Dan Benishek (D-MI) Jeff Denham (R-CA) Doug LaMalfa (R-CA) Richard Hudson (R-NC) Rodney Davis (R-IL) Chris Collins (R-NY) Ted Yoho (R-FL)

Majority: Debbie Stabenow (D-MI), Chairman Patrick Leahy (D-VT) Tom Harkin (D-IA) Max Baucus (D-MT) Sherrod Brown (D-OH) Mo Cowan (D-MA) Amy Klobuchar (D-MN) Michael Bennet (D-CO) Kirsten Gillibrand (D-NY) Joe Donnelly (D-IN) Heidi Heitkamp (D-ND) Minority: Thad Cochran (R-MS), Ranking Member Pat Roberts (R-KS) Mitch McConnell (R-KY) Saxby Chambliss (R-GA) Mike Johanns (R-NE) John Boozman (R-AR) Chuck Grassley (R-IA) John Thune (R-SD) John Hoeven (R-ND)

Minority: Collin Peterson (D-MN), Ranking Member Mike McIntyre (D-NC) David Scott (D-GA) Jim Costa (D-CA) Timothy J. Walz (D-MN) Kurt Schrader (D-OR) Marcia Fudge (D-OH) Jim McGovern (D-MA) Suzan DelBene (D-WA) Gloria Negrete McLeod (D-CA)

Filemon Vela (D-TX) Michelle Lujan Grisham (D-NM) Ann Kuster (D-NH) Rick Nolan (D-MN) Pete Gallego (D-TX) William Enyart (D-IL) Juan Vargas (D-CA) Cheri Bustos (D-IL) Sean Patrick Maloney (D-NY) Joe Courtney (D-CT)




• Counties use the flexibility of CDBG

to partner with private and non-profit sectors to address local community and economic development, housing, water, infrastructure and human service needs

• CDBG provides vital resources for

local economic development, job creation and retention projects

• According to the U.S. Department

of Housing and Urban Development, for every $1 of CDBG funds, another $3 is leveraged in private sector and/or other public funding

• Currently funded at $2.95 billion,

CDBG has been cut by 25 percent ($1 billion) since FY2010. Funding should be restored to $3.3 billion

HUD COMMUNITY DEVELOPMENT BLOCK GRANTS (CDBG):

SUPPORT LOCAL DEVELOPMENT AND INFRASTRUCTURE PROJECTS

ACTION NEEDED: Urge your House and Senate members to restore funding for the U.S. Department of Housing and Urban Development’s (HUD) Community Development Block Grant (CDBG) program to $3.3 billion for FY2013 and FY2014. CDBG has been drastically reduced in recent years, having been cut by nearly 25 percent or $1 billion since FY2010.

BACKROUND: The CDBG program was enacted in 1974 to provide block grant funding for community development programs. The program assists urban, suburban and rural communities to improve housing and living conditions, and expand economic opportunities for low- and moderate income persons.CDBG helps to create jobs through the expansion and retention of businesses. CDBG is an important tool for helping local governments tackle serious challenges facing their communities. Counties use the flexibility of CDBG funds to partner with the private and non-profit sectors to develop and upgrade local housing, community and economic development, water and infrastructure projects, and human services programs. Counties rely on the flexibility of CDBG funds to meet their particular community development needs.

The CDBG program provides annual grants on a formula basis to 1,209 metropolitan city and county governments and states. There are 175 counties that receive grants directly. Local entitlement cities and counties receive 70 percent of CDBG funds, and states receive 30 percent. Non-entitlement communities, such as rural counties, must compete for funding via the state formula allocation. HUD determines the amount of each grant by using a formula comprised of several measures of community need, including the extent of poverty, population, housing overcrowding, age of housing and population growth lag in relationship to other metropolitan areas.

Currently,CDBG is funded at $2.95 billion under the FY2013 Continuing Resolution (CR) until March 27, 2013. The Obama Administration’s FY2013 budget included level funding of $2.95 billion for CDBG, while the House Transportation, Housing and Urban Development (T-HUD) Appropriations Committee funded CDBG at $3.3 billion. The Senate T-HUD Appropriations Committee funded CDBG at $3.1 billion.

QUICK FACTS


KEY TALKING POINTS:

• Funding for the CDBG program should be restored to $3.3 billion for FY2013 and FY 2014. The CDBG program has faced drastic cuts in recent years, falling by over $1 billion since FY2010. CDBG is currently funded at $2.95 billion under the FY2013 Continuing Resolution (CR). CDBG funding cuts have already contributed to deficit reduction. Further cuts will hurt local job creation and community development investments.

• Counties utilize the flexibility of CDBG funds to support projects that meet their local priorities in addressing community and economic development, housing, water and infrastructure and human services needs.

• The CDBG program provides vital resources for state and local governments to make investments to support economic development and improve community conditions.

• According to HUD, for every $1 of CDBG funds, an estimated $3 is leveraged in non-CDBG funds. Over the last decade, CDBG has created or retained 334,000 permanent jobs and sustained an additional 861,000.


For more information contact Daria Danielat 202.942.4212 or [email protected]

U.S. House Appropriations Committee U.S. Senate Appropriations Committee Majority: Harold Rogers (R-KY), Chairman Mario Diaz-Balart (R-FL) C.W. Bill Young (R-FL) Charles Dent (R-PA)* Frank R. Wolf (R-Va.)* Tom Graves (R-GA) Jack Kingston (R-GA) Kevin Yoder (R-KS) Rodney Frelinghuysen (R-NJ) Steve Womack (R-AR) Tom Latham (R-IA)* Alan Nunnelee (R-MS) Robert B. Aderholt (R-AL) Jeff Fortenberry (R-NE) Kay Granger (R-TX)* Tom Rooney (R-FL) Michael Simpson (R-ID) Chuck Fleishmann(R-TN) John Abney Culberson, (R-TX) Jaime H. Beutler (R-WA)* Ander Crenshaw, (R-FL) David Joyce (R-OH)* John R. Carter (R-TX) David Valadao (R-CA) Rodney Alexander (R-LA) Andy Harris (R-MD) Ken Calvert (R-CA) Jo Bonner (R-AL) Tom Cole (R-OK)* Minority: Nita Lowey (D-NY), Ranking Member Marcy Kaptur (D-OH) Barbara Lee (D-CA) Pete Visclosky (D-IN) Adam Schiff (D-CA) José Serrano (D-NY) Michael Honda (D-CA) Rosa DeLauro (D-CT) Betty McCollum (D-MN) James Moran (D-VA) Tim Ryan (D-OH)* Ed Pastor (D-AZ)* Debbie Wasserman- David Price (D-NC)* Schultz (D-FL) Lucille Roybal-Allard (D-CA) Henry Cueller (D-TX) Sam Farr (D-CA) Chellie Pingree (D-ME) Chaka Fattah (D-PA) Mike Quigley (D-IL)* Sanford Bishop (D-GA) Bill Owens (D-NY) * Member of the U.S. House Appropriations Subcommittee on Transportation, Housing and Urban Development

Majority: Barbara Mikulski (D-MD), Chairwoman* Patrick Leahy (D-VT) * Tom Harkin (D-IA)* Patty Murray (D-WA)* Dianne Feinstein (D-CA) * Richard Durbin (D-IL)* Tim Johnson (D-SD)* Mary Landrieu (D-LA) Jack Reed (D-RI)* Frank Lautenberg (D-NJ)* Mark Pryor (D-AR)* Jon Tester (D-MT) Tom Udall (D-NM) Jeanne Shaheen (D-NH) Jeff Merkley (D-OR) Mark Begich (D-AK) Minority: Richard Shelby (R-AL), Vice Chairman* Thad Cochran (R-MS) Mitch McConnell (R-KY) Lamar Alexander (R-TN)* Susan Collins (R-ME)* Lisa Murkowski (R-AK) Lindsey Graham (R-SC) * Mark Kirk (R-IL)* Dan Coats (R-IN)* Roy Blunt (R-MO)* Jerry Moran (R-KS)* John Hoeven (R-ND) Mike Johanns (R-NE) John Boozman (R-AR)* * Member of the U.S. Senate Appropriations Subcommittee on Transportation, Housing and Urban Development




• EDA is important to counties because it serves as a catalyst in helping local communities achieve long-term economic growth. EDA grants are particularly critical for rural areas, where resources for economic development are scarce

• EDA focuses solely on private sector job creation and economic growth. EDA investments are focused on high quality jobs, especially in advanced manufacturing, science and technology, and emerging knowledge-based industries and sectors

• EDA’s infrastructure investments are

targeted at essential facilities and assets like water and wastewater systems, middle mile broadband networks, workforce training centers, business incubators, intermodal facilities, and science and research parks

• EDA grants are awarded on a

competitive basis, and EDA funded projects typically require a 50 percent local cost share and significant private sector investment

U.S. ECONOMIC DEVELOPMENT ADMINISTRATION (EDA): SUPPORT ESSENTIAL SEED CAPITAL/GAP FINANCING FOR LOCAL JOB CREATION

ACTION NEEDED: Urge your House and Senate members to support level funding for the U.S. Economic Development Administration (EDA) at $257.5 million for FY2013 and FY2014 under the Commerce-Justice-Science Appropriations bill. EDA funding is important to counties because these resources serve as catalyst in helping local communities achieve long-term economic growth based on local and/or regional priorities. BACKROUND:The U.S. Economic Development Administration (EDA) is the only federal agency with a mission focused solely on private sector job creation in distressed areas. EDA has developed an impressive track record of making strategic investments and building partnerships that help regions and communities respond to shifts in international markets, address severe unemployment challenges, and recover from plant closures, major natural disasters, and other chronic and sudden and severe economic hardships. At a time when the nation must make the public sector investments necessary to compete in the global economy, the flexibility, partnership structure, and accountability of EDA’s programs should be at the forefront of the federal toolbox. EDA’s portfolio of economic development infrastructure, business development finance, regional innovation strategies, and public-private partnerships are tailored to support the unique needs of each region. EDA-funded projects are awarded on a competitive basis and typically require a 50 percent local match and significant private sector investment, helping to ensure projects have local support and are part of a broader regional strategy. EDA is currently funded at $257.5 million under a Continuing Resolution (CR) until March 27, 2013. The Obama Administration requested $219 million for EDA for FY2013, $38 million below the FY2012 enacted level ($257.5 million). This represents a 25 percent

QUICK FACTS


reduction since FY2010. Last year, the Senate Commerce, Justice and Science (CJS) Appropriations Committee approved a FY2013 appropriations bill with $238 million for EDA, approximately $19 million below current funding. The U.S. House of Representatives passed its version of the FY2013 CJS Appropriations bill (H.R. 5326) with $219 million for EDA, $38 million below FY2012. EDA funding has decreased in recent years, and has been discussed for consolidation and even elimination. Rep. Mike Pompeo (R-KS) plans to introduce legislation in the U.S. House of Representatives to eliminate EDA. KEY TALKING POINTS:

• EDA focuses solely on private sector job creation and economic growth. EDA investments are focused on high quality jobs, especially in advanced manufacturing, science and technology, and emerging knowledge-based industries and sectors.

• EDA’s infrastructure investments are targeted at essential facilities and assets like water and wastewater systems, middle mile broadband networks, workforce training centers, business incubators, intermodal facilities, and science and research parks.

• EDA’s grants are awarded on a competitive basis, based on regional comprehensive economic development strategies (CEDs), and are developed and prioritized by local communities. This helps ensure projects have significant local support and are part of a broader regional plan, rather than just isolated, uncoordinated local projects.

• Under federal law, EDA projects typically require a 50 percent local cost share and significant private sector investment, ensuring that local leaders and businesses are committed to the project’s success.

• EDA funds projects to address economic development issues, including regional innovation strategies, public infrastructure, business loan funds, plant closings, base closures and natural disasters. EDA’s infrastructure investments are targeted at essential facilities such as water and wastewater systems, business incubators, access roads, ports, intermodal facilities, and science and technology parks.

• EDA grants are critical for county economic development, particularly rural areas where such resources are often scarce.

• EDA must focus on investments to the nation’s most distressed areas and also places suffering from

sudden or severe economic dislocation.

For further information, contact: Daria Daniel at 202.942.4212 or [email protected]




U.S. House Appropriations Committee U.S. Senate Appropriations Committee Majority: Harold Rogers (R-KY), Chairman Mario Diaz-Balart (R-FL) C.W. Bill Young (R-FL) Charles Dent (R-PA) Frank R. Wolf (R-Va.)* Tom Graves (R-GA)* Jack Kingston (R-GA) Kevin Yoder (R-KS) Rodney Frelinghuysen (R-NJ) Steve Womack (R-AR) Tom Latham (R-IA) Alan Nunnelee (R-MS) Robert B. Aderholt (R-AL)* Jeff Fortenberry (R-NE) Kay Granger (R-TX) Tom Rooney (R-FL)* Michael Simpson (R-ID) Chuck Fleishman (R-TN) John Abney Culberson, (R-TX)* Jaime H. Beutler (R-WA) Ander Crenshaw, (R-FL) David Royce (R-OH) John R. Carter (R-TX) David Valadao (R-CA) Rodney Alexander (R-LA) Andy Harris (R-MD)* Ken Calvert (R-CA) Jo Bonner (R-AL)* Tom Cole (R-OK) Minority: Nita Lowey (D-NY), Ranking Member Marcy Kaptur (D-OH) Barbara Lee (D-CA) Pete Visclosky (D-IN) Adam Schiff (D-CA)* José Serrano (D-NY)* Michael Honda (D-CA)* Rosa DeLauro (D-CT) Betty McCollum (D-MN) James Moran (D-VA) Tim Ryan (D-OH) Ed Pastor (D-AZ) Debbie Wasserman- David Price (D-NC) Schultz (D-FL) Lucille Roybal-Allard (D-CA) Henry Cueller (D-TX) Sam Farr (D-CA) Chellie Pingree (D-ME) Chaka Fattah (D-PA)* Mike Quigley (D-IL) Sanford Bishop (D-GA) Bill Owens (D-NY) * Member of the U.S. House Appropriations Subcommittee on Transportation, Housing and Urban Development

Majority: Barbara Mikulski (D-MD), Chairwoman* Patrick Leahy (D-VT)* Tom Harkin (D-IA) Patty Murray (D-WA) Dianne Feinstein (D-CA)* Richard Durbin (D-IL) Tim Johnson (D-SD) Mary Landrieu (D-LA)* Jack Reed (D-RI)* Frank Lautenberg (D-NJ)* Mark Pryor (D-AR)* Jon Tester (D-MT) Tom Udall (D-NM) Jeanne Shaheen (D-NH)* Jeff Merkley (D-OR)* Mark Begich (D-AK) Minority: Richard Shelby (R-AL), Vice Chairman* Thad Cochran (R-MS) Mitch McConnell (R-KY)* Lamar Alexander (R-TN)* Susan Collins (R-ME)* Lisa Murkowski (R-AK)* Lindsey Graham (R-SC)* Mark Kirk (R-IL)* Dan Coats (R-IN) Roy Blunt (R-MO) Jerry Moran (R-KS) John Hoeven (R-ND) Mike Johanns (R-NE) John Boozman (R-AR)* * Member of the U.S. Senate Appropriations Subcommittee on Transportation, Housing and Urban Development



• Counties rely on HOME funding to help provide affordable housing for low-income families and to improve the overall quality of life in local communities

• HOME funds provide counties with the flexibility to design policies and programs that address local affordable housing needs

• According to the U.S. Department of Housing and Urban Development, every $1.00 of HOME funds leverages $4.00 of private and other public funds

• Since 1990, HOME funding has helped produce over 1 million units of affordable housing

• HOME funding has been reduced by over 40 percent ($825 million) since FY2010

RESTORE FUNDING FOR HUD’S HOME INVESTMENT PARTNERSHIPS (HOME) PROGRAM

ACTION NEEDED: Urge your House and Senate members to restore funding for the U.S. Department of Housing and Urban Development’s HOME Investment Partnerships Program (HOME) to $1.6 billion for FY2013 and FY2014. The HOME program, funded through the Transportation, Housing and Urban Development (T-HUD) appropriations bill, has been cut by over forty percent since FY2010 and was funded at $1 billion in FY2012. Further funding cuts would be detrimental to local affordable housing opportunities. BACKROUND: The HOME program was authorized in 1990, and assists state and local governments to provide affordable housing for low-income families, helping to improve the quality of life in local communities. Sixty percent of HOME funds are allocated to 643 participating jurisdictions in counties and cities and forty percent to states. HOME funds can be used towards the acquisition, reconstruction and rehabilitation of housing. Counties can also use HOME funds for tenant-based rental assistance, and have flexibility to design policies and programs that address local affordable housing needs. Currently, HOME is funded at $1 billion, the FY2012 level, under a Continuing Resolution (CR) until March 27, 2013.The House T-HUD Appropriations Committee proposed funding HOME at $1.2 billion for FY2013. The Senate T-HUD Appropriations Committee proposed funding HOME at $1 billion for FY2013. KEY ISSUES: • HOME funding helps local governments provide affordable housing to low

income families, to provide decent housing and enhance the quality of life of local communities.

• Funding for HOME should be restored to $1.6 billion for FY2013 and FY2014. HOME funding has been reduced by over 40 percent($825 million) since FY2010.

• Since 1990, over one million units of housing have been produced with HOME funds. The program's flexibility allows states and local governments to use HOME funds for grants, direct loans, loan guarantees or other forms of credit enhancement, or rental assistance.

• Through HOME, states and participating local jurisdictions can also create partnerships with the private sector that promote affordable housing and leverage private sector financing.

• According to HUD, every $1.00 of HOME funding leverages $4.00 of other public and private funds. Every $1 billion in HOME funding creates or preserves approximately 17,870 jobs.

QUICK FACTS



For further information, contact: Daria Daniel at 202.942.4212 [email protected]

U.S. House Appropriations Committee U.S. Senate Appropriations Committee Majority: Harold Rogers (R-KY), Chairman Mario Diaz-Balart (R-FL) C.W. Bill Young (R-FL) Charles Dent (R-PA)* Frank R. Wolf (R-Va.)* Tom Graves (R-GA) Jack Kingston (R-GA) Kevin Yoder (R-KS) Rodney Frelinghuysen (R-NJ) Steve Womack (R-AR) Tom Latham (R-IA)* Alan Nunnelee (R-MS) Robert B. Aderholt (R-AL) Jeff Fortenberry (R-NE) Kay Granger (R-TX)* Tom Rooney (R-FL) Michael Simpson (R-ID) Chuck Fleishmann(R-TN) John Abney Culberson, (R-TX) Jaime H. Beutler (R-WA)* Ander Crenshaw, (R-FL) David Joyce (R-OH)* John R. Carter (R-TX) David Valadao (R-CA) Rodney Alexander (R-LA) Andy Harris (R-MD) Ken Calvert (R-CA) Jo Bonner (R-AL) Tom Cole (R-OK)* Minority: Nita Lowey (D-NY), Ranking Member Marcy Kaptur (D-OH) Barbara Lee (D-CA) Pete Visclosky (D-IN) Adam Schiff (D-CA) José Serrano (D-NY) Michael Honda (D-CA) Rosa DeLauro (D-CT) Betty McCollum (D-MN) James Moran (D-VA) Tim Ryan (D-OH)* Ed Pastor (D-AZ)* Debbie Wasserman- David Price (D-NC)* Schultz (D-FL) Lucille Roybal-Allard (D-CA) Henry Cueller (D-TX) Sam Farr (D-CA) Chellie Pingree (D-ME) Chaka Fattah (D-PA) Mike Quigley (D-IL)* Sanford Bishop (D-GA) Bill Owens (D-NY) * Member of the U.S. House Appropriations Subcommittee on Transportation, Housing and Urban Development

Majority: Barbara Mikulski (D-MD), Chairwoman* Patrick Leahy (D-VT) * Tom Harkin (D-IA)* Patty Murray (D-WA)* Dianne Feinstein (D-CA) * Richard Durbin (D-IL)* Tim Johnson (D-SD)* Mary Landrieu (D-LA) Jack Reed (D-RI)* Frank Lautenberg (D-NJ)* Mark Pryor (D-AR)* Jon Tester (D-MT) Tom Udall (D-NM) Jeanne Shaheen (D-NH) Jeff Merkley (D-OR) Mark Begich (D-AK) Minority: Richard Shelby (R-AL), Vice Chairman* Thad Cochran (R-MS) Mitch McConnell (R-KY) Lamar Alexander (R-TN)* Susan Collins (R-ME)* Lisa Murkowski (R-AK) Lindsey Graham (R-SC) * Mark Kirk (R-IL)* Dan Coats (R-IN)* Roy Blunt (R-MO)* Jerry Moran (R-KS)* John Hoeven (R-ND) Mike Johanns (R-NE) John Boozman (R-AR)* * Member of the U.S. Senate Appropriations Subcommittee on Transportation, Housing and Urban Development


NATIONAL ASSOCIATION OF COUNTIES | 25 MASSACHUSETTS AVENUE, NW SUITE 500 | WASHINGTON, DC 20001 | 202.393.6226 | FAX 202.393.2630 | WWW.NACO.ORG


• Property Assessed Clean

Energy (PACE) programs allow local governments to loan money to homeowners for renewable energy and/or energy efficiency retrofits through a tax assessment on the resident’s property

• PACE is an important tool used by local governments to reduce energy use, protect the environment and provide local jobs

• Residential PACE programs

are on hold, pending court decisions and federal regulations, over whether local governments should be able to hold senior liens over Freddie Mac and Fannie Mae mortgages

QUICK FACTS

PROPERTY ASSESSED CLEAN ENERGY

PROGRAM (PACE) UPDATE

STATUS OF PACE PROGRAM: The residential PACE program is tied up in the Federal court system over

challenges to a 2010 directive by the Federal Housing Finance Agency (FHFA) regarding the impact of

PACE programs on Freddie Mac and Fannie Mae loans. A regulation on PACE is pending at FHFA, hinging

on final court decisions. The timing for reintroduction of a PACE-type bill on Capitol Hill is uncertain.

NACo POLICY: NACo supports funding for Property Assessed

Clean Energy (PACE) programs and supports their treatment by

Federal regulators as a traditional tax assessment program with

first lien status.

BACKGROUND: Property Assessed Clean Energy (PACE)

programs were first envisioned and implemented by local

governments in 2005. In areas that allowed PACE enabling

language, local governments offered specific bonds to investors.

In turn, property owners borrowed money from the local

government for renewable energy and/or energy efficiency

retrofits through a tax assessment. The loans are repaid via an

annual assessment on the resident’s property tax bill, usually

through a repayment period of 15-20 years. A PACE loan stays

with the property, regardless of ownership.

PACE is created through municipal bonds. Special tax assessment

districts, also known as land-secured financing districts, are

commonly used by local governments to issue bonds for a public

purpose to fund such projects as drinking and/or sewers systems,

police or fire protection, underground utility lines and streetlights.


Residential PACE was not designed to increase the risk of homeowners, business owners, lenders or the

financial system, and was created with stringent operating rules, to ensure a net positive benefit to all

parties. When fully implemented, PACE can achieve significant energy savings, benefit the environment

and generate local jobs. A number of counties and cities across the country had begun to establish

residential PACE programs.

However, in 2010, residential PACE ground to a halt. On July 6, 2010, the Federal Housing Finance

Agency (FHFA), an independent federal agency that oversees the viability of Fannie Mae and Freddie

Mac home loans, proclaimed that the PACE program was not a “traditional tax assessment.” FHFA took a

series of steps that prevented PACE assessments from being considered senior to mortgage obligations,

as other municipal assessments are treated. This severely limited or eliminated most of the residential

PACE programs run by local governments.

Following the 2010 decision, environmental groups, local and state governments challenged the

decision in multiple district courts, stating the 2010 FHFA statement failed to comply with

Administrative Procedures Act (APA) procedures. The United States Northern District of California Court

agreed and ruled against the agency. FHFA, as a result, issued a proposed rule in June 2012 that

essentially reaffirmed its position on prohibiting Fannie Mae and Freddie Mac from purchasing any

mortgages subject to a first-lien PACE obligation.

While the Northern California decision still stands, it is narrowly focused, dealing strictly with

requirements as laid out under APA. It does not require the agency to reverse its position on PACE. The

Congressional outlook for residential PACE faces an uphill battle. Congressional champions of PACE

legislation in the 112th Congress lost their 2012 elections and the political makeup of the House and

Senate differ significantly. There is little political will in the House to move residential PACE legislation.

Even though residential PACE has hit a setback, commercial PACE, which focuses on commercial

property, is gaining momentum.

For further information, contact: Julie Ufner 202.942.4269 or [email protected]



• The “waters of the U.S.” proposal increases the number of county owned and maintained ditches (roadside, flood control and stormwater) falling under federal Clean Water Act Section 404 permit jurisdiction

• Counties would remain responsible for locally owned ditches but the federal oversight for related maintenance and new infrastructure would increase

• Many counties experience multi-year delays waiting for approval of Section 404 permits

• Additionally, completion costs for projects with Section 404 permits may skyrocket due to hiring consultants, lawyers, engineers and negotiating special conditions attached to the permit

STOP “WATERS OF THE U.S.” GUIDANCE

ACTION NEEDED: Urge the Obama Administration to withdraw the “Waters of the U.S.” guidance proposal (RIN 2040-AF30) and instead move forward with an open and transparent rule-making process as set forth by the Administrative Procedures Act. Also, urge your members of Congress to support proposals that stop the “waters of the U.S.” guidance from moving forward. The guidance includes man-made ditches in the definition of “Waters of the U.S.” and creates unnecessary and costly regulations that would impede development and maintenance of infrastructure, including by the nation’s counties. BACKGROUND: In 2011, the U.S. Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (Corps) sent the White House’s Office of Management and Budget the final guidance document on “Waters of the U.S.” that included definitional changes in the Clean Water Act (CWA). This proposal would expand federal jurisdiction over county-owned and maintained ditches such as roadside, flood control and storm water ditches. The guidance is still pending final release. The guidance stems from the 2001 Supreme Court decision on Solid Waste Agency of Northern Cook County (SWANCC) vs. the U.S. Army Corps of Engineers. The court struck down the Corps’ use of the Migratory Bird Rule in determining federal jurisdiction. The Migratory Bird Rule basically stated that wherever a bird might land, that land was considered a “water of the U.S.” Since the SWANCC decision, confusion has existed in the field over what waters (and their tributaries) are considered to be under federal jurisdiction. According to the EPA and the Corps, the draft guidance was intended to clarify jurisdictional waters. However, the proposal is significantly broader in scope and more burdensome than previous guidance documents on wetlands. Previous guidance documents referred only to the CWA Section 404 on dredge and fill programs, overseen by the Corps. According to the proposal, there is only one definition of “waters of the U.S.” within the CWA and must be applied consistently for all CWA programs that use the term “waters of the U.S.”

QUICK FACTS


Broadening the “waters of the U.S.” definition would adversely impact local governments, businesses and property owners. Not only does the guidance impact county-owned and maintained ditches, it also affects every existing CWA program, because there is only one “waters of the U.S.” definition in the Clean Water Act. The proposed changes would impact the National Pollutant Discharge Elimination System (NPDES) Section 402 program, total maximum daily load (TMDL) and other water quality standards programs, state water quality certification process, or Spill Prevention, Control and Countermeasure (SPCC) programs. Changes at the federal level increase implementation and oversight costs at the local level. NACo is concerned the direct and indirect costs of these changes on local governments have not been fully studied or recognized. It is in the arena of ditches that NACo members will be most immediately impacted. In the past several years, the Corps has required some local governments to have federal 404 CWA permits before moving forward with general maintenance activities such as clearing out ditches or cutting down the vegetation in ditches. While in theory ditch- maintenance activities are exempted under the Section 404 permit program, in reality, the exception is narrowly crafted. Meanwhile, regardless of whether Sec. 404 or 402 reigns, counties face significant challenges securing federal permits in a timely manner. They can take years to approve and often have ‘special conditions’ (i.e. mitigation requirements attached to them that are expensive). They cause costs to mount and can threaten public safety when special conditions are attached to a permit. One telling example: Because some counties may only clear vegetation and debris from their flood control ditches six months out of a year, nearby homes have flooded. While the draft guidance states that it is a non-binding document, the practical effect of the document on all stakeholders will be more like a rule. Given counties’ past experiences with federal guidance documents, counties have reason to believe that EPA and Corps regional offices will inappropriately rely on this Draft Guidance to claim federal jurisdiction over water bodies that are currently not under federal jurisdiction. KEY TALKING POINTS:

• Regulating manmade ditches as “waters of the U.S.” is especially problematic for counties. Counties

are responsible for a number of manmade ditches, such as culverts, storm channels and roadside ditches. Currently, counties face tremendous challenges in receiving federal permits approved in a timely manner.

• If more waters fall under federal jurisdiction, counties will be forced to submit more Section 404 permits and will face longer delays in the jurisdictional determination and permitting process.

• The permit itself is not a problem, but the process used can be challenging for local governments. 404 permits can be time-consuming and expensive to obtain. Many counties experience delays in the years – three to five – with significant overhead costs associated with consultants, lawyers, engineers and special conditions attached to the permit, etc.

For further information, contact: Julie Ufner at 202.942.4269 or [email protected]



• Tax-exempt bonds have been a feature of the federal tax code since 1913 and are a critical financing tool for counties nationwide

• State and local governments issued more than $340.7 billion in tax-exempt bonds in 2009

• 45 percent of long-term state

and local tax-exempt bonds funded the building of schools, hospitals, roads and jails

• 75 percent of all national

infrastructure projects are completed using bond financing

OPPOSE EFFORTS TO ELIMINATE OR LIMIT THE TAX-EXEMPT STATUS OF MUNICIPAL BONDS

ACTION NEEDED: Urge your Members of Congress to oppose any legislative initiatives that would eliminate or limit the tax-exempt status of municipal bonds.

BACKGROUND: Tax-exempt bonds were written in the first tax code in 1913 and are a well-established financing tool. They are predominantly issued by state and local governments for governmental infrastructure and capital needs purposes. The debt issued for capital projects help governments pay for public projects, such as the construction or improvement of schools, streets, highways, hospitals, bridges, water and sewer systems, ports, airports and other public works.

Deficit reduction efforts have already resulted in cuts in aid to local governments from the states and reduced funding in federal programs that benefit counties. Now, counties face the additional risk of not having a low-cost, market-driven means of financing to support local needs.

Eliminating the tax-exempt status of municipal bonds was first entertained by President Obama’s National Commission on Fiscal Responsibility and Reform. The proposal continues to see life in other forms in deficit reduction talks. The proposal and derivatives of it, which include a cap on the benefit of the exemption that would have the effect of imposing a partial income tax on otherwise tax-exempt interest earned by certain investors.

Over the past half century, state and local governments have increasingly borne the cost of infrastructure and public improvements. According to the Congressional Budget Office, about 75 percent of public funding for transportation and water infrastructure alone is supplied by state and local governments. The federal savings from the proposed changes will not offset the economic strain that will burden state and local governments (and their local taxpayers) because those investments will become more expensive. According to the Securities Industry and Financial Markets Association, if the proposals to cap or eliminate the benefit were in place from 2003-2012, the increased interest costs would fall between $175 million to $501 billion for state and local governments

Tax-exempt bonds are a critical tool for counties that facilitates the budgeting and financing of long-range investments in the infrastructure and facilities necessary to meet public demand for government services. Without the tax-exemption, counties would pay more to raise capital, a cost that would ultimately be borne by the taxpayers, through means such as reduced spending on the roads and bridges that counties are responsible for, decreased economic development, higher taxes or higher user fees.

QUICK FACTS


TALKING POINTS: • A fundamental feature of the first federal tax code written in 1913, tax-exempt financing is used by state and

local governments to raise capital to finance public capital improvements and other projects, including infrastructure facilities that are vitally important to sustained economic growth.

• State and local governments issued more than $340.7 billion in tax-exempt bonds in 2009.

• 45 percent of long-term state and local tax-exempt bonds funded the building of schools, hospitals, roads and jails.

• Because the interest received by holders of municipal bonds is exempt from federal income taxes, investors are willing to accept a lower interest rate on tax-exempt issues, which reflects their reduced tax burden. This lower rate significantly reduces borrowing costs for state and local governments (and the local taxpayers).

• The tax-exemption represents a fair allocation of the cost of projects between federal and state/local levels of government. An allocation that leverages an almost 9 to 1 return is difficult to replicate through other federal programs.

• Tax-exempt bonds are vital for transportation, justice and health needs because counties own and operate 44 percent of public roads and highways, own almost a third of the nation’s transit systems and airports, own 964 hospitals and manage 1,947 health departments, and approximately 86 percent own and operate a jail.

• Without the tax-exemption, the effectiveness of the bond market would be significantly dampened, creating higher borrowing costs for county governments, less investment in infrastructure and fewer jobs.


For further information, contact: Michael Belarmino at 202.942.4254 or [email protected]

U.S. House Committee on Ways and Means U.S. Senate Finance Committee Majority: Dave Camp (R-MI), Chairman Sam Johnson (R-TX) Kevin Brady (R-TX) Paul Ryan (R-WI) Devin Nunes (R-CA) Pat Tiberi (R-OH) Dave G. Reichert (R-WA) Charles W. Boustany Jr. (R-LA) Peter J. Roskam (R-IL) Jim Gerlach (R-PA) Tom Price (R-GA) Vern Buchanan (R-FL)

Adrian Smith (R-NE) Aaron Schock (R-IL) Lynn Jenkins (R-KS) Erik Paulsen (R-MN) Kenny Marchant (R-TX) Diane Black (R-TN) Tom Reed (R-NY) Todd Young (R-IN) Mike Kelly (R-PA) Tim Griffin (R-AR) Jim Renacci (R-OH)

Majority: Max Baucus (D-MT), Chairman John D. Rockefeller IV (D-WV) Ron Wyden (D-OR) Charles E. Schumer (D-NY) Debbie Stabenow (D-MI) Maria Cantwell (D-WA) Bill Nelson (D-FL) Robert Menendez (D-NJ) Thomas R. Carper (D-DE) Benjamin L. Cardin (D-MD) Sherrod Brown (D-OH) Michael Bennett (D-CO) Robert P. Casey (D-PA)

Minority: Sander Levin (D-MI), Ranking Member Charles B. Rangel (D-NY) Jim McDermott (D-WA) John Lewis (D-GA) Richard E. Neal (D-MA) Xavier Becerra (D-CA) Lloyd Doggett (D-TX) Mike Thompson (D-CA)

John B. Larson (D-CT) Earl Blumenauer (D-OR) Ron Kind (D-WI) Bill Pascrell Jr. (D-NJ) Joseph Crowley (D-NY) Allyson Schwartz (D-PA) Danny Davis (D-IL) Linda Sanchez (D-CA)

Minority: Orrin G. Hatch (R-UT), Ranking Member Chuck Grassley (R-IA) Mike Crapo (R-ID) Pat Roberts (R-KS) Michael B. Enzi (R-WY) John Cornyn (R-TX) John Thune (R-SD) Richard Burr (R-NC) Johnny Isakson (R-GA) Rob Portman (R-OH) Patrick J. Toomey (R-PA)



SUPPORT LOCAL RESOURCES BY ALLOWING THE COLLECTION OF

EXISTING SALES TAXES ON OUT-OF-STATE CATALOG AND ONLINE SALES ACTION NEEDED: Contact your House and Senate members and urge them to support legislative initiatives that would allow counties to enforce their existing sales tax laws regardless of whether a purchase is made in a store, online or through a catalog retailer.

BACKGROUND: The 1967 Supreme Court case National Bellas Hess v. Illinois Department of Revenue set the stage for the current debate on taxing Internet sales when the Court ruled it would be too much of a burden on out-of-state retailers to collect sales taxes in all the jurisdictions they conducted businesses. In 1992, the issue resurfaced in Quill v. North Dakota when the Court reaffirmed Bellas Hess, but elaborated that Congress may be better qualified and ultimately has the power to resolve the question of taxation on interstate commerce.

Since those earlier decisions, the Internet’s use and utility has developed tremendously. Consequently, online sales also grew exponentially in the last fifteen years and are projected to continue to grow. Since state and local governments are still unable to enforce their existing sales tax laws on many of those purchases, billions of local tax dollars are lost each year. A University of Tennessee study estimated the loss for state and local governments in 2012 alone to be approximately $23 billion.

For counties, that increasing level of lost revenue means less money for basic services, such as roads and law enforcement officers. With local economies just now showing signs of improvement, additional revenue will bolster any recovery efforts and capturing these revenues is crucial to counties, especially for mandated yet underfunded services.

For the first time on this issue, a bipartisan, bicameral bill has been introduced. S. 336 and H.R. 684 seek to grant state and local governments the authority to collect taxes on remote sales, which generally are sales that are conducted through any other means other than in a physical store. The Marketplace Fairness Act of 2013 is being led again in the Senate by Sen. Michael Enzi (R-Wyo.), Sen. Richard Durbin (D-Ill.), and Sen. Lamar Alexander (R-Tenn.). Efforts in the House are being led again by Rep. Steve Womack (R-Ark.) and Rep. Jackie Speier (D-Calif.). The new legislation creates two systems to facilitate multistate sales tax collection: the Streamlined Sales and Use Tax Agreement and an alternative where states may collect after adopting minimum simplification requirements for their sales tax laws and administration.

The Streamlined Sales and Use Tax Agreement, supported by NACo and other state and local government organizations, is a multistate compact that seeks to reduce the complexity of state and local sales and use tax laws and would permit the collection of sales and use taxes from remote sellers. Although there are currently only 24 states that are official members of the Agreement, it is the result of a cooperative effort beginning in 1999 of 44 states, the District of Columbia, local governments and the business community to simplify sales and use tax collection and administration by retailers and states.

The Agreement minimizes costs and administrative burdens on retailers that collect sales tax, particularly retailers operating in multiple states. It encourages remote sellers using the Internet and mail order to collect tax on sales to customers living in the 24 member states. It levels the playing field so that local stores and remote sellers operate under the same rules. This Agreement ensures that all retailers can conduct their business in a fair, competitive environment.


Governments and businesses have been at the table for over a decade working collaboratively on this issue and have produced a solution to alleviate the burden on business to keep track of the numerous tax jurisdictions. Within the work of the Streamline Agreement, the states partnered with private sector suppliers to develop and certify software that simplifies collection. Currently, six companies have been certified to provide the necessary software with more expected in the future. Member states also help pay for the software for some retailers.

KEY ISSUES:

• Support legislative initiatives that would allow states and local governments to enforce existing laws and stop the loss of billions of dollars in uncollected tax revenue on sales in e-commerce every year, estimated at over $23 billion in 2012 alone. This lost revenue will continue growing as e-commerce sales continue to experience significant growth. For example, total online sales for Black Friday 2012 reached over $1 billion, a 26 percent increase over the same day in 2011.

• Previous arguments that requiring remote sellers to collect sales tax creates too much of a burden on business are not as strong today. The retail world is much different today than when the U.S. Supreme Court made its rulings in 1967 and again in 1992. Certified providers with the necessary software to keep track of the various state and local tax rates already exist. Keeping track of the tax rates is no more complicated than calculating real-time-shipping, a feature that already exists on most web sites and online sales marketplaces.

• Passing federal legislation would not add to the federal deficit and does not create a new tax.

• Federal legislation would also level the playing field for local retailers who are at a competitive disadvantage to online retailers who do not have to collect taxes. A growing list of businesses, including Best Buy and Amazon, have expressed support for the efforts to pass legislation.


U.S. House Committee on the Judiciary U.S. Senate Finance Committee Majority: Bob Goodlatte (R-VA), Chairman F. James Sensenbrenner Jr. (R-WI) Howard Coble (R-NC) Lamar Smith (R-TX) Steve Chabot (R-OH) Spencer Bachus (R-AL) Darrell Issa (R-CA) J. Randy Forbes (R-VA) Steve King (R-IA) Trent Franks (R-AZ) Louie Gohmert (R-TX) Jim Jordan (R-OH)

Ted Poe (R-TX) Jason Chaffetz (R-UT) Tom Marino (R-PA) Trey Gowdy (R-SC) Mark Amodei (R-NV) Raúl Labrador (R-ID) Blake Farenthold (R-TX) George Holding (R-NC) Doug Collins (R-GA) Ron DeSantis (R-FL) Keith Rothfus (R-PA)

Majority: Max Baucus (D-MT), Chairman John D. Rockefeller IV (D-WV) Ron Wyden (D-OR) Charles E. Schumer (D-NY) Debbie Stabenow (D-MI) Maria Cantwell (D-WA) Bill Nelson (D-FL) Robert Menendez (D-NJ) Thomas R. Carper (D-DE) Benjamin L. Cardin (D-MD) Sherrod Brown (D-OH) Michael Bennet (D-CO) Robert Casey Jr. (D-PA)

Minority: John Conyers Jr. (D-MI), Ranking Member Jerrold Nadler (D-NY) Robert C. Scott (D-VA) Melvin Watt (D-NC) Zoe Lofgren (D-CA) Sheila Jackson Lee (D-TX) Steve Cohen (D-TN) Hank Johnson (D-GA) Pedro R. Pierluisi (PR) Judy Chu (D-CA)

Ted Deutch (D-FL) Luis V. Gutierrez (D-IL) Karen Bass (D-CA) Cedric Richmond (D-LA) Suzan DelBene (D-WA) Joe Garcia (D-FL) Hakeem Jeffries (D-NY)

Minority: Orrin G. Hatch (R-UT), Ranking Member Chuck Grassley (R-IA) Mike Crapo (R-ID) Pat Roberts (R-KS) Michael B. Enzi (R-WY) John Cornyn (R-TX) John Thune (R-SD) Richard Burr (R-NC) Johnny Isakson (R-GA) Rob Portman (R-OH) Patrick Toomey (R-PA)

For further information, contact: Michael Belarmino at202.942-4254 or [email protected]

FACTS: State and Local Bankruptcy Unintended Consequences. The mere suggestion that Congress should enact preemptive authority for states to file for bankruptcy is pernicious because of its predictable consequences. Any federal law allowing states to declare bank-ruptcy would only serve to increase interest rates, rattle investors and markets, raise the costs for state government, create more volatility and uncertainty in financial markets, and erode state sovereignty under the 10th Amendment to the U.S. Constitution.

States Versus Municipalities. The bankruptcy conversation further demonstrates a basic misunderstanding about the function and operation of state and local governments.

The mechanics of bankruptcy are inapplicable to a sovereign entity. Bank-ruptcy is not a legal option for states, as constitutionally recognized sover-eigns, because states have taxing authority and constitutional or statutory requirements to balance budgets. Alternatively, bankruptcy may be an option for some municipalities under Title IX of the federal Bankruptcy Code because municipalities are legal corporations, not sovereign entities. Eligibility for Chapter IX relief is narrowly tailored by several factors. States determine whether their municipalities, as “political subdivisions, public agencies, or instrumentalities of the state,” may pursue this option. One key eligibility fac-tor is that a municipality must be insolvent and unable to meet its obligations when they fall due.

According to Moody’s Investor Service, 21 states and the District of Columbia have not passed laws on municipal bankruptcy while 28 states either authorize or provide conditional or limited Chapter IX filings. Cur-rently, only Georgia and Puerto Rico legally prohibit municipalities from filing under Chapter IX.

Issued By:

NGA – National Governors AssociationNCSL – National Conference of State LegislaturesCSG – The Council of State GovernmentsNACo – National Association of CountiesNLC – National League of CitiesUSCM – The U.S. Conference of MayorsICMA – International City/County Management Association NASBO – National Association of State Budget OfficersNASACT – National Association of State Auditors, Comptrollers and TreasurersGFOA – Government Finance Officers AssociationNASRA – National Association of State Retirement Administrators

Facts You Should KnowState and Municipal Bankruptcy n Municipal Bonds n State and Local Pensions

2 0 1 3 F A C T S H E E T

State Actions. Long term fiscal constraints have put budgetary pressures on most states, which are required to balance their budgets annually or biennially. States have risen to this challenge by making tough spend-ing cuts and, in some cases, raising taxes, which is within their power as sovereign entities. During this time, unfunded pension and health care liabilities have also grown, due chiefly to the lower rate of return on investments and deferred annual contributions. Between 2009 and 2011, 43 states have reduced their pension plan costs, unfunded liabilities, or both, by modifying their pension plans.

Throughout this difficult period, no state contem-plated walking away from its obligations to residents or the bond markets by requesting that the federal government allow states to receive bankruptcy protection.

In 2011, NGA leadership issued a preemptive state-ment and a joint leadership letter with the NCSL that declared opposition to any congressional legislation that would permit states to file for bankruptcy protec-tion. Opposition to such legislation remains in 2013.

FACTS: Municipal BondsMunicipal securities are predominantly issued by state and local governments for governmental infrastructure and capital needs purposes. Most debt is issued not for operating budgets, but rather for capital projects that help governments pay for public projects, such as the construction or improvement of schools, streets, highways, hospitals, bridges, water and sewer systems, ports, airports and other public works.

Municipal Securities

n There are approximately 1.5 million municipal bonds outstanding, totaling $3.7 trillion, 70 percent of which are owned by individual investors.

n On average, 12,000 issuances are completed each year.

n Municipal securities are considered to be second only to Treasuries in risk level as an investment instrument.

n While most municipal securities are issued for governmental infrastructure and capital needs purposes, state and local governments and other types of government authorities may issue bonds for other purposes, which include transactions in which the proceeds are borrowed by non-profit institutions (e.g., health care and higher education) and for economic development purposes.

Federal Tax-Exemption of Municipal Securities

n Municipal securities existed prior to the formation of the federal income tax. Both when first enacted and today, the federal income tax specifically states that income from municipal bond interest is exempt from federal taxation. Additionally, many states exempt from taxation the interest earned from municipal securities when their residents purchase bonds within their state.

n Due to the reciprocal immunity principle between the federal government and state and local gov-ernments, state and local governments are prohib-ited from taxing the interest on bonds issued by the federal government.

Not All Municipal Debt and Defaults Are the Same

n Municipal debt takes two forms: (1) General Obligation, or GO Debt, that is backed by the full faith and credit (taxing power) of a general purpose government like a state, city or county, and (2) Non-GO debt that is issued by governments and special entities that is usually backed by a specific revenue source (special taxes, fees or loan repay-ments) associated with the enterprise or borrower.

n There are two types of default: (1) the more minor “technical default,” where a covenant in the bond agreement is violated, but there is no payment missed and the structure of the bond is the same, and (2) defaults where a bond payment is missed or in the rare event that debt is restructured at a loss to investors.

Defaults Are Rare

n From 1970 through 2012, there were 71 rated municipal bond defaults. Only five rated city or county governments defaulted during this period. The majority of rated defaulted bonds were issued by not-for-profit hospitals or housing project financings. (Moody’s)

n In the first nine months of 2011, municipal bond defaults were down 69 percent compared to the same period in 2010 (S&P).

n Historically, municipals have had lower average cumulative default rates than global corporates over-all and by like rating category. Between 1970 and 2012, the average 10-year default rate for Moody’s Aaa-rated municipal bonds was zero compared to a 0.48 percent default rate for Moody’s Aaa-rated

corporate bonds. Additionally, the average one-year default rate for all municipals was just 0.01 percent versus 1.61 percent for corporates, and in the double-A rating category to which the majority of municipal ratings are assigned, average cumulative default rates are much lower for municipals than for corporates with the same double-A symbol (Moody’s1).

n Except for Arkansas in 1933, no state has defaulted on its debt in the past century. It is important to note that in the 1933 Arkansas default, bondhold-ers were paid in full.

n The recovery rate of payment for governmental debt exceeds the corporate recovery rate, with a recovery rate for general obligation and tax-backed debt at 100 percent.

n Reports of a growing number of defaults in the state and local government sector are not based on facts, nor current budget estimates and economic data.

Debt Service is a Small and Well-Protected Share of State and Municipal Budgets

n Debt service is typically only about 5 percent of the general fund budgets of state and municipal governments.

n Most state and municipal governments operate under a standard practice of paying their debt service first before covering all other expenses; in some cases this is required by law or ordinance.

Bankruptcy Does Not Necessarily Mean Default

n In many municipal bankruptcies, the jurisdic-tions have not defaulted on their debt/municipal bonds and investors have been paid, includ-ing the well-publicized bankruptcy of Orange County, CA in 1994.

FACTS: State and Local Government PensionsPension dollars help the economy of every jurisdiction. Public employees live in every city and county in the nation. More than 90 percent retire in the same juris-diction where they worked. The $200 billion in annual benefits distributed from pension trusts are a critical source of economic stimulus to communities through-out the nation, and act as an economic stabilizer in difficult financial times. Recent studies have docu-

mented public retirement system pension distributions annually generate over $73.4 billion in federal tax rev-enue, more than $59.7 billion in annual state and local government tax revenue, and a total economic impact of more than $1 trillion.2

n With nearly $3 trillion set aside in pension trusts for current and future retirees, most states and cities have substantial assets to weather the economic crisis

• Public pensions are paid out over decades; state and local government retirees do not draw down their pensions all at once.

• State and local employee retirement systems do not seek federal financial assistance. One-size-fits-all federal regulation is neither needed nor warranted and would only inhibit recovery efforts at the state and local levels.

n State and local governments are taking steps to strengthen their pension reserves and have a long-term time horizon.

• Between 2009 and 2011, 43 states have made changes to benefit levels, contribution rate structures, or both; many local governments have made similar fixes to their plans.3

• While pension obligations are often backed by explicit state constitutional or statutory guar-antees, states are generally free to change any provision of their retiree health plans, includ-ing termination, as they do not carry the same legal protections. It is misleading to combine unfunded pension liabilities with unfunded retiree health benefits as an argument that a pension meltdown is impending.

n Long-term investment returns of public funds continue to exceed expectations.

• Over the last 25 years, which saw three eco-nomic recessions and four years of negative median public fund investment returns, actual public pension investment returns averaged 8.8 percent, which exceeded projections.4

• These actual returns exceed the 7.8 percent average public pension investment return assumption, as well as the average assumed rate of return used by the largest corporate pension plans.5

n Retirement systems remain a small portion of state and local government budgets.

• The portion of combined state and local govern-ment spending dedicated to retirement system

contributions is about four percent.6,7 Pensions are a trust to which public retirees and their employers contributed while they were working.

• While there are pension trusts that are fully funded with enough assets for current pension obligations, there also are legitimate concerns about the extent of underfunding, due primar-ily to the Great Recession and stock market declines. In most cases, a modest increase in contributions to take advantage of com-pounded interest, modifications to employee eligibility and benefits, or both, will be suffi-cient to remedy the underfunding problem.8

• The unprecedented number of benefit and financ-ing changes in public plans over the last few years will help to minimize any required increases. The vast majority of public employees are required to contribute a portion of their wages—typically, five to ten percent—to their state or local

pension, and these contribution rates are being raised by many state and local governments.

Endnotes1 Moody’s Investors Service, 2013.

2 Pensionomics: Measuring the Economic Impact of Defined Benefit Expenditures, National Institute on Retirement Security, March 2012.

3 State Pension Reform, 2009–2011, National Conference of State Legislatures, March 2012.

4 Median Returns for Periods Ended 09/30/2012, Callan Associates.

5 Milliman 2010 Pension Funding Study.

6 NASRA Issue Brief: Pension Plan Investment Return Assumption, August 2012.

7 The Impact of Public Pensions on State and Local Budgets, Center for Retirement Research at Boston College, Alicia H. Munnell, Jean-Pierre Aubry, and Laura Quinby, October 2010.

8 State and Local Pensions: An Overview of Funding Issues and Challenges, Center for State and Local Government Excellence, January 2013.

For More InformationNational Governors Association David Quam n (202) 624-5300, [email protected] Parkhurst n (202) 624-5300, [email protected]

National Conference of State Legislatures Bankruptcy: Susan Parnas Frederick n (202) 624-3566, [email protected] and Defaults: Michael Bird n (202) 624-8686, [email protected]

The Council of State GovernmentsChris Whatley n (202) 624-5460, [email protected]

National Association of CountiesMichael Belarmino n (202) 942-4254, [email protected]: Deseree Gardner n (202)942-4204, [email protected]

National League of CitiesBankruptcy and Bonds: Lars Etzkorn n (202) 626-3173, [email protected]: Neil Bomberg n (202) 626-3042, [email protected]

The U.S. Conference of Mayors Larry Jones n (202) 202-861-6709, [email protected]

International City/County Management AssociationElizabeth Kellar n (202) 962-3611, [email protected]

National Association of State Budget OfficersScott Pattison n (202) 624-8804, [email protected]

National Association of State Auditors, Comptrollers and TreasurersCornelia Chebinou n (202) 624-5451, [email protected]

Government Finance Officers AssociationDustin McDonald n (202) 393-8020, [email protected]

National Association of State Retirement AdministratorsJeannine Markoe Raymond n (202) 624-1417, [email protected]



PROTECT THE PREVENTION AND PUBLIC HEALTH FUND

ACTION NEEDED: Urge your Senators and Representatives, especially those serving on the U.S. House Energy and Commerce Committee and U.S. Senate Health, Education, Labor and Pensions (HELP) Committee, to defend the Prevention and Public Health Fund (PPHF) against repeal efforts. Urge members of the House and Senate Appropriations Committees to allocate PPHF resources so as to supplement and enhance health promotion and disease and injury prevention efforts at the county level. The PPHF should not be raided to backfill cuts to core operations and programs of the Centers for Disease Control and Prevention (CDC) and other U.S. Department of Health and Human Services agencies. BACKGROUND: The PPHF is a mandatory, dedicated investment of $12.5 billion over the next 10 years in programs that prevent disease at the community level. Congress designed the PPHF to support the core public health functions of state, county, city and tribal health departments. Core functions include providing immunizations, protecting the food and water supply, conducting surveillance to detect and monitor emerging infectious diseases, preventing disease, and preparing for and responding to disasters, acts of bioterrorism and other health emergencies. The PPHF is also intended to invest in evidence-based interventions to lower disease rates, improve quality of life, and ultimately help reduce health care costs for millions of Americans at the local level. Poor public health contributes to the high cost of health care and to projected federal deficits, since 75 percent of all health care costs are spent on the treatment of chronic diseases, many of which could have been prevented. Obesity alone is estimated to cost the U.S. $147 billion per year, while chronic diseases cost an additional $1 trillion each year in lost productivity. Injuries are the leading cause of death for Americans ages one through 44 and are estimated to cost more than $117 billion per year.

The nation’s 1,947 county-based public health departments:

• Respond to and track

outbreaks of infectious diseases like influenza and foodborne illnesses

• Test for and treat infectious diseases like HIV and tuberculosis

• Conduct programs to keep kids from starting to smoke and help adults quit

• Inspect restaurants and make sure restaurant staff follow safe food-handling practices

• Prepare communities for disease outbreaks, natural disasters, and acts of terrorism, respond if emergencies occur, and lend support throughout the recovery process

• Ensure healthy babies by supporting first-time parents with in-home education programs and breastfeeding promotion

• Mobilize community partners to develop safe places for kids to play outside

QUICK FACTS


KEY TALKING POINTS: • The PPHF is effective at bolstering state and local chronic disease prevention initiatives and should be

fully funded. The PPHF invested $226 million in FY2012 for Community Transformation Grants (CTGs). CTGs support locally-driven strategies to address the leading causes of chronic disease, such as tobacco use, obesity and poor nutrition. Participating communities – often led by county governments – are building coalitions of businesses, health departments, faith-based organizations and other partners to implement strategies tailored to improve the health of their populations.

• Supporting the PPHF will ensure that our nation’s communities will be served by a professional public health workforce. Local public health departments have shed 29,000 jobs since January 2009 – 19 percent of the local public health workforce. The PPHF invested $50 million in FY2012 in CDC training public health professionals to improve access to prevention and health services in underserved communities. Routine placement of CDC fellows in county health departments strengthens their ability to serve on the front lines of public health and respond to emergencies. The PPHF also invested $33 million in the Public Health and Preventive Medicine program administered by the Health Resources and Services Administration (HRSA), funding 33 centers to strengthen the workforce in local and state health departments to improve the capacity and quality of a broad range of personnel to carry out core public health functions and essential public health services.

• The PPHF improves core public health functions. The National Public Health Improvement Initiative (NPHII) invested $40 million from the PPHF in health departments by providing staff, training, tools and technical/capacity building assistance dedicated to establishing performance management and evidence-based practices that drive improved service delivery and better health outcomes.

• The PPHF supports cost-effective and life-saving immunizations. The PPHF provided $620 million in FY2012 for the CDC Section 317 Immunization program which provides funds for vaccine purchase for at-need populations and immunization program operations, including support for implementing billing systems for immunization services at public health clinics to sustain high levels of vaccine coverage. Immunizations continue to be one of the most cost-effective public health interventions. According to CDC, childhood vaccines saved 42,000 lives and prevented 20 million cases of disease with an estimated $10.20 in savings for every $1 invested.

• The PPHF funds early and rapid detection of disease and injury. The CDC Epidemiology and Lab Capacity (ELC) grant program is a single grant vehicle for multiple programmatic initiatives that strengthen local and state capacity to perform critical epidemiology and laboratory work by detecting, tracking and responding to known infectious disease threats in communities and maintaining core capacity to be the nation's eyes and ears on the ground to detect new threats as they emerge. The ELC grant program was funded at $104 million in FY2012.

For further information, contact: Paul Beddoe at 202.942.4230 or [email protected]




U.S. House Energy and Commerce Committee U.S. Senate Health Education Labor & Pensions Committee

Majority: Fred Upton (R-MI), Chairman* Ralph Hall (R-TX)* Joe Barton (R-TX), Chairman Emeritus* Ed Whitfield (R-KY)* John Shimkus (R-IL)* Joseph R. Pitts (R-PA)* Greg Walden (R-OR) Lee Terry (R-NE) Mike Rogers (R-MI)* Tim Murphy (R-PA)* Michael C. Burgess (R-TX)* Marsha Blackburn (R-TN) - Vice Chairman* Phil Gingrey (R-GA)* Steve Scalise (R-LA)

Bob Latta (R-OH) Cathy McMorris Rodgers (R-WA) Gregg Harper (R-MS) Leonard Lance (R-NJ)* Bill Cassidy (R-LA)* Brett Guthrie (R-KY)* Pete Olson (R-TX) David McKinley (R-WV) Cory Gardner (R-CO) Mike Pompeo (R-KS) Adam Kinzinger (R-IL) Morgan Griffith (R-VA)* Gus Bilirakis (R-FL) Bill Johnson (R-OH) Billy Long (R-MO) Renee Ellmers (R-NC)*

Majority: Tom Harkin (D-IA), Chairman Barbara A. Mikulski (D-MD)* Patty Murray (D-WA) Bernard Sanders (I-VT)* Robert P. Casey, Jr. (D-PA) Kay R. Hagan (D-NC)* Al Franken (D-MN) Michael F. Bennet (D-CO) Sheldon Whitehouse (D-RI)* Tammy Baldwin (D-WI)* Christopher Murphy (D-CT)* Elizabeth Warren (D-MA)*

Minority: Henry Waxman (D-CA), Ranking Member* John D. Dingell (D-MI)* Edward J. Markey (D-MA) Frank Pallone Jr. (D-NJ)* Bobby L. Rush (D-IL) Anna G. Eshoo (D-CA) Eliot L. Engel (D-NY)* Gene Green (D-TX)* Diana DeGette (D-CO) Lois Capps (CD-A)* Michael F. Doyle (D-PA) *Member of Health Subcommittee

Jan Schakowsky (D-IL)* Jim Matheson (D-UT)* G. K. Butterfield (NC)* John Barrow (D-GA)* Doris O. Matsui (D-CA) Donna Christensen (D-VI)* Kathy Castor (D-FL)* John Sarbanes (D-MD)* Jerry McNerney (D-CA) Bruce Braley (D-IA) Peter Welch (D-VT) Ben Ray Lujan (D-NM) Paul Tonko (D-NY)

Minority: Lamar Alexander (R-TN), Ranking Member Michael B. Enzi (R-WY)* Richard Burr (R-NC)* Johnny Isakson (R-GA) Rand Paul (R-KY) Orrin G. Hatch (R-UT) Pat Roberts (R-KS)* Lisa Murkowski (R-AK)* Mark Kirk (R-IL)* Tim Scott (R-SC) *Member of Primary Health and Aging Subcommittee



• In 32 states, counties are required to provide health care for low income, uninsured or underinsured residents

• In 22 states, counties are required to contribute to the non-federal share of Medicaid

• Counties spend $68 billion

annually on health care services • Counties run 964 hospitals

nationwide • Counties run 647 nursing homes –

75 percent of publicly owned facilities

PROTECT THE FEDERAL-STATE-LOCAL PARTNERSHIP FOR MEDICAID ACTION NEEDED: Urge your Senators and Representatives to support the federal-state-local partnership structure for financing and delivering Medicaid services and to oppose any measure that would further shift federal and state Medicaid costs to counties including cuts, caps, block grants and new limits on counties’ ability to raise the non-federal match or receive supplemental payments. This will enable counties to continue to maintain their local health care safety-net systems with a balanced mix of federal, state and local resources, while adjusting to a rapidly changing health care environment. BACKGROUND: Authorized under Title XIX of the Social Security Act, Medicaid is a means-tested entitlement program administered by the states which provides health and long-term care insurance to about 56 million low-income children, families, seniors and persons with disabilities at a total cost of over $427 billion. Medicaid is financed by both the federal and state governments based on the federal medical assistance percentage (FMAP), which is individually calculated for each state. Counties are required to provide health care for low income, uninsured or underinsured residents in 32 states. There are 964 county hospitals and 647 county nursing homes serving Medicaid beneficiaries in communities nationwide. Additionally, counties put up part of the non-federal match for Medicaid in 22 states. Deficit reduction measures that reduce the federal financial contribution to Medicaid puts counties at risk for absorbing shifted costs by raising local taxes or cutting other local budget line items since counties are often required by state law to provide health care services for vulnerable populations. Under the Affordable Care Act (ACA), states will have the option to expand Medicaid coverage for all non-elderly adults with incomes below 133 percent of the federal poverty level beginning in 2014. The ACA offers 100 percent federal funding to cover the expansion population for 2014 through 2016, ramping down to 90 percent in 2020 and the years thereafter. Medicaid expansion will reduce counties’ costs for providing often mandatory care to low income, uninsured or underinsured residents. KEY TALKING POINTS: • Medicaid is already a lean program. Medicaid’s average cost per beneficiary is significantly lower than private

insurance, even with its comprehensive benefits and lower cost-sharing. Counties have made the most of Medicaid’s flexibility by leveraging local funds to construct systems of care for populations that private insurance does not cover. New limits on counties’ ability to receive supplemental payments or raise the non-federal match

QUICK FACTS

NATIONAL ASSOCIATION OF COUTNIES | 25 MASSACHUSETTS AVENUE, NW SUITE 500 | WASHINGTON, DC 20001 | 202.393.6226 | FAX 202.393.2630 | WWW.NACO.ORG

through certified public expenditures (CPEs) and intergovernmental transfers (IGTs) would severely compromise the local health care safety-net.

• A Medicaid block grant would not reform Medicaid – it would merely cut federal spending by shifting expenses

to state and county taxpayers. According to the Congressional Budget Office, the House FY2013 budget resolution block grant would have cut $770 billion over ten years and would have caused states either to increase health care spending to make up for the federal cut or to reduce access to care for beneficiaries. Either option would shift costs to county taxpayers and reduce county capacity to provide health care services – including those mandated by state laws.

• Imposing spending caps on Medicaid will not address the underlying drivers of the program’s costs. Caps do not

account for long-term trends like the aging population and rising health care costs that are projected to drive higher federal entitlement spending in the coming years. Complying with a cap designed to reduce the deficit significantly would require significant cuts to the federal contribution, making states, and ultimately counties, absorb the cost shift.

COMMITTEES OF JURISDICTION

House Energy and Commerce Committee U.S. Senate Finance Committee Majority: Fred Upton (R-MI), Chairman* Ralph Hall (R-TX)* Joe Barton (R-TX), Chairman Emeritus* Ed Whitfield (R-KY)* John Shimkus (R-IL)* Joseph R. Pitts (R-PA)* Greg Walden (R-OR) Lee Terry (R-NE) Mike Rogers (R-MI)* Tim Murphy (R-PA)* Michael C. Burgess (R-TX)* Marsha Blackburn (R-TN), Vice Chairman* Phil Gingrey (R-GA)* Steve Scalise (R-LA)

Bob Latta (R-OH) Cathy McMorris Rodgers (R-WA) Gregg Harper (R-MS) Leonard Lance (R-NJ)* Bill Cassidy (R-LA)* Brett Guthrie (R-KY)* Pete Olson (R-TX) David McKinley (R-WV) Cory Gardner (R-CO) Mike Pompeo (R-KS) Adam Kinzinger (R-IL) Morgan Griffith (R-VA)* Gus Bilirakis (R-FL) Bill Johnson (R-OH) Billy Long (R-MO) Renee Ellmers (R-NC)*

Majority: Max Baucus (D-MT), Chairman John D. Rockefeller (D-WV)* Ron Wyden (D-OR)* Charles E. Schumer (D-NY) Debbie Stabenow (D-MI)* Maria Cantwell (D-WA)* Bill Nelson (D-FL)* Robert Menendez (D-NJ)* Thomas R. Carper (D-DE)* Benjamin Cardin (D-MD)* Sherrod Brown (D-OH) Michael F. Bennet (D-CO) Bob Casey (D-PA)*

Minority: Henry Waxman (D-CA), Ranking Member* John D. Dingell (D-MI)* Edward J. Markey (D-MA) Frank Pallone Jr. (D-NJ)* Bobby L. Rush (D-IL) Anna G. Eshoo (D-CA) Eliot L. Engel (D-NY)* Gene Green (D-TX)* Diana DeGette (D-CO) Lois Capps (CD-A)* Michael F. Doyle (D-PA) *Member of Health Subcommittee

Jan Schakowsky (D-IL)* Jim Matheson (D-UT)* G. K. Butterfield (NC)* John Barrow (D-GA)* Doris O. Matsui (D-CA) Donna Christensen (D-VI)* Kathy Castor (D-FL)* John Sarbanes (D-MD)* Jerry McNerney (D-CA) Bruce Braley (D-IA) Peter Welch (D-VT) Ben Ray Lujan (D-NM) Paul Tonko (D-NY)

Minority: Orrin G. Hatch (R-UT), Ranking Member* Chuck Grassley (R-IA)* Mike Crapo (R-ID) Pat Roberts (R-KS)* Michael B. Enzi (R-WY)* John Cornyn (R-TX)* John Thune (R-SD) Richard Burr (R-NC)* Johnny Isakson (R-GA) Rob Portman (R-OH) Patrick J. Toomey (R-PA)* *Members of Health Care Subcommittee


http://www.naco.org/




FUND THE SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES ADMINISTRATION

ACTION NEEDED: Urge your Senators and Representatives to maintain funding for the U.S. Department of Health and Human Services (HHS) Substance Abuse and Mental Health Services Administration (SAMHSA) in the FY2013 and FY2014 Labor-HHS-Education appropriations bill at least at FY2012 levels, especially the Community Mental Health Services (CMHS), and Substance Abuse Prevention and Treatment (SAPT) block grants. BACKGROUND: SAMHSA was established in 1992 and directed by Congress to target substance abuse and mental health services to the people most in need and to translate research in these areas into the general health care system. To accomplish its work SAMHSA administers a combination of competitive, formula and block grant programs and data collection activities, including the CMHS and SAPT block grants, which states use to fund direct services through the 750 county behavioral health authorities nationwide and through other community providers. Behavioral health services improve population health status, and reduce health care and justice system costs to counties. KEY TALKING POINTS: • Congress should fund the Community and Mental Health

Services Block Grant at $459.7 million in the FY2014 Labor-HHS-Education appropriations bill. The CMHS Block Grant is the principal federal discretionary program supporting community-based mental health services for adults and children. Counties may use block grant dollars to provide a range of services for adults with serious mental illnesses and children with serious emotional disturbances, including employment and housing assistance, case management (including Assertive Community Treatment), school-based support services, family and parenting education, and peer support. The CMHS Block Grant received $459.7 million in FY2012.

• Congress should fund the Substance Abuse Prevention and Treatment Block Grant at $1.8 billion in the FY2014 Labor-HHS-Education appropriations bill. County behavioral health authorities use the SAPT Block Grant to serve vulnerable, low-income populations—those with HIV/AIDS, pregnant and parenting women, youth and others—by ensuring access to substance abuse services. An independent 2009 study of the SAPT Block Grant found the program to produce positive outcomes,

• There are more than

750 county behavioral health and developmental disability authorities nationwide

• Counties plan, operate and finance community-based services for persons with mental illness, substance abuse disorders and developmental disabilities

QUICK FACTS


including increased abstinence from alcohol and other drugs, increased employment and decreased criminal justice involvement. The SAPT Block Grant received $1.8 billion in FY2012.

• Congress should restore the $21.5 million withheld administratively from the SAPT Block Grant. While Congress appropriated $1.8 billion for the SAPT Block Grant in FY2012, HHS “tapped” or redirected $21.5 million (1.25 percent of the total) to reduce the total amount available to $1.7 billion. NACo opposes this “tap” and requests funding levels for FY2013 and FY2014 that would make the SAPT Block Grant whole.


U.S. House Appropriations Committee U.S. Senate Appropriations Committee Majority: Harold Rogers (R-KY), Chairman C.W. Bill Young (R-FL) Frank R. Wolf (R-VA) Jack Kingston (R-GA)* Rodney Frelinghuysen (R-NJ) Tom Latham (R-IA) Robert B. Aderholt (R-AL) Kay Granger (R-TX) Michael Simpson (R-ID)* John Abney Culberson, (R-TX) Ander Crenshaw, (R-FL) John R. Carter (R-TX) Rodney Alexander (R-LA)* Ken Calvert (R-CA) Jo Bonner (R-AL)

Tom Cole (R-OK) Mario Diaz-Balart (R-FL) Charles Dent (R-PA) Tom Graves (R-GA) Kevin Yoder (R-KS) Steve Womack (R-AR)* Alan Nunnelee (R-MS) Jeff Fortenberry (R-NE) Tom Rooney (R-FL) Chuck Fleischmann (R-TN)* Jaime Herrera Beutler (R-WA) David Joyce (R-OH)* David Valadao (R-CA) Andy Harris (R-MD)

Majority: Barbara Mikulski (D-MD), Chairwoman* Patrick Leahy (D-VT) Tom Harkin (D-IA)* Patty Murray (D-WA)* Dianne Feinstein (D-CA) Richard Durbin (D-IL)* Tim Johnson (D-SD) Mary Landrieu (D-LA)* Jack Reed (D-RI)* Frank Lautenberg (D-NJ) Mark Pryor (D-AR)* Jon Tester (D-MT)* Tom Udall (D-NM) Jeanne Shaheen (D-NH)* Jeff Merkley (D-OR)* Mark Begich (D-AK)

Minority: Nita Lowey (D-NY), Ranking Member Marcy Kaptur (D-OH) Pete Visclosky (D-IN) José Serrano (D-NY) Rosa DeLauro (D-CT)* James Moran (D-VA) Ed Pastor (D-AZ) David Price (D-NC) Lucille Roybal-Allard (D-CA)* Sam Farr (D-CA) Chaka Fattah (D-PA) *Member of the Labor-HHS-Ed Subcommittee

Sanford Bishop (D-GA) Barbara Lee (D-CA)* Adam Schiff (D-CA) Michael Honda (D-CA)* Betty McCollum (D-MN) Tim Ryan (D-OH) Debbie Wasserman- Schultz (D-FL) Henry Cuellar (D-TX) Chellie Pingree (D-ME) Mike Quigley (D-IL)

Minority: Richard Shelby (R-AL), Vice Chairman* Thad Cochran (R-MS)* Mitch McConnell (R-KY) Lamar Alexander (R-TN)* Susan Collins (R-ME) Lisa Murkowski (R-AK) Lindsey Graham (R-SC)* Mark Kirk (R-IL)* Dan Coats (R-IN) Roy Blunt (R-MO) Jerry Moran (R-KS)* John Hoeven (R-ND) Mike Johanns (R-NE)* John Boozman (R-AR)* *Member of the Labor-HHS-Ed Subcommittee





• Counties spend approximately $73.6 billion each year on the operation of corrections, legal (courts), firefighting and law enforcement

• There are 13 million jail

admissions and releases annually in county jails, involving about 10 million individuals

• 68 percent of jail inmates meet

clinical criteria for substance abuse or dependence

• 96 percent of jail inmates do not

go to prison, return directly to the community, with their health conditions

• Study shows health care costs

drop between 4.4 percent and 7.7 percent after expanding access to substance use treatment to low income population

EXTEND HEALTH BENEFIT COVERAGE TO PRE-TRIAL JAIL INMATES

ACTION NEEDED: Urge your Senators and Representatives to require the U.S. Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) to allow an otherwise eligible person who is in custody, pending disposition of charges, to continue receiving federal health benefits until they are convicted, sentenced and incarcerated. This will enable counties to provide better health care to pretrial inmates at lower cost to local property taxpayers.

BACKGROUND: Title XIX of the Social Security Act, which governs the Medicaid program, prohibits Federal Financial Participation (FFP) – the federal match – for services provided to “inmates of a public institution” even if they are eligible for, and enrolled in, Medicaid (Section 1905(a)(A)). States refuse to assume the federal share of providing Medicaid services to eligible persons in county custody, terminating benefits and even eligibility. As a consequence, the entire cost of medical care for all arrested and detained individuals falls to the counties – note, these individuals have NOT been convicted and are presumed innocent. Once an individual’s Medicaid eligibility has been terminated, it may take months to reenroll and for benefits to be restored when they are released back into the community. These coverage gaps result in discontinued care and contribute to recidivism (repeat offenses). Medicare, the Children’s Health Insurance Program (CHIP) and Veterans Administration health benefits are similarly restricted. Beginning in 2014, the Affordable Care Act (ACA) will require Qualified Health Plans (QHPs) offered on the new Affordable Health Insurance Exchanges to cover qualified individuals who are incarcerated pending disposition of charges. An estimated one-third of the pre-trial jail population may be eligible for subsidized QHP coverage and many more for Medicaid coverage (in states that choose to expand Medicaid under the ACA) based on income and/or disability status in 2014. CMS has so far declined NACo’s request (1) to harmonize the definition of “inmate” for Medicaid purposes with the ACA “incarcerated pending disposition” provision, (2) to clarify that jail officials may submit enrollment applications on behalf of persons in custody, and (3) to require that states stop terminating eligibility for persons in custody pending disposition.

QUICK FACTS


KEY TALKING POINTS: Extending health benefit coverage to those in pre-trial custody enables counties to provide better health care to: • Increase access to primary care, and behavioral health and substance abuse treatment for justice

involved individuals, which has been shown to reduce health care, disability and criminal justice costs

• Provide access to required jail health care at very low cost to states and counties, relieving pressure on local tax payers

• Advance public health and social stability by integrating and coordinating care, and reducing gaps in health care for those in pretrial custody and then released back into communities

• Reduce health disparities by providing health insurance coverage to a population of low-income adults with substantial physical, mental health and substance abuse needs

• Positions jails as potential enrollment catchment areas for vulnerable populations, providing an opportunity to break the cycle of recidivism caused or exacerbated by untreated mental illness, substance abuse and other co-occurring disorders


House Energy and Commerce Committee U.S. Senate Finance Committee Majority: Fred Upton (R-MI), Chairman* Ralph Hall (R-TX)* Joe Barton (R-TX), Chairman Emeritus* Ed Whitfield (R-KY)* John Shimkus (R-IL)* Joseph R. Pitts (R-PA)* Greg Walden (R-OR) Lee Terry (R-NE) Mike Rogers (R-MI)* Tim Murphy (R-PA)* Michael C. Burgess (R-TX)* Marsha Blackburn (R-TN), Vice Chairman* Phil Gingrey (R-GA)* Steve Scalise (R-LA)

Bob Latta (R-OH) Cathy McMorris Rodgers (R-WA) Gregg Harper (R-MS) Leonard Lance (R-NJ)* Bill Cassidy (R-LA)* Brett Guthrie (R-KY)* Pete Olson (R-TX) David McKinley (R-WV) Cory Gardner (R-CO) Mike Pompeo (R-KS) Adam Kinzinger (R-IL) Morgan Griffith (R-VA)* Gus Bilirakis (R-FL)* Bill Johnson (R-OH) Billy Long (R-MO) Renee Ellmers (R-NC)*

Majority: Max Baucus (D-MT), Chairman John D. Rockefeller (D-WV)* Ron Wyden (D-OR)* Charles E. Schumer (D-NY) Debbie Stabenow (D-MI)* Maria Cantwell (D-WA)* Bill Nelson (D-FL)* Robert Menendez (D-NJ)* Thomas R. Carper (D-DE)* Benjamin Cardin (D-MD)* Sherrod Brown (D-OH) Michael F. Bennet (D-CO) Bob Casey (D-PA)*

Minority: Henry Waxman (D-CA), Ranking Member* John D. Dingell (D-MI)* Edward J. Markey (D-MA) Frank Pallone Jr. (D-NJ)* Bobby L. Rush (D-IL) Anna G. Eshoo (D-CA) Eliot L. Engel (D-NY)* Gene Green (D-TX)* Diana DeGette (D-CO) Lois Capps (D-CA)* Michael F. Doyle (D-PA) * Members of Health Subcommittee

Jan Schakowsky (D-IL)* Jim Matheson (D-UT)* G. K. Butterfield (D-NC)* John Barrow (D-GA)* Doris O. Matsui (D-CA) Donna Christensen (D-VI)* Kathy Castor (D-FL)* John Sarbanes (D-MD)* Jerry McNerney (D-CA) Bruce Braley (D-IA) Peter Welch (D-VT) Ben Ray Lujan (D-NM) Paul Tonko (D-NY)

Minority: Orrin G. Hatch (R-UT), Ranking Member* Chuck Grassley (R-IA)* Mike Crapo (R-ID) Pat Roberts (R-KS)* Michael B. Enzi (R-WY)* John Cornyn (R-TX)* John Thune (R-SD) Richard Burr (R-NC)* Johnny Isakson (R-GA) Rob Portman (R-OH) Patrick J. Toomey (R-PA)* *Members of Health Care Subcommittee





• Counties in California, Colorado, Minnesota, New Jersey, North Carolina, North Dakota, Ohio, Virginia and Wisconsin, as well as Montgomery County, Maryland operate TANF

• TANF has not received a long-

term reauthorization since 2005 and is scheduled to expire March 27, 2013 as part of the FY2013 Continuing Resolution

• The original intent of TANF was

to allow states to design the program according to their needs, but that flexibility has since been reduced and should be restored

REAUTHORIZE THE TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) BLOCK GRANT

ACTION NEEDED: Contact your members of Congress, particularly those who serve on the House Ways and Means Committee, the House Education and the Workforce Committee, the Senate Finance Committee, and the Senate Health, Education, Labor and Pensions Committee and urge them to enact long-term reauthorization of the Temporary Assistance for Needy Families Block Grant (TANF) that enhances state and county flexibility. BACKGROUND: The TANF program was created in 1996 (P.L. 104-193) and replaced the Aid to Families with Dependent Children (AFDC). TANF is administered by the U.S. Department of Health and Human Services and has four program goals: provide assistance to needy families so that children can be cared for in their own homes; reduce the dependency of needy parents by promoting job preparation, work and marriage; prevent and reduce unplanned pregnancies among single young adults; and encourage the formation and maintenance of two-parent families. TANF is a block grant to states, but it is mandatory funding, meaning that it is not subject to appropriations. The program has been funded at $16.5 billion since its inception. In addition to the federal funding, states must contribute to the program, through a maintenance of effort (MOE) requirement that is 80 percent of their 1994 AFDC match. In 2011 the state MOE contribution was $15 billion. TANF is a partnership between the federal government and the states, but some states partner with their counties in the operation of the program. These states are California, Colorado, Minnesota, New Jersey, New York, North Carolina, North Dakota, Ohio, Virginia and Wisconsin. Additionally, Montgomery County, Maryland operates TANF. TANF was designed to give states great flexibility in program design and determining eligibility, benefits and services. TANF funds are used for cash assistance as well as non-cash assistance such as child care, education and job training and work support programs. While states have more flexibility under TANF than they did under AFDC, there are some key requirements. In order for families to qualify for TANF, states must require participation in work activities and must have a certain percentage of the families involved in work activities for at least 30 hours a week, or 20 hours for single

QUICK FACTS


parents with small children. There is a five-year limit for cash assistance to families that include an adult recipient, although states can exceed the time limit for up to 20 percent of the caseload based on hardship. TANF originally had 12 activities that counted toward work participation, but the Deficit Reduction Act of 2005 (DRA, P.L. 109-171) reduced them to nine core activities and three non-core activities. Non-core activities can only count if the person participates in core activities for at least 20 hours a week. The nine core activities are unsubsidized employment, subsidized private-sector employment, work experience, on-the-job training, job search and job readiness, community service, vocational education, and providing child care to an individual participating in community service. The non-core activities are job skills training directly related to employment, education directly related to employment, and satisfactory attendance at a secondary school or high school equivalency (GED) program. High school or participation in a GED program counts as a core activity for parents under the age of 20. Some of these activities have further restrictions. Job search and job readiness can only be undertaken for six weeks a year or four consecutive weeks. Vocational education is limited to 12 months and for no more than 30 percent of the families. TANF was reauthorized as part of the 2005 DRA. That reauthorization expired in 2010, and the program has since been reauthorized through a series of short-term extensions. The final extension will expire March 27, 2013 as part of the Continuing Resolution (P.L. 112-175). TANF will most likely have another short-term extension. KEY ISSUES: • The Temporary Assistance to Needy Families (TANF) block grant provides funding to states to help families

reduce welfare dependency and allows states to design and implement the program according to their needs. Counties that operate TANF have a direct stake in the program. Counties share administrative costs and may also contribute to the Maintenance of Effort requirements. Additionally, sanctions that are imposed on the state for failure to meet program requirements are often passed down to the counties. Counties in all states benefit if TANF participants are able to find employment and attain self-sufficiency.

• Long-term reauthorization of TANF will provide program continuity. Short-term extensions create uncertainty and make it difficult to plan.

• TANF reauthorization should provide greater state and county flexibility to deliver services that support families and help move them off welfare, including allowing higher education to count as work and realistic time limits on education.

• Many TANF families struggle with multiple barriers to self-sufficiency, such as disabilities, mental health issues, domestic violence and substance abuse. As a result, they may not always be able to meet the full participation requirements. States and counties should be given the flexibility to provide partial credit to these families with special needs.

For further information, contact: Marilina Sanz at 202.942.4260 or [email protected]



COMMITTEES OF JURISDICTION: The following four committees share jurisdiction over the education and training aspects of TANF

U.S. House Ways and Means U.S. Senate Finance Committee Majority: Dave Camp (R-MI), Chairman Adrian Smith (R-NE) Sam Johnson (R-TX) Aaron Schock (R-IL) Kevin Brady (R-TX) Lynn Jenkins (R-KS) Paul Ryan (R-WI) Erik Paulsen (R-MN) Devin Nunes (R-CA) Kenny Marchant (R-TX) Pat Tiberi (R-OH) Diane Black (R-TN)

Dave G. Reichert (R-WA) Tom Reed (R-NY) Charles W. Boustany Jr. (R-LA) Todd Young (R-IN) Peter J. Roskam (R-IL) Mike Kelly (R-PA) Jim Gerlach (R-PA) Tim Griffin (R-AR) Tom Price (R-GA) Jim Renacci (R-OH) Vern Buchanan (R-FL)

Majority: Max Baucus (D-MT), Chairman John D. Rockefeller IV (D-WV) John F. Kerry (D-MA) Ron Wyden (D-OR) Charles E. Schumer (D-NY) Debbie Stabenow (D-MI) Maria Cantwell (D-WA) Bill Nelson (D-FL) Robert Menendez (D-NJ) Thomas R. Carper (D-DE) Benjamin L. Cardin (D-MD)

Minority: Sander Levin (D-MI), Ranking Member John B. Larson (D-CT) Charles B. Rangel (D-NY) Earl Blumenauer (D-OR) Jim McDermott (D-WA) Ron Kind (D-WI) John Lewis (D-GA) Bill Pascrell Jr. (D-NJ)

Richard E. Neal (D-MA) Joseph Crowley (D-NY) Xavier Becerra (D-CA) Allyson Schwartz (D-PA) Lloyd Doggett (D-TX) Danny Davis (D-IL) Mike Thompson (D-CA) Linda Sanchez (D-CA)

Minority: Orrin G. Hatch (R-UT), Ranking Member Chuck Grassley (R-IA) Mike Crapo (R-ID) Pat Roberts (R-KS) Michael B. Enzi (R-WY) John Cornyn (R-TX) Tom Coburn (R-OK) John Thune (R-SD) Richard Burr (R-NC)

U.S House Education and the Workforce Committee Majority: John Kline (R-MN), Chairman Scott DesJarlais (R-TN) Thomas Petri (R-WI) Todd Rokita (R-IN) Buck McKeon (R-CA) Larry Bucshon (R-IN) Joe Wilson (R-SC) Trey Gowdy (R-SC) Virginia Foxx (R-NC) Lou Barletta (R-PA) Tom Price (R-GA)

Martha Roby (R-AL) Kenny Marchant (R-TX) Joseph Heck (R-NV) Duncan Hunter (R-CA) Susan Brooks (R-IN) David Roe (R-TN) Richard Hudson (R-NC) Glenn Thompson (R-PA) Luke Messer (R-IN) Tim Walberg (R-MI) Matt Salmon (R-AZ) Brett Guthrie (R-KY)

U.S. Senate Health, Education, Labor and Pensions Committee Majority Tom Harkin (D-IA), Chairman Barbara Mikulski (D-MD) Patty Murray (D-WA) Bernard Sanders (I-VT) Robert Casey, Jr. (D-PA) Kay Hagan (D-NC) Al Franken (D-MN) Michael Bennet (D-CO) Sheldon Whitehouse (D-RI) Tammy Baldwin (D-WI) Christopher Murphy (D-CT) Elizabeth Warren (D-MA)

Minority: George Miller (D-CA) Senior Dem. Timothy Bishop (D-NY) Robert Andrews (D-NJ) David Loebsack (D-IA) Bobby Scott (D-VA) Joe Courtney (D-CT) Ruben Hinojosa (D-TX) Marcia Fudge (D-OH) Carolyn McCarthy (D-NY)

Jared Polis (D-CO) John Tierney (D-MA) Gregorio Sablan (D-NMI) Rush Holt (D-NJ) John Yarmuth (D-KY) Susan Davis (D-CA) Frederica Wilson (D-FL) Raul Grijalva (D-AZ) Suzanne Bonamici (D-OR)

Minority Lamar Alexander (R-TN), Ranking Member Michael Enzi (R-WY) Richard Burr (R-NC) Johnny Isakson (R-GA) Rand Paul (R-KY) Orrin Hatch (R-UT) Pat Roberts (R-KS) Lisa Murkowski (R-AK) Mark Kirk (R-Il) Tim Scott (R-SC)



SUPPORT VULNERABLE YOUTH: REAUTHORIZE THE JUVENILE

JUSTICE AND DELINQUENCY PREVENTION ACT

ACTION NEEDED: Urge your Members of Congress, especially those that serve on the House and Senate Judiciary Committee, to support and cosponsor bipartisan legislation which would reauthorize the Juvenile Justice and Delinquency Prevention Act (JJDPA). BACKGROUND: The Juvenile Justice and Delinquency Prevention Act (JJDPA) is the principal federal program through which the federal government sets standards for the care and custody of juveniles, and improves juvenile justice systems at the state and local levels. It also provides direct funding to states and counties for research, training, and technical assistance and evaluation of the entire youth system. Originally enacted in 1974, JJDPA has been amended several times over the past 30 years, but its basic composition has remained relatively the same and this framework has led to continuing success. The most recent, broadly supported, and bipartisan proposal to reauthorize the JJDPA was S. 678, the Juvenile Justice and Delinquency Prevention Reauthorization Act of 2009, which included specific new provisions to this long-standing law designed to increase evidence-based screening and assessment for children and youth who come into contact with the courts, as well as to improve family and community supports and services for mental health and behavioral health. However, this legislation was not enacted in the 112th Congress and JJPDA is set to expire in September 2013. Senate Judiciary Chairman Patrick Leahy (D-VT) has indicated it is a Committee priority to reauthorize the JJDPA program during the 113th Congress, and he is expected to introduce bipartisan legislation before the end of the year. In the House, Judiciary Chairman Robert Goodlatte (R-VA) has yet to indicate his intent to reauthorize JJPDA before the end of the year. Nonetheless, JJPDA reauthorization will remain critical to counties. Since inception, JJDPA has provided critical federal funding to states and counties to comply with a set of core protections that shield youth from the dangers of adult jails, keep status offenders out of locked custody and address the disproportionate treatment of minorities in the justice system. Title II of the law establishes State Formula Funds to support state compliance with these core protections, helping to ensure that states have the resources to build effective statewide systems that reduce recidivism and promote public safety. The Incentive Grants for Local Delinquency

• Each year, local juvenile courts handle an estimated 1.6 million delinquency cases and adjudicate youth delinquents in nearly seven of every 10 petitioned cases

• The Juvenile Accountability Block Grant (JABG) Program assists counties in anti-gang prevention and anti-bullying initiatives; graduated sanctions programs that include counseling, restitution, community service, and supervised probation; substance abuse programs; mental health screening and treatment; reentry; and restorative justice programs

• JJPDA is set to expire in September 2013 without Congressional action. The continuing success of effective nationwide juvenile crime prevention and deterrence depends on Congress reauthorizing JJDPA

QUICK FACTS

NATIONAL ASSOCIATION OF COUNITES | 25 MASSACHUSETTS AVENUE, NW SUITE 500 | WASHINGTON, DC 20001 | 202.393.6226 | FAX 202.393.2630 | WWW.NACO.ORG

Prevention Program, commonly known as the Community Prevention Grants Program and authorized under Title V of the JJDPA, provides funding to local governments for collaborative, community-focused and community-based delinquency prevention efforts to reach youth in high-risk situations before they make poor choices. And finally, the Juvenile Accountability Block Grant (JABG)—authorized under the Omnibus Crime Control and Safe Streets Act of 2002 and administered by the Department of Justice's Office of Juvenile Justice and Delinquency Prevention—supports state and local units of government, particularly law enforcement, in their efforts to support the state plan (i.e., Title II) and strengthen their juvenile justice systems. JABG provides funding for a variety of different programs, including but not limited to, gang prevention and anti-bullying initiatives; graduated sanctions programs that include counseling, restitution, community service, and supervised probation; substance abuse programs; mental health screening and treatment; reentry; and restorative justice programs. Collectively, these programs authorized in JJDPA are used in states and counties to reduce juvenile offending by providing judges and other juvenile justice officials with a range of age and developmentally appropriate options that hold youth accountable while giving them the assistance they need to turn their lives around so they are less likely to reoffend. They are all critical to many communities nationwide, and allow counties to identify gaps in their continuum of services, implement innovative, research-based programming and increase evidence-based screening and assessment for children and youth. The continuing success of effective nationwide juvenile crime prevention and deterrence depends on Congress reauthorizing JJDPA, as well as providing the resources needed to fulfill its provisions. Congress must continue to support and improve the four core principles of law, including: deinstitutionalization of status offenders (DSO), sight and sound separation, jail removal, and disproportionate minority confinement (DMC) as part of any multiyear JJDPA reauthorization bill. KEY TALKING POINTS: • Counties are the principal providers of juvenile court and detention services for youth. Furthermore,

counties operate and fund the wide majority of local health, human service and social service agencies for juveniles to ensure success and continuum of care.

• Many youth who are confined are nonviolent and highly amenable to the benefits of rehabilitative services and supports.

• The Juvenile Justice and Delinquency Prevention Act (JJDPA) provides critical federal funding, research and technical assistance to states and counties to comply with a set of core protections that shield youth from the dangers of adult jails, keep status offenders out of locked custody, and address the disproportionate treatment of minorities in the justice system.

• Programs funded in JJDPA assist counties in investing in collaborative, community-based delinquency prevention efforts to reach high-risk youth. For instance, the Juvenile Accountability Block Grant (JABG) Program assists counties in gang prevention and anti-bullying initiatives; graduated sanctions programs that include counseling, restitution, community service and supervised probation; substance abuse programs; mental health screening and treatment; reentry; and restorative justice programs.

• JJPDA is set to expire in September 2013, and Congress must act. The continuing success of effective nationwide juvenile crime prevention and deterrence depends on Congress reauthorizing JJDPA, as well as providing the resources needed to fulfill its provisions. Also, Congress must continue to support and improve the four core principles of law, including: deinstitutionalization of status offenders (DSO), sight and sound separation, jail removal, and disproportionate minority confinement (DMC) as part of any multiyear JJDPA reauthorization bill

NATIONAL ASSOCIATION OF COUNITES | 25 MASSACHUSETTS AVENUE, NW SUITE 500 | WASHINGTON, DC 20001 | 202.393.6226 | FAX 202.393.2630 | WWW.NACO.ORG


For further information, contact: Dalen Harris at 202.942.4236 or [email protected]

U.S. House Judiciary Committee U.S. Senate Judiciary Committee Majority: Robert W. Goodlatte (R-VA), Chairman Trent Franks (R-AZ.) Howard Coble (R-NC) Jim Sensenbrener (R-WI) Trey Gowdy (R-SC) Spencer Bachus (R-AL) Lamar Smith (R-TX) Steve Chabot (R-OH) Darrell Issa (R-CA) J. Randy Forbes (R-VA) Steve King (R-IA) Louie Gohmert (R-TX)

Jim Jordan (R-OH) Ted Poe (R-TX) Jason Chaffetz (R-UT) Tom Marino (R-PA) Trey Gowdy (R-SC) Mark Amodei (R-NV) Raúl R. Labrador (R-ID) Blake Farenthold (R-TX) George E.B. Holding (R-NC) Doug Collins (R-GA) Ron DeSantis (R-FL) Keith Rothfus (R-PA)

Majority: Patrick J. Leahy (D-VT), Chairman Dianne Feinstein (D-CA) Charles E. Schumer (D-NY) Richard J. Durbin (D-IL) Sheldon Whitehouse (D-RI) Amy Klobuchar (D-MN) Al Franken (D-MN) Chris Coons (D-DE) Richard Blumenthal (D-CT) Mazie K. Hirono (D-HI)

Minority: John Conyers Jr. (D-MI), Ranking Member Jerrold Nadler (D-NY) Robert C. Scott (D-VA) Melvin Watt (D-NC) Zoe Lofgren (D-CA) Sheila Jackson Lee (D-TX) Steve Cohen (D-TN) Hank Johnson (D-GA) Pedro R. Pierluisi (D-PR)

Judy Chu (D-CA) Ted Deutch (D-FL) Luis V. Gutierrez (D-IL) Karen Bass (D-CA) Cedric L. Richmond (D-LA) Suzan DelBene (D-WA) Joe Garcia (D-FL) Hakeem Jeffries (D-NY)

Minority: Charles E. Grassley (R-IA), Ranking Member Orrin G. Hatch (R-UT) Jeff Sessions (R-AK) Lindsey Graham (R-SC) John Cornyn (R-TX) Mike Lee (R-UT) Ted Cruz (R-TX) Jeff Flake (R-AZ)



• Currently, there are over 2 million people incarcerated in U.S. prisons or jails and over 10 million people are booked into U.S. jails over the course of the year

• The nation's local jails are increasingly becoming the dumping grounds for the mentally ill. In fact, it is estimated that 24 percent of people booked in local jails display a pattern of symptoms that are indicative of behavioral health disorders

• Per capita aggregate federal, state and local corrections spending has increased by over 400 percent since 1982

REAUTHORIZE THE MENTALLY ILL OFFENDER TREATMENT AND CRIME REDUCTION ACT

ACTION NEEDED: Urge your Members of Congress to support and cosponsor the bicameral Justice and Mental Health Collaboration Act (H.R. 401, S. 162), which reauthorizes for five years the Mentally Ill Offender Treatment and Crime Reduction Act (MIOTCRA) program set to expire in September 2013.

BACKGROUND: Enacted by Congress in 2004, the Mentally Ill Offender Treatment and Crime Reduction Act (MIOTCRA) authorized a $50 million grant program to be administered by the U.S. Department of Justice (DOJ). The grants, which are available to state, tribal and local governments, may be used to develop and implement a variety of programs designed to improve outcomes for individuals with mental illness involved in the criminal justice system. MIOTCRA also created the Justice and Mental Health Collaboration Program (JMHCP), which helps states and counties design and implement collaborative efforts between criminal justice and mental health systems. Collectively, state and local governments use these grants for a broad range of activities, including establishing jail diversion programs, mental health courts, creating or expanding community-based treatment programs or providing in jail treatment and transitional services. In addition, grant funds may be used to enhance training for criminal justice system and mental health system personnel who must know how to respond appropriately to this population.

In 2008, Congress reauthorized the MIOTCRA program at $50 million from 2008 to 2013. However, Congressional appropriators have never fully funded the program and only provided $9 million for the program in FY2012. Regardless, MIOTCRA effectiveness is well documented and is supported in a rare bipartisan fashion by many Members of Congress.

On January 23, 2013, the Justice and Mental Health Collaboration Act (H.R. 401) was introduced in the House by Rep. Richard Nugent (R-FL), along with a bipartisan group of nine original cosponsors. The bipartisan legislation reauthorizes the Mentally Ill Offender and Treatment and Crime Reduction Act (MIOTCRA) and its current program areas for an additional 5 years. Sen. Al Franken (D-MN) introduced a companion bill (S. 162) in the Senate on January 28, 2013 and was joined by a bipartisan mix of 22 original cosponsors.

QUICK FACTS


KEY TALKING POINTS:

• The nation's local jails are increasingly becoming the dumping grounds for the mentally ill. Of the 10 million people entering county jails each year, it is estimated that 24 percent are displaying a pattern of symptoms that are indicative of behavioral health disorders. Most persons with behavioral health disorders incarcerated or detained in county jails have committed only minor infractions, which are more often the manifestation of their illness than the result of criminal intent.

• Congress authorized a program to provide assistance to this population in 2004, called the Mentally Ill Offender Treatment and Crime Reduction Act (MIOTCRA) administered by the U.S. Department of Justice to develop and implement a variety of programs designed to improve outcomes for individuals with mental illness involved in the criminal justice system. MIOTCRA provides assistance to states and communities to create new programs or expand existing programs that can both reduce costs and help mentally ill offenders return to productive lives.

• Rep. Richard Nugent (R-FL), along with a bipartisan mix of 9 original cosponsors, introduced the Justice and Mental Health Collaboration Act (H.R. 401), which reauthorizes MIOTCRA and its current program areas for an additional 5 years. Sen. Al Franken (D-MN,) and a bipartisan mix of 22 Senators, introduced companion legislation (S. 162) of the Justice and Mental Health Collaboration Act in the Senate.

• The MIOTCRA program is set to expire on September 2013, and NACo encourages members to contact their Members of Congress, and urge them to support the Justice and Mental Health Collaboration Act sponsored by Rep. Nugent and Sen. Franken.


For further information, contact: Dalen Harris at 202.942.4236 or [email protected]

House Committee on the Judiciary U.S. Senate Judiciary Committee Majority: Robert W. Goodlatte (R-VA), Chairman Trent Franks (R-AZ.) Howard Coble (R-NC) Jim Sensenbrener (R-WI) Trey Gowdy (R-SC) Spencer Bachus (R-AL) Lamar Smith (R-TX) Steve Chabot (R-OH) Darrell Issa (R-CA) J. Randy Forbes (R-VA) Steve King (R-IA) Louie Gohmert (R-TX)








• Counties spend more than $70 billion each year on criminal justice and more than $68 billion on health and human services

• 2,657 counties own and operate a jail, and between 10 and 12 million persons are released from local jails each year

• Many of these persons struggle with substance abuse, lack of adequate education and job skills and mental health issues. In addition, a large number of these people return to prison or jail within three years of their release due to inadequate services and opportunities

• The bipartisan Second Chance Act provides resources to states, local governments and nonprofit organizations to improve outcomes for people returning to communities from prisons, jails and juvenile facilities

• The Second Chance Act expires in Sept. 2013. Congress must reauthorize and provide full funding for the SCA

LOWER JAIL RECIDIVISM AND REINVEST THE SAVINGS: SUPPORT THE SECOND CHANCE ACT

ACTION NEEDED: Urge your congressional delegations, especially those serving on the House and Senate Judiciary Committees, to fund and reauthorize the Second Chance Act.

BACKGROUND: First enacted in 2008, the bipartisan Second Chance Act (P.L. 110-199) provides resources to states, local governments and nonprofit organizations to improve outcomes for individuals returning to communities from prisons, jails and juvenile facilities. Specifically, the program improves the coordination of reentry services and policies at the state, tribal and local levels. It funds local demonstration grants, reentry courts, family-centered programs, mental health and addiction treatment, employment, mentoring and other services needed to improve the transition from prison, jail or juvenile detention centers. Additionally, the Act established the National Offender Re-entry Resource Center which manages, monitors and disseminates information to state and local service providers and community organizations.

Since 2009, 368 Second Chance Act (SCA) grants have been awarded to community and faith-based organizations as well as state, local and tribal governments spanning nearly every state in the country. SCA grants have also promoted the public/private partnerships that are required to tackle the complex task of reducing recidivism. NACo had a significant role in developing the re-entry and re-investment legislation and making the case for strong local government involvement and an expansion of pretrial services.

Since 2,657 counties own and operate a jail, and between 10 and 12 million persons are released from local jails each year, SCA has been a key legislative priority since its inception. Furthermore, counties spend more than $70 billion each year on criminal justice and more than $68 billion on health and human services, so reducing recidivism in our communities yields savings, while enhancing public safety.

On April 17, 2012, the House and Senate Appropriations Commerce, Justice, Science and related agencies Subcommittees released their FY2013 appropriation bills. In the House, appropriators proposed $70 million for the Second Chance Act, but failed to include language that would reauthorize the program. Senate appropriators proposed $25 million for SCA, and they also did not include reauthorization language for SCA.

QUICK FACTS


Congress did not complete the annual appropriations process in regular order last year and instead passed a continuing resolution (CR). As a result, FY 2013 funding for the SCA grant program was not finalized and the program was never reauthorized. The CR expires on March 27, 2013, and at that time Congress may determine what will be the final allocation to the SCA grant program. Nonetheless, the current public law (P.L. 110-199) will expire in 2013, and without the passage of new legislation to reauthorize the program future funding of the SCA grant program could be in jeopardy.

NACo members are encouraged to contact their Members of Congress and urge them to fund and authorize the Second Chance Act. At a time when Congress is increasingly focused on accountability, programs like SCA assist in reducing recidivism and can yield huge savings in the criminal justice, health care and human services systems.

KEY TALKING POINTS: • According to the U. S. Bureau of Justice Statistics, there are more than 13 million admissions and releases

annually to county jails each year, involving about 10 million individuals. Of that number, only about 4 percent of jail admissions result in sentences to prison or in other terms—96 percent of jail detainees and inmates return directly to the community from jail.

• Counties spend more than $70 billion each year on criminal justice and more than $68 billion health and human services.

• Facing a number of issues and obstacles upon their return and often lacking services or support, a large number of these individuals recidivate. They return with complex health, education, housing and other needs—which, if not addressed, can increase their likelihood of returning to jail or prison.

• The Second Chance Act (SCA) outlines a common-sense, evidence-based approach to reducing crime and improving public safety. It improves the coordination of reentry services and policies at the state, tribal and local levels, and provides financial assistance for demonstration grants, reentry courts, family-centered programs, mental health and addiction treatment, employment, mentoring and other services needed to improve transition from prison, jail and the juvenile justice system.

• Authorization for the program will expire in Sept. 2013, but NACo is working with a number of lawmakers to introduce bipartisan legislation to reauthorize the program.

• Please support reauthorization of SCA and continued funding for the program.

For more information, contact: Dalen Harris at 202.942.4236 or [email protected]




House Committee on the Judiciary U.S. Senate Judiciary Committee Majority: Robert W. Goodlatte (R-VA), Chairman Trent Franks (R-AZ.) Howard Coble (R-NC) Jim Sensenbrener (R-WI) Trey Gowdy (R-SC) Spencer Bachus (R-AL) Lamar Smith (R-TX) Steve Chabot (R-OH) Darrell Issa (R-CA) J. Randy Forbes (R-VA) Steve King (R-IA) Louie Gohmert (R-TX)









SUPPORT REAUTHORIZATION

OF THE WORKFORCE INVESTMENT ACT (WIA) ACTION NEEDED: Urge your House and Senate members to reauthorize the Workforce Investment Act of 1998 (WIA) during the 113th Congress. NACo supports a Workforce Investment Act (WIA) that promotes innovation and flexibility at the state and local levels, is responsive to local emerging economic realities and business needs, and ensures U.S. workers and businesses have the skills and training needed to compete in the 21st century economy. BACKGROUND: In 1998, Congress established a framework for the nation’s workforce development system under the Workforce Investment Act (WIA). The law replaced multiple existing training programs with state formula grants, and created a nationwide network of locally administered “one stop” centers where both workers and employers could access training, employment and support programs administered through the U.S. Department of Labor (DOL) and other agencies, such as the U.S. Departments of Education and Health and Human Services. Administered at the federal level by DOL’s Employment and Training Administration (ETA), WIA is the largest single source of federal funding for workforce development activities. WIA has five titles: • Title I – Workforce Investment Systems: authorizes state

and local Workforce Investment Boards (WIBs); establishes a formula by which funds for youth, adult and dislocated workers programs flow from the federal level, through the states, to the local level; establishes performance metrics; and authorizes the nation’s youth workforce development and “one-stop” career center systems.

• Title II – Adult Education and Literacy: authorizes the Adult Education and Literacy System, which is administered at the state level to provide adult basic education and literacy programs.

• Title III – Workforce Investment Related Activities: amends the Wagner-Peyser Act, which is administered at the state level to provide labor exchange services to job seekers.

• WIA authorizes the nation’s public workforce development system

• Local elected officials play a pivotal role in the administration of regional and local Workforce Investment Act (WIA) programs

• The chief elected official (CEO) of local government is responsible for appointing the local Workforce Investment Board (WIB), and setting policy for the workforce system to achieve broader human capital and economic development goals

• Local governments partner with

federal, state, other local governments and the private sector through Workforce Investment Boards (WIBs)

• There are 522 county operated

local workforce investment boards (LWIBs) in the nation

• WIA was envisioned as a nexus for

the coordination of resources to close the gaps between the skills of America’s workforce and business’ needs for workers

QUICK FACTS


• Title IV – Rehabilitation Act Amendments of 1998: amends the nation’s Rehabilitation Act, which is administered at the state level to primarily serve the career development needs of those living with disabilities.

• Title V – General Provisions: includes provisions for a state unified plan, which encourages joint planning and coordination among programs authorized in Title I-IV of WIA.

Most critical to county governments is Title I of WIA, which authorizes the service delivery system and calls for coordination among all levels of government. Title I is the “core” of WIA. It establishes the infrastructure through which all public funding related to workforce development flows and is coordinated. Local elected officials play a pivotal role in the administration of WIA. The leadership role of elected officials is essential to maximizing WIA’s impact in state and local jurisdictions through collaboration with state and local Workforce Investment Boards (WIBs), and setting policy for the workforce system to achieve broader human capital and economic development goals. The chief elected official (CEO) is designated in local operating agreements covering local workforce investment areas, and plays a key role in WIA, as the vast majority of the funds flow to the local level to be invested in alignment with a local plan. Like the governor, the CEO is liable for these funds, which can be administered either by local government or by a fiscal agent designated by the CEO. The CEO also appoints the local WIB chair, who is accountable to the CEO for planning and oversight of the public workforce services in the area. Despite growing evidence of economic recovery, the Bureau of Labor Statistics reports that 7.8 percent of Americans remain unemployed, and millions more lack the job skills or educational credentials they need to advance their careers. At the same time, U.S. employers are struggling to fill current job openings, in part because they are unable to find qualified, trained candidates. With nearly two-thirds of all job openings between 2008-2018 projected to require at least some postsecondary education and training, it is clear that we should take concrete steps to address growing skills gaps that can otherwise stifle our economic growth for years to come. Federal workforce programs are part of the solution. Last year, more than 9 million individuals received training and related services supported under Title I of WIA—an increase of nearly 250 percent in just two years—and more than half of these individuals found employment in a tough labor market. The law authorizing WIA expired in 2003 and is currently unauthorized yet operating through the annual appropriations process, despite vast changes in economic conditions and the skill needs of a growing unemployed and underemployed population. Given these changes, it is critically important that Congress act to modernize the nation’s workforce development system to ensure that individuals at all skill levels are able to obtain the training and education they need to secure and keep jobs that lead to economic self-sufficiency, while also ensuring that businesses have access to the skilled workforce they need to compete in the global economy. Local workforce development areas are working diligently to achieve these goals. KEY TALKING POINTS: • Urge your Members of Congress to support the reauthorization of the Workforce Investment Act of

1998 (WIA) during the 113th Congress. Specifically, we support legislation that promotes innovation and flexibility at the local level, is responsive to local emerging economic realities and business needs, and will ensure that U.S. workers and businesses have the skills training they need to compete in the 21st century economy.


• As the United States continues to face high unemployment in the wake of the recent recession, federally funded workforce programs play a critical role in bridging gaps between the skills present in the workforce and the skills needed for available jobs.

• The Workforce Investment Act (WIA) envisions a prominent role for local boards and local stakeholders. As the preamble to the WIA regulations explains, the focus of these “local, business-led boards” is “strategic planning, policy development and oversight of the local workforce investment system.”

• Local elected officials play a pivotal role in the administration of WIA. The leadership role of elected officials is essential to maximizing WIA’s impact in state and local jurisdictions through collaboration with state and local Workforce Investment Boards (WIBs), and setting policy for the workforce system to achieve broader human capital and economic development goals. The chief local elected official (CEO) of local government is designated in local operating agreements covering local workforce investment areas, and is responsible for appointing the local workforce investment board (WIB), which is accountable to the CEO for planning and oversight of the public workforce services in the area.

• Local workforce development areas are best suited to adequately determine services and programs that effectively respond to local emerging economic realities and business needs. Local workforce areas should be given the authority, and the flexibility to develop programs that meet the needs of employers and employees alike. This should include the flexibility to develop sector-based, incumbent worker, and other specialized training services that respond to local economic development policies and business needs.

• To build upon the Workforce Investment Act (WIA) system, and to minimize any negative impacts on workforce development efforts at the state and local level, NACo believes the following principles should be followed in any WIA reauthorization bills Congress introduces and considers this session:

1. Maintain the current governance structure including; a. the local public-private partnership; b. the federal-state-local relationship; c. local elected official appointment authority for local workforce investment boards; d. plan development and implementation by local elected officials and local workforce boards;

and e. oversight by local elected officials and local workforce investment boards of the local one-

stop centers; 2. Maintain the current flow of funds from the federal to the state and local levels including the

percentage allotments to states and allocations to local areas; 3. Enhance services to incumbent workers as part of an ongoing economic development and

worker skills enhancement efforts; 4. Reduce the number or percentage of public sector representatives and increase the number

or percentage of private sector representatives on local workforce investment boards; 5. Improve the funding structure for local one-stop centers through a separate appropriation or

through state allocated contributions from the one stop mandatory partners; 6. Reduce and simplify all performance standards and measures; and 7. Maintain youth programs as currently constructed so that in- and out-of school youth may be

served


COMMITTEES OF JURISDICTION

U.S. House Education and Workforce Committee U.S. Senate Health, Education, Labor & Pensions (HELP) Committee

Majority: John Kline, (R-MN), Chairman Thomas E. Petri(R-WI)* Howard P. “Buck” McKeon (R-CA)* Joe Wilson (R-SC) Virginia Foxx (R-NC) * Tom Price (R-GA) Kenny Marchant (R-TX) Duncan Hunter (R-CA) David P. Roe (R-TN) Glenn Thompson (R-PA) Tim Walberg (R-MI) Matt Salmon (R-AZ)* Brett Guthrie (R-KY) * Scott DesJarlais (R-TN) Todd Rokita (R-IN) Larry Bucshon (R-IN)

Trey Gowdy (R-SC) Lou Barletta (R-PA)* Martha Roby (R-AL) Joseph J. Heck (R-NV)* Susan W. Brooks (R-IN)* Richard Hudson (R-NC)* Luke Messer (R-IN)

Majority: Tom, Harkin (D-IA) , Chairman Barbara A. Mikulski (D-MD) Patty Murray (D-WA)* Bernard Sanders (D-VT) Robert P. Casey (D-PA) Kay R. Hagan (D-NC)* Al Franken (D-MN)* Michael F. Bennet (D-MD)* Sheldon Whitehouse (D-RI)* Tammy Baldwin (D-WI) Christopher Murphy (D-CT) Elizabeth Warren (D-MA)

Minority: George Miller (D-CA), Senior Democratic Member Robert E. Andrews (D-NJ) Robert C. “Bobby” Scott (D-VA) Ruben Hinojosa (D-TX)* Carolyn McCarthy (D-NY)* John F. Tierney (D-MA)* Rush Holt (D-NJ)* Susan A. Davis (D-CA)* Raul M. Grijalva (D-AZ) Timothy H. Bishop (D-NY)* David Loebsack (D-IA)* Joe Courtney (D-CT) Marcia L. Fudge (D-OH) *Member of the U.S. House Education and Workforce Committee, Subcommittee on Higher Education and Workforce Training

Jared Polis (D-CO) Gregorio Sablan (D-MP) John Yarmuth (D-KY)* Frederica S. Wilson (D-FL) Suzanne Bonamici (D-OR)*

Minority: Lamar Alexander (R-TN), Ranking Member Michael B. Enzi (R-WY)* Richard Burr (R-NC) Johnny Isakson (R-GA)* Rand Paul (R-KY) Orrin G. Hatch (R-UT)* Pat Roberts (R-KS) Lisa Murkowski (R-AK) Mark Kirk (R-IL)* Tim Scott (R-SC) *Member of the U.S. Senate Committee on Health, Education, Labor and Pensions, Subcommittee on Employment and Workplace Safety

For further information, please contact: Deseree Gardner at 202.942.4204 or [email protected]

http://petri.house.gov/

http://mckeon.house.gov/

http://joewilson.house.gov/

http://foxx.house.gov/

http://tomprice.house.gov/

http://marchant.house.gov/

http://hunter.house.gov/

http://roe.house.gov/

http://thompson.house.gov/

http://walberg.house.gov/

http://salmon.house.gov/

http://guthrie.house.gov/

http://desjarlais.house.gov/

http://rokita.house.gov/

http://bucshon.house.gov/

http://gowdy.house.gov/

http://barletta.house.gov/

http://roby.house.gov/

http://heck.house.gov/

http://susanbrooks.house.gov/

http://hudson.house.gov/

http://messer.house.gov/



• Despite the increased demand for workforce services, federal workforce programs have seen an overall 30 percent reduction in funding since FY2001

• Last year, more than 9 million individuals received training and related services supported under Title I of WIA, an increase of nearly 250 percent in just two years

• WIA Title I Adult, Dislocated

Worker, and Youth grant programs exceeded FY2011 performance goals set by the Government Performance and Results Act (GPRA)

SUPPORT FUNDING FOR WORKFORCE DEVELOPMENT PROGRAMS ACTION NEEDED: Urge your House and Senate members to support the local workforce development system by funding Workforce Investment Act (WIA) Title I Adult, Dislocated Worker and Youth formula grant programs in the FY2013 and FY2014 appropriations process. BACKGROUND: Administered at the federal level by the Employment and Training Administration (ETA) within the U.S. Department of Labor, WIA constitutes the largest federal funding source for workforce development activities. Despite the increased demand for workforce services, federal workforce programs have seen an overall 30 percent reduction in funding since FY2001. Now, workers and businesses may face additional across-the-board cuts in workforce training under the pending sequestration process. Title I grants for adult, dislocated workers and youth provide funds for “one stop” career centers where employers and job seekers can access job preparation and job search activities, and a more limited number of job training opportunities. These funds, authorized under WIA, are allocated through formula grants to states, with a mandatory pass through to local workforce development areas. Distributed by formula, funding is determined by the relative number of unemployed individuals and disadvantaged adults and youth within a state. Nonprofit organizations can access funds by entering into agreements with local Workforce Investment Boards (WIBs) to provide core or intensive workforce services, either as a “one stop” or as part of a consortium of providers. Nonprofits may also become eligible training providers that participants can access through “individual training accounts” (ITAs). Local area adult and dislocated worker funds support three categories of services: core, intensive and training.

• Core Services – include outreach, job search and placement assistance, and labor market information. Core services are available to all jobseekers, often on a self-serve basis

• Intensive Services – include more comprehensive assessments, development of individual employment plans and counseling, and career planning

• Training Services – are targeted to unemployed individuals as well as low-income workers who require training to achieve self-sufficiency. In most cases, training must be provided through ITAs, which allow participants to select and attend their choice of training program among eligible providers

Despite growing evidence of economic recovery, according to the Bureau of Labor Statistics, 7.9 percent of Americans remain unemployed, and millions more lack the job skills or educational credentials they need to

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advance their careers. At the same time, U.S. employers are struggling to fill current job openings, in part because they are unable to find qualified, trained candidates. In a January 2011 report to Congress, the Government Accountability Office (GAO) wrote that “[f]ederally funded employment and training programs serve an important role in our society by helping job seekers to enhance their skills, identify job opportunities, and obtain employment.” This observation has been demonstrated by the substantial increase in demand for training and education during our nation’s economic recovery. Last year, more than 9 million individuals received training and related services supported under Title I of WIA, an increase of nearly 250 percent in just two years, and more than half of these individuals found employment in a tough labor market. Millions more received training and employment services through other federally supported programs—such as youth, adult education, vocational rehabilitation and veterans’ rehabilitation. Despite the increased demand for workforce services, Congress has continued to cut funding for workforce programs, and critical employment and training programs stand to lose additional funding under current proposals to reduce the federal deficit. Such cuts are already having an impact: a recent survey of workforce providers found that more than three quarters expected to reduce training as a result of reduced funding levels, and almost half anticipated cutting back on services for employers. Any further cuts to funding will seriously impact the ability of the workforce system to respond to immediate and long-term labor market demands, disrupting business growth and slowing our economic recovery efforts. While we recognize the fiscal constraints facing Congress and the Administration, we must work together to prioritize investments in the skills of the U.S. workforce. KEY TALKING POINTS:

• To ensure that our nation has the highly skilled workforce necessary to compete in the global economy, we urge you to, at a minimum, maintain funding for WIA Title I Adult, Dislocated Worker and Youth state formula grant programs at the pre-rescission FY2012 enacted level of $2.8 billion.

• WIA funds at the local level are critical so that local workforce areas can maintain programs to help the millions of workers impacted by job losses and can restore the innovative services developed in response to the business sector, whose demand for highly skilled workers continues to grow. Continued disinvestment in the workforce system is undermining the best laid plans of many counties and regions across the nation. These funds help to create and fill jobs, prepare workers whose jobs have disappeared for new careers, and train the American workforce for the demands of a 21st century global economy.

• Our nation’s businesses are struggling to find the skilled workers they need to sustain economic recovery. A recent Manpower survey found 52 percent of U.S. employers are experiencing difficulty filling critical positions within their organizations—up from only 14 percent in 2010.i

• Last year, more than 9 million individuals received training and related services supported under Title I of WIA, an increase of nearly 250 percent in just two years and more than half of these individuals found employment in a tough labor market.

• According to the Employment and Training Administration (ETA) WIA Title I Adult, Dislocated Worker, and Youth grant programs exceeded FY2011 performance goals set by the Government Performance and Results Act (GPRA).ii



U.S. House Appropriations Committee U.S. Senate Appropriations Committee

Majority: Harold Rogers (R-KY), Chairman C.W. Bill Young (R-FL) Jo Bonner (R-AL) Tom Cole (R-OK) Frank R. Wolf (R-Va.) Mario Diaz-Balart (R-FL) Jack Kingston (R-GA)* Charles Dent (R-PA) Rodney Frelinghuysen (R-NJ) Rodney Alexander (R-LA)* Tom Graves (R-GA) Tom Latham (R-IA) Kevin Yoder (R-KS) Robert B. Aderholt (R-AL) Steve Womack (R-AR)* Jaime Herrera Beutler (R-WA

Alan Nunnelee (R-MS) Kay Granger (R-TX) Jeff Fortenberry (R-NE) Michael Simpson (R-ID)* Tom Rooney (R-FL) John Abney Culberson, (R-TX) Chuck Fleischmann (R-TN)* Ander Crenshaw, (R-FL) David Valadao (R-CA) John R. Carter (R-TX) David Joyce (R-OH)* Ken Calvert (R-CA) Jaime Herrera Beutler (R-WA) John A. Culberson (R-TX) Andy Harris (R-MD)* Robert Aderholt (R-AL)

Majority: Barbara Mikulski (D-MD), Chairwoman* Patrick Leahy (D-VT) Tom Harkin (D-IA)* Patty Murray (D-WA)* Dianne Feinstein (D-CA) Richard Durbin (D-IL)* Tim Johnson (D-SD)* Mary Landrieu (D-LA)* Jack Reed (D-RI)* Frank Lautenberg (D-NJ) Mark Pryor (D-AR)* Jon Tester (D-MT)* Tom Udall (D-MT) Jeanne Shaheen (D-NM)* Jeff Merkley (D-OR)* Mark Begich (D-AK)

Minority: Nita Lowey (D-NY), Ranking Member Marcy Kaptur (D-OH) Sanford Bishop (D-GA) Pete Visclosky (D-IN) Barbara Lee (D-CA)* Bill Owens (D-NY) José Serrano (D-NY) Adam Schiff (D-CA) Rosa DeLauro (D-CT)* Michael Honda (D-CA)* *Members of the U.S. House Appropriations Subcommittee on Labor, Health and Human Services Subcommittee

James Moran (D-VA) Betty McCollum (D-MN) Ed Pastor (D-AZ) Tim Ryan (D-OH) David Price (D-NC) Debbie Wasserman- Schultz (D-FL) Lucille Roybal-Allard (D-CA)* Sam Farr (D-CA) Henry Cuellar (D-TX) Chaka Fattah (D-PA) Chellie Pingree (D-ME) Mike Quigley (D-IL)

Minority: Richard Shelby (R-AL), Vice Chairman Thad Cochran (R-MS)* Mitch McConnell (R-KY)* Richard Shelby (R-AL) Lamar Alexander (R-TN)* Susan Collins (R-ME) Lisa Murkowski (R-AK) Lindsey Graham (R-SC)* Mark Kirk (R-IL)* Dan Coats (R-IN) Roy Blunt (R-MO) Jerry Moran (R-KS)* John Hoeven (R-ND) Mike Johanns (R-NE)* John Boozman (R-AR)* *Members of the U.S. Senate Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies

For further information, please contact: Deseree Gardner at 202.942.4204 or [email protected] i “2012 Talent Shortage Survey: Research Results” Manpower Group ii “Workforce System Results: Fourth Quarter, Program Year 2011, Third Quarter, Fiscal Year 2012” U.S. Department of Labor, Employment and Training Administration (ETA)

FACTS: State and Local Bankruptcy Unintended Consequences. The mere suggestion that Congress should enact preemptive authority for states to file for bankruptcy is pernicious because of its predictable consequences. Any federal law allowing states to declare bank-ruptcy would only serve to increase interest rates, rattle investors and markets, raise the costs for state government, create more volatility and uncertainty in financial markets, and erode state sovereignty under the 10th Amendment to the U.S. Constitution.

States Versus Municipalities. The bankruptcy conversation further demonstrates a basic misunderstanding about the function and operation of state and local governments.

The mechanics of bankruptcy are inapplicable to a sovereign entity. Bank-ruptcy is not a legal option for states, as constitutionally recognized sover-eigns, because states have taxing authority and constitutional or statutory requirements to balance budgets. Alternatively, bankruptcy may be an option for some municipalities under Title IX of the federal Bankruptcy Code because municipalities are legal corporations, not sovereign entities. Eligibility for Chapter IX relief is narrowly tailored by several factors. States determine whether their municipalities, as “political subdivisions, public agencies, or instrumentalities of the state,” may pursue this option. One key eligibility fac-tor is that a municipality must be insolvent and unable to meet its obligations when they fall due.

According to Moody’s Investor Service, 21 states and the District of Columbia have not passed laws on municipal bankruptcy while 28 states either authorize or provide conditional or limited Chapter IX filings. Cur-rently, only Georgia and Puerto Rico legally prohibit municipalities from filing under Chapter IX.

Issued By:

NGA – National Governors AssociationNCSL – National Conference of State LegislaturesCSG – The Council of State GovernmentsNACo – National Association of CountiesNLC – National League of CitiesUSCM – The U.S. Conference of MayorsICMA – International City/County Management Association NASBO – National Association of State Budget OfficersNASACT – National Association of State Auditors, Comptrollers and TreasurersGFOA – Government Finance Officers AssociationNASRA – National Association of State Retirement Administrators

Facts You Should KnowState and Municipal Bankruptcy n Municipal Bonds n State and Local Pensions

2 0 1 3 F A C T S H E E T

State Actions. Long term fiscal constraints have put budgetary pressures on most states, which are required to balance their budgets annually or biennially. States have risen to this challenge by making tough spend-ing cuts and, in some cases, raising taxes, which is within their power as sovereign entities. During this time, unfunded pension and health care liabilities have also grown, due chiefly to the lower rate of return on investments and deferred annual contributions. Between 2009 and 2011, 43 states have reduced their pension plan costs, unfunded liabilities, or both, by modifying their pension plans.

Throughout this difficult period, no state contem-plated walking away from its obligations to residents or the bond markets by requesting that the federal government allow states to receive bankruptcy protection.

In 2011, NGA leadership issued a preemptive state-ment and a joint leadership letter with the NCSL that declared opposition to any congressional legislation that would permit states to file for bankruptcy protec-tion. Opposition to such legislation remains in 2013.

FACTS: Municipal BondsMunicipal securities are predominantly issued by state and local governments for governmental infrastructure and capital needs purposes. Most debt is issued not for operating budgets, but rather for capital projects that help governments pay for public projects, such as the construction or improvement of schools, streets, highways, hospitals, bridges, water and sewer systems, ports, airports and other public works.

Municipal Securities

n There are approximately 1.5 million municipal bonds outstanding, totaling $3.7 trillion, 70 percent of which are owned by individual investors.

n On average, 12,000 issuances are completed each year.

n Municipal securities are considered to be second only to Treasuries in risk level as an investment instrument.

n While most municipal securities are issued for governmental infrastructure and capital needs purposes, state and local governments and other types of government authorities may issue bonds for other purposes, which include transactions in which the proceeds are borrowed by non-profit institutions (e.g., health care and higher education) and for economic development purposes.

Federal Tax-Exemption of Municipal Securities

n Municipal securities existed prior to the formation of the federal income tax. Both when first enacted and today, the federal income tax specifically states that income from municipal bond interest is exempt from federal taxation. Additionally, many states exempt from taxation the interest earned from municipal securities when their residents purchase bonds within their state.

n Due to the reciprocal immunity principle between the federal government and state and local gov-ernments, state and local governments are prohib-ited from taxing the interest on bonds issued by the federal government.

Not All Municipal Debt and Defaults Are the Same

n Municipal debt takes two forms: (1) General Obligation, or GO Debt, that is backed by the full faith and credit (taxing power) of a general purpose government like a state, city or county, and (2) Non-GO debt that is issued by governments and special entities that is usually backed by a specific revenue source (special taxes, fees or loan repay-ments) associated with the enterprise or borrower.

n There are two types of default: (1) the more minor “technical default,” where a covenant in the bond agreement is violated, but there is no payment missed and the structure of the bond is the same, and (2) defaults where a bond payment is missed or in the rare event that debt is restructured at a loss to investors.

Defaults Are Rare

n From 1970 through 2012, there were 71 rated municipal bond defaults. Only five rated city or county governments defaulted during this period. The majority of rated defaulted bonds were issued by not-for-profit hospitals or housing project financings. (Moody’s)

n In the first nine months of 2011, municipal bond defaults were down 69 percent compared to the same period in 2010 (S&P).

n Historically, municipals have had lower average cumulative default rates than global corporates over-all and by like rating category. Between 1970 and 2012, the average 10-year default rate for Moody’s Aaa-rated municipal bonds was zero compared to a 0.48 percent default rate for Moody’s Aaa-rated

corporate bonds. Additionally, the average one-year default rate for all municipals was just 0.01 percent versus 1.61 percent for corporates, and in the double-A rating category to which the majority of municipal ratings are assigned, average cumulative default rates are much lower for municipals than for corporates with the same double-A symbol (Moody’s1).

n Except for Arkansas in 1933, no state has defaulted on its debt in the past century. It is important to note that in the 1933 Arkansas default, bondhold-ers were paid in full.

n The recovery rate of payment for governmental debt exceeds the corporate recovery rate, with a recovery rate for general obligation and tax-backed debt at 100 percent.

n Reports of a growing number of defaults in the state and local government sector are not based on facts, nor current budget estimates and economic data.

Debt Service is a Small and Well-Protected Share of State and Municipal Budgets

n Debt service is typically only about 5 percent of the general fund budgets of state and municipal governments.

n Most state and municipal governments operate under a standard practice of paying their debt service first before covering all other expenses; in some cases this is required by law or ordinance.

Bankruptcy Does Not Necessarily Mean Default

n In many municipal bankruptcies, the jurisdic-tions have not defaulted on their debt/municipal bonds and investors have been paid, includ-ing the well-publicized bankruptcy of Orange County, CA in 1994.

FACTS: State and Local Government PensionsPension dollars help the economy of every jurisdiction. Public employees live in every city and county in the nation. More than 90 percent retire in the same juris-diction where they worked. The $200 billion in annual benefits distributed from pension trusts are a critical source of economic stimulus to communities through-out the nation, and act as an economic stabilizer in difficult financial times. Recent studies have docu-

mented public retirement system pension distributions annually generate over $73.4 billion in federal tax rev-enue, more than $59.7 billion in annual state and local government tax revenue, and a total economic impact of more than $1 trillion.2

n With nearly $3 trillion set aside in pension trusts for current and future retirees, most states and cities have substantial assets to weather the economic crisis

• Public pensions are paid out over decades; state and local government retirees do not draw down their pensions all at once.

• State and local employee retirement systems do not seek federal financial assistance. One-size-fits-all federal regulation is neither needed nor warranted and would only inhibit recovery efforts at the state and local levels.

n State and local governments are taking steps to strengthen their pension reserves and have a long-term time horizon.

• Between 2009 and 2011, 43 states have made changes to benefit levels, contribution rate structures, or both; many local governments have made similar fixes to their plans.3

• While pension obligations are often backed by explicit state constitutional or statutory guar-antees, states are generally free to change any provision of their retiree health plans, includ-ing termination, as they do not carry the same legal protections. It is misleading to combine unfunded pension liabilities with unfunded retiree health benefits as an argument that a pension meltdown is impending.

n Long-term investment returns of public funds continue to exceed expectations.

• Over the last 25 years, which saw three eco-nomic recessions and four years of negative median public fund investment returns, actual public pension investment returns averaged 8.8 percent, which exceeded projections.4

• These actual returns exceed the 7.8 percent average public pension investment return assumption, as well as the average assumed rate of return used by the largest corporate pension plans.5

n Retirement systems remain a small portion of state and local government budgets.

• The portion of combined state and local govern-ment spending dedicated to retirement system

contributions is about four percent.6,7 Pensions are a trust to which public retirees and their employers contributed while they were working.

• While there are pension trusts that are fully funded with enough assets for current pension obligations, there also are legitimate concerns about the extent of underfunding, due primar-ily to the Great Recession and stock market declines. In most cases, a modest increase in contributions to take advantage of com-pounded interest, modifications to employee eligibility and benefits, or both, will be suffi-cient to remedy the underfunding problem.8

• The unprecedented number of benefit and financ-ing changes in public plans over the last few years will help to minimize any required increases. The vast majority of public employees are required to contribute a portion of their wages—typically, five to ten percent—to their state or local

pension, and these contribution rates are being raised by many state and local governments.

Endnotes1 Moody’s Investors Service, 2013.

2 Pensionomics: Measuring the Economic Impact of Defined Benefit Expenditures, National Institute on Retirement Security, March 2012.

3 State Pension Reform, 2009–2011, National Conference of State Legislatures, March 2012.

4 Median Returns for Periods Ended 09/30/2012, Callan Associates.

5 Milliman 2010 Pension Funding Study.

6 NASRA Issue Brief: Pension Plan Investment Return Assumption, August 2012.

7 The Impact of Public Pensions on State and Local Budgets, Center for Retirement Research at Boston College, Alicia H. Munnell, Jean-Pierre Aubry, and Laura Quinby, October 2010.

8 State and Local Pensions: An Overview of Funding Issues and Challenges, Center for State and Local Government Excellence, January 2013.

For More InformationNational Governors Association David Quam n (202) 624-5300, [email protected] Parkhurst n (202) 624-5300, [email protected]

National Conference of State Legislatures Bankruptcy: Susan Parnas Frederick n (202) 624-3566, [email protected] and Defaults: Michael Bird n (202) 624-8686, [email protected]

The Council of State GovernmentsChris Whatley n (202) 624-5460, [email protected]

National Association of CountiesMichael Belarmino n (202) 942-4254, [email protected]: Deseree Gardner n (202)942-4204, [email protected]

National League of CitiesBankruptcy and Bonds: Lars Etzkorn n (202) 626-3173, [email protected]: Neil Bomberg n (202) 626-3042, [email protected]

The U.S. Conference of Mayors Larry Jones n (202) 202-861-6709, [email protected]

International City/County Management AssociationElizabeth Kellar n (202) 962-3611, [email protected]

National Association of State Budget OfficersScott Pattison n (202) 624-8804, [email protected]

National Association of State Auditors, Comptrollers and TreasurersCornelia Chebinou n (202) 624-5451, [email protected]

Government Finance Officers AssociationDustin McDonald n (202) 393-8020, [email protected]

National Association of State Retirement AdministratorsJeannine Markoe Raymond n (202) 624-1417, [email protected]



• Unless Congress acts, counties will receive their last fully funded PILT disbursement in June of 2013

• The U.S. Department of the Interior

makes PILT payments to over 1,850 counties in 49 states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands

• As federal land is not taxable by local

governments, PILT provides payments to counties to offset losses in property tax revenues

• The federal government owns

roughly 635—640 million acres, 28 percent of the 2.27 billion acres of land in the United States

CONTINUE MANDATORY FUNDING FOR THE

PAYMENT IN LIEU OF TAXES (PILT) PROGRAM

ACTION NEEDED: Urge members of your congressional delegation to support continued mandatory funding for the Payment in Lieu of Taxes (PILT) program. Unless Congress acts, counties will receive their last fully funded PILT disbursement in June 2013. Without mandatory funding, PILT will revert to a discretionary program (subject to the annual appropriations process) and could go back to pre-2008 funding levels which would devastate local government service delivery in areas with significant federal ownership. BACKROUND: The PILT program was created in 1976 to offset costs incurred by counties for services provided to federal employees and families, the public and to the users of public lands. These include education, solid waste disposal, law enforcement, search and rescue, health care, environmental compliance, fire fighting, parks and recreation and other important community services. Annual PILT funding levels remained static for many years. For nearly two decades, counties watched the value of their PILT receipts drop due to inflation. In 1995, NACo was successful in securing a legislative fix for the PILT formula, (P.L. 103-397), which adjusted annual authorization levels for inflation. On July 6, 2012, President Obama signed legislation (P.L. 112-141) into law which provided mandatory funding for PILT for FY2013. Previously, the enactment of the Emergency Economic Stabilization Act (P.L. 110-343) provided full authorized funding for PILT from FY2008 through FY2012. From 1995 to 2007, PILT remained an appropriated program, which was subsequently underfunded year after year. In FY2012, the U.S. Department of the Interior made $393 million in PILT payments to over 1,850 units of local government. KEY TALKING POINTS:

• The PILT program provides payments to counties and other local governments to offset losses in tax revenues due to the presence of substantial acreage of federal land in their jurisdictions. As federal land is not taxable by local governments, public land counties have struggled historically to provide adequate services to the public in light of the annual losses in tax revenue.

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• Without additional mandatory funding, PILT will revert to a discretionary program subject to the annual appropriations process. Counties require a public commitment from the administration and Members of Congress to support long-term funding at its full authorized levels for FY2014 and beyond.

• As local governments are unable to tax the property values or products derived from federal lands, these payments are essential to support essential government services (mandated by law) such as education, first responders, transportation infrastructure, law enforcement and healthcare in over 1,850 counties in 49 states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands.

• Mandatory PILT funding provided through the Moving Ahead for Progress in the 21st Century Act (P.L. 112-141) will expire in FY2013.

• While the Senate and House of Representatives may approach legislative solutions for funding the PILT program differently, NACo will continue to urge leadership on both sides of the aisle to act in a spirit of bipartisan and bicameral cooperation and work together to move a final legislative solution to the President’s desk.


For further information, contact: Ryan Yates at 202.942.4207 or [email protected]

U.S. House Natural Resources Committee U.S. Senate Energy & Natural Resources Committee

Majority: Rep. Hastings (R-WA), Chairman Don Young (R-AK) Raul Labrador (R-ID) Louie Gohmert (R-TX) Steve Southerland II (R-FL) Rob Bishop (R-UT) Bill Flores (R-TX) Doug Lamborn (R-CO) Andy Harris (R-MD) Rob Whitman (R-VA) Jon Runyan (R-NJ) Paul Broun (R-GA) Mark Amodei (R-NV) John Fleming (R-LA) Markwayne Mullin (R-OK) Tom McClintock (R-CA) Chris Stewart (R-UT) Glenn Thompson (R-PA) Steve Daines (R-MT) Cynthia Lummis (R-WY) Kevin Cramer (R-ND) Dan Benishek (R-MI) Doug LaMalfa (R-CA) Jeff Duncan (R-SC) Scott Tipton (R-CO) Paul Gosar (R-AZ) Minority: Edward Markey (D-MA), Ranking Member Peter DeFazio (D-OR) Pedro Pierluisi (D-PR) Eni Faleomavaega (D-AS) Colleen Hanabusa (D-HI) Frank Pallone (D-NJ) Tony Cardenas (D-CA) Grace Napolitano (D-CA) Steven Horsford (D-NV) Rush Holt (D-NJ) Jared Huffman (D-CA) Raul Grijalva (D-AZ) Raul Ruiz (D-CA) Madeleine Bordallo (D-GUAM) Carol Shea-Porter (D-NH) Jim Costa (D-CA) Alan Lowenthal (D-CA) Gregorio Sablan (D-MP) Joe Garcia (D-FL) Niki Tsongas (D-MA) Matt Cartwright (D-PA)

Majority: Ron Wyden (D-OR), Chairman Tim Johnson (D-SD) Mary Landrieu (D-LA) Maria Cantwell (D-WA) Bernard Sanders (I-VT) Debbie Stabenow (D-MI) Mark Udall (D-CO) Al Franken (D-MN) Joe Manchin (D-WV) Chris Coons (D-DE) Brian Schatz (D-HI) Martin Heinrich (D-NM) Minority: Lisa Murkowski (R-AK), Ranking Member John Barrasso (R-WY) Jim Risch (R-ID) Mike Lee (R-UT) Dean Heller (R-NV) Jeff Flake (R-AZ) Tim Scott (R-SC) Lamar Alexander (R-LA) Rob Portman (R-OH) John Hoeven (R-ND)



• Unless Congress acts, the SRS payments that counties received in January 2012 will be their last

• NACo is pursuing a long-term legislative solution, based on active forest management, to continue revenue sharing payments to counties

• The SRS program was enacted in 2000 to

provide counties and schools funding to compensate for steep reductions in revenues shared with counties and schools

• In 2012, the SRS program provided $346

million to 729 rural counties, parishes and boroughs across the United States

• Historically (since 1908), the Forest

Service provided counties and schools 25 percent of the revenues collected from management activities on the National Forest System

REVENUE SHARING PAYMENTS TO FOREST COUNTIES ACTION NEEDED: Pursue long-term legislative solution for continued revenue sharing payments to forest counties. Explain to members of your Congressional delegation that the Secure Rural Schools and Community Self-Determination (SRS) Act expired in September 2012. Congress should establish a modern revenue sharing program that allocates revenues generated from the management of designated federal lands to all forest counties. BACKROUND: The SRS program provides assistance to rural counties and school districts affected by the decline in revenue from timber harvests on federal lands. Historically, rural communities and schools have relied upon a share of receipts from timber harvests to supplement local funding for education services and roads. The steep decline in timber sales during the 1980s decreased the revenues that rural school districts received from these timber sales.

In response to this decline, Congress passed P.L. 106-393 to stabilize the payments to counties and to compensate for lost revenues. In 2012, the SRS program provided approximately $346 million in funding to 729 rural counties, parishes and boroughs across the United States.

President Teddy Roosevelt developed and implemented the policy of conserving lands for multiple uses. To address this challenge, a revenue sharing plan was formulated in 1908 that specified that 25 percent of all revenues from National Forests would be returned to the counties in which they were located. During the 1980s, national policies substantially diminished the revenue-generating activity permitted in these forests. In 2000, SRS was enacted to provide assistance to rural counties and schools affected by declining revenues from timber harvests on federal lands. In October 2008, SRS was reauthorized (P.L. 110.343) and amended to continue, on a sliding payment scale, through FY2011. The Act was extended for an additional year (FY2012) with the enactment of P.L. 112-141.

The expiration of SRS in 2012 will create dramatic budgetary shortfalls if Congress fails to renew the long-standing federal obligation to county governments. The enactment of a modern revenue sharing program to allocate revenues generated from the management of designated federal lands to forest counties and schools would ensure that students receive essential education services and that rural communities have funding for roads, conservation projects, search and rescue missions, and fire prevention programs.

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KEY TALKING POINTS:

• The expiration of the Secure Rural Schools and Community Self-Determination (SRS) Act in 2012 will create dramatic budgetary shortfalls for 729 rural counties if Congress fails to renew this federal obligation to rural county governments.

• New legislation should be enacted that couples payments to counties and active natural resource management and the stability and well-being of forest counties and communities. NACo supports a forest trust model that would designate specific USFS land to be managed by the states on behalf of counties and schools according to state land management practices and federal and state laws as they apply to state land.

• While the Senate and House of Representatives may differ in their legislative solutions for future forest payments to counties, NACo will continue to urge leadership on both sides of the isle to act in a spirit of bipartisan and bicameral cooperation and work together to move a final legislative solution to the President’s desk.


For further information, contact: Ryan R. Yates at 202.942.4207 or [email protected]

U.S. House Natural Resources Committee U.S. Senate Energy & Natural Resources Committee

Majority: Rep. Hastings (R-WA), Chairman Don Young (R-AK) Raul Labrador (R-ID) Louie Gohmert (R-TX) Steve Southerland II (R-FL) Rob Bishop (R-UT) Bill Flores (R-TX) Doug Lamborn (R-CO) Andy Harris (R-MD) Rob Whitman (R-VA) Jon Runyan (R-NJ) Paul Broun (R-GA) Mark Amodei (R-NV) John Fleming (R-LA) Markwayne Mullin (R-OK) Tom McClintock (R-CA) Chris Stewart (R-UT) Glenn Thompson (R-PA) Steve Daines (R-MT) Cynthia Lummis (R-WY) Kevin Cramer (R-ND) Dan Benishek (R-MI) Doug LaMalfa (R-CA) Jeff Duncan (R-SC) Scott Tipton (R-CO) Paul Gosar (R-AZ) Minority: Edward Markey (D-MA), Ranking Member Peter DeFazio (D-OR) Pedro Pierluisi (D-PR) Eni Faleomavaega (D-AS) Colleen Hanabusa (D-HI) Frank Pallone (D-NJ) Tony Cardenas (D-CA) Grace Napolitano (D-CA) Steven Horsford (D-NV) Rush Holt (D-NJ) Jared Huffman (D-CA) Raul Grijalva (D-AZ) Raul Ruiz (D-CA) Madeleine Bordallo (D-GUAM) Carol Shea-Porter (D-NH) Jim Costa (D-CA) Alan Lowenthal (D-CA) Gregorio Sablan (D-MP) Joe Garcia (D-FL) Niki Tsongas (D-MA) Matt Cartwright (D-PA)

Majority: Ron Wyden (D-OR), Chairman Tim Johnson (D-SD) Mary Landrieu (D-LA) Maria Cantwell (D-WA) Bernard Sanders (I-VT) Debbie Stabenow (D-MI) Mark Udall (D-CO) Al Franken (D-MN) Joe Manchin (D-WV) Chris Coons (D-DE) Brian Schatz (D-HI) Martin Heinrich (D-NM) Minority: Lisa Murkowski (R-AK), Ranking Member John Barrasso (R-WY) Jim Risch (R-ID) Mike Lee (R-UT) Dean Heller (R-NV) Jeff Flake (R-AZ) Tim Scott (R-SC) Lamar Alexander (R-LA) Rob Portman (R-OH) John Hoeven (R-ND)




• The First Responder Network Authority (FirstNet) is an independent authority within the U.S. Department of Commerce’s National Telecommunications and Information Administration, charged to create a nationwide interoperable wireless broadband network

• The purpose of the network is to enable police, firefighters, emergency medical service professionals and other public safety officials to more effectively communicate during emergencies and to use cutting-edge technologies

• Congress allocated $7 billion of spectrum auction proceeds and valuable spectrum bandwidth towards deployment of the nationwide network and provided $135 million for a new State and Local Implementation Grant Program

• Involving the states, local and tribal jurisdictions early in the consultation process is critical to FirstNet’s ultimate success. These jurisdictions have a wealth of knowledge that FirstNet should leverage, including expert knowledge of specific topography and coverage issues within their state and local communities, public safety user density information and existing broadband infrastructure

• As states begin to identify existing broadband and infrastructure assets to incorporate into the new first responder network, it is imperative that counties engage in the consultation process and actively seek out the designated state coordinator(s) of those activities

IMPORTANT ROLE OF COUNTIES IN THE FIRST RESPONDER NETWORK AUTHORITY (FIRSTNET)

ACTION NEEDED: As states begin to identify existing broadband and infrastructure assets to incorporate into the new first responder network, as required by the Middle Class Tax Relief and Job Creation Act of 2012 (P. L. 112–96), it is imperative that counties engage in the consultation process and actively seek out the designated state coordinator(s) of those activities. This will ensure that existing local broadband and infrastructure assets are identified and included in the new network.

BACKGROUND: In February 2012, the U.S. Congress enacted The Middle Class Tax Relief and Job Creation Act of 2012, which mandated the creation of a nationwide interoperable wireless broadband network that will enable police, firefighters, emergency medical service professionals and other public safety officials to more effectively communicate with each other during emergencies and use new technology to improve response time, keep communities safe and save lives.

The law created the First Responder Network Authority (FirstNet), an independent authority within the U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA). Congress charged FirstNet to take “all actions necessary” to build, deploy and operate the network, in consultation with Federal, state, tribal and local public policy entities.

FirstNet will develop and operate the new broadband network, which is to be based on a single, nationwide network architecture, thus enabling first responders and public safety officials to communicate with one another within and across jurisdictions. The secure and interoperable network will also support cutting-edge applications – for example, enabling firefighters to download blueprints of burning buildings in order to plan their entry route, allowing emergency medical technicians to remotely access a victim’s medical records from an ambulance, or helping police to identify criminal suspects through facial recognition or iris scanning technologies.

FUNDING: Congress allocated $7 billion of spectrum auction proceeds and valuable spectrum bandwidth toward deployment of the nationwide network. Congress also provided $135 million for a new State and Local Implementation Grant Program administered by NTIA to support State, regional, tribal and local jurisdictions’ planning work with FirstNet to ensure the network meets their wireless public safety

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communications needs. FirstNet will also seek to leverage existing commercial and government infrastructure for the new network.

FIRSTNET GOVERNANCE: Congress directed that FirstNet be run by a 15-person Board of Directors who are responsible to make strategic decisions regarding First Net’s operations, with the Secretary of the U.S. Department of Homeland Security, the Attorney General and the Director of the U.S. Office of Management and Budget named as permanent members of the Board.

Congress charged the Secretary of Commerce to select the remaining 12 members with expertise in one or more of the following areas: knowledge and experience in public safety or emergency response; technical expertise and fluency regarding broadband communications; expertise in building, deploying and operating commercial telecommunications networks; or expertise in financing and funding telecommunications networks. The law also required the FirstNet Board to include members who have served as public safety professionals; have members who represent the collective interests of states, localities, tribes and territories; and reflect geographical and regional diversity, as well as rural and urban representation.

There are several individuals that serve on the FirstNet Board with either current or past ties to local government, including Sheriff Paul Fitzgerald (Story County, IA) who is a past president of the National Sheriffs’ Association, an affiliate member of the National Association of Counties.

The Act also required the FirstNet board to establish a standing public safety advisory committee to assist it in carrying out its duties and responsibilities. The FirstNet Board, at its inaugural meeting in September 2012, adopted a resolution designating a subgroup of the U.S. Department of Homeland Security’s SAFECOM to serve as this advisory committee.

STATE AND LOCAL CONSULTATION: The Act broadly directs FirstNet to “take all actions necessary” to ensure the building, deployment and operation of the network in consultation with Federal, State, tribal and local public safety entities. More specifically, the Act requires FirstNet to consult with regional, State, tribal and local jurisdictions about the distribution and expenditures of any amounts required to carry out the network policies that it is charged with establishing, including:

1. Construction of a core network and any radio access network build out 2. Placement of towers 3. Coverage areas of the network, whether at the regional, State, tribal or local level 4. Adequacy of hardening, security, reliability and resiliency requirements 5. Assignment of priority of local users 6. Assignment of priority and selection of entities seeking access to or use of the nationwide public safety

interoperable broadband network 7. Training needs of local users

The Act directs that this consultation should occur between FirstNet and the single officers or governmental bodies designated by each state. These coordination entities will be the coordinators for the funds distributed by NTIA’s State and Local Implementation Grant Program, which helps to support this aspect of the consultation process. The coordinators must be specifically identified in the grant applications.

Moving forward, FirstNet will need to balance its goal to develop nationwide public safety broadband network quickly against the need to conduct meaningful consultations with the regional, state, local, territorial and tribal jurisdictions. While the Act provides a basic framework for this process, it does not specify how state and local consultation should occur.

Involving the states, local and tribal jurisdictions early in the consultation process is critical to FirstNet’s ultimate success. These stakeholders will not merely be the end users and consumers of FirstNet’s services, but they can offer valuable input into the process to help ensure its success. These jurisdictions have a wealth of knowledge that FirstNet should leverage, including expert knowledge of specific topography and coverage issues within their state and local communities, public safety user density information and existing broadband infrastructure. These jurisdictions have engaged for years in large, complex government procurements and their expertise should be used in future decision making.

For further information, contact: Deborah Cox at 202.942.4286 or [email protected]



The nation’s counties play a critical role in transportation and infrastructure

maintenance and development • Counties own and maintain more

than 1.8 million miles or 44 percent of America’s public road miles

• Counties own 228,026 or 45

percent of bridges in America • Counties own or sit on governing

authorities that operate over one-third of the nation’s transit systems (including Allegheny County, PA, Hennepin County, MN, Montgomery County, MD)

• Counties own or sit on governing

authorities that operate over one-third of the nation’s airports (including Denver, Las Vegas, Miami-Dade, and Pittsburgh)

SUPPORT COUNTY SURFACE TRANSPORTATION PRIORITIES

ACTION NEEDED: Urge your members of Congress and the Administration to support county transportation priorities. Urge the Administration to implement key county supported provisions of the Moving Ahead for Progress in the 21st Century Act (P.L. 112-141) or MAP-21, the new surface transportation law for federal highway, transit and safety programs. Urge members of Congress to begin working on a new surface transportation authorization that provides long-term certainty and increases transportation infrastructure investments by raising the Federal gas tax or finding alternative sources of revenue to make the Highway Trust fund solvent. BACKGROUND: SAFETEA-LU, the federal program that funds a substantial number of county highway, bridge and transit projects, expired on September 30, 2009. After a series of short-term extensions, Congress gave final approval on June 29, 2012 to the reauthorization of the surface transportation legislation. MAP-21 is a 27-month bill that provides a slight funding increase--the federal highway program is funded at $39.699 billion for FY2013 and $40.256 for FY2014 and the transit program receives $10.584 billion in FY2013 and $10.701 billion in F20Y14. The off-system bridge program, which has provided $650 million annually to bridges not on the federal-aid system, mainly county-owned bridges, is retained. This will help address the nation’s 80,000 deficient off-system bridges. A number of proposed changes to the Metropolitan Planning Organization (MPO) planning process title, including the Senate approach which changed the process dramatically, and in some cases eliminated certain regions, were rejected and much of the current MPO planning language was continued. The population threshold for MPOs remains at 50,000 and rural local government officials receive new standing in the statewide planning process with state DOTs. A series of provisions relating to project or environmental streamlining were adopted, which if implemented correctly, should lead to a faster approval process for federally funded highway and bridge projects on county highways. There are a number of provisions relating to the broadening of categorical exclusions for those projects in the right-of-way. Another key provision included in MAP-21 is the

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exemption of any federally funded project from environmental review if the project’s total cost is less than $5 million. The Transportation Infrastructure Finance and Innovation Act (TIFIA) program provides Federal credit assistance to nationally or regionally significant surface transportation projects, including highway, transit and rail. TIFIA is increased dramatically to $750 million in FY2013 and $1 billion in FY2014. The federal transit program keeps its basic structure with some reforms. Per current law, urban areas over 200,000 cannot use funds for transit operating expenses and a Senate provision providing these communities with flexibility on this issue in times of high unemployment was not included in the final bill. Areas under 200,000 can continue to use their formula funds for operating assistance. A separate bus program is maintained, funded at a somewhat lower level and changed to a formula program. The New Starts transit program streamlines the approval process to accelerate project delivery. The Elderly and Disabled and New Freedom programs are consolidated and the rural transit formula program is maintained with a slight increase in funding. KEY ISSUES: The debate about the next surface transportation reauthorization has already begun. It is critical for county officials to describe to the Administration and members of Congress the key role of counties in the nation’s transportation system. • Funding: Urge your members of Congress to begin working on a new surface transportation

authorization that provides long term certainty and increases transportation investments by raising the Federal gas tax or finding alternative sources of revenue to make the Highway Trust Fund solvent.

• Implement Environmental/Project Streamlining: Urge the Administration to fully implement MAP 21, with a focus on environmental/project streamlining. If implemented correctly, these provisions will lead to a faster approval process for federally funded county supported highway, bridge and transit projects.

• Local Elected Officials in Statewide and Metropolitan Planning Process: As the gateway for

accessing federal surface transportation funding and decision making, it is important for local elected officials to have a clearly defined and enhanced role in the statewide and metropolitan transportation planning and programming frameworks.

• County Role in Transportation:

Counties own and maintain more than 1.8 million miles or 44 percent of America’s public road miles

Counties own 228,026 or 45 percent of bridges in America Counties own or sit on governing authorities that operate over one-third of the nation’s

transit systems (including Allegheny County, PA, Hennepin County, MN, Montgomery County, MD)

Counties own or sit on governing authorities that operate over one-third of the nation’s airports (including Denver, Las Vegas, Miami-Dade, and Pittsburgh)

For further information, contact: Bob Fogel at 202.942.4217 or [email protected]




U.S. House Transportation and Infrastructure Committee U.S. Senate Environment and Public Works Committee

Majority: Bill Shuster (R-PA), Chairman Don Young (R-AK) Thomas E. Petri (R-WI) Howard Coble (R-NC) John J. Duncan, Jr. (R-TN) John L. Mica (R-FL) Frank A. LoBiondo (R-NJ) Gary G. Miller (R-CA) Sam Graves (R-MO) Shelley Moore Capito (R-WV) Candice S. Miller (R-MI) Duncan Hunter (R-CA) Andy Harris (R-MD) Eric A. “Rick” Crawford (R-AR) Lou Barletta (R-PA) Blake Farenthold (R-TX) Larry Bucshon (R-IN)

Bob Gibbs (R-OH) Patrick Meehan (R-PA) Richard L. Hanna (R-NY) Daniel Webster (R-FL) Steve Southerland, II (R-FL) Jeff Denham (R-CA) Reid J. Ribble (R-WI) Thomas Massie (R-KY) Steve Daines (R-MT) Tom Rice (R-SC) Markwayne Mullin (R-OK) Roger Williams (R-TX) Trey Radel (R-FL) Mark Meadows (R-NC) Scott Perry (R-PA) Rodney Davis (R-IL)

Majority: Barbara Boxer (D-CA) Chairman Max Baucus (D-MT) Thomas R. Carper (D-DE) Frank R. Lautenberg (D-NJ) Benjamin L. Cardin (D-MD) Bernard Sanders (I-VT) Sheldon Whitehouse (D-RI) Tom Udall (D-NM) Jeff Merkley (D-OR) Kirsten Gillibrand (D-NY) Minority: David Vitter (R-LA), Ranking Member James M. Inhofe (R-OK) John Barrasso (R-WY) Jeff Sessions (R-AL) Mike Crapo (R-ID) Roger F. Wicker (R-MS) John Boozman (R-AR) Deb Fischer (R-NE)

U.S. Senate Banking Committee Minority: Nick Rahall (D-WV), Ranking Member Peter A. DeFazio (D-OR) Eleanor Holmes Norton (D-DC) Jerrold Nadler (D-NY) Corrine Brown (D-FL) Eddie Bernice Johnson (D-TX) Elijah E. Cummings (D-MD) Rick Larsen (D-WA) Michael E. Capuano (D-MA) Timothy H. Bishop (D-NY) Michael H. Michaud (D-ME) Grace F. Napolitano (D-CA) Daniel Lipinski (D-IL)

Timothy J. Walz (D-MN) Steve Cohen (D-TN) Albio Sires (D-NJ) Donna F. Edwards (D-MD) John Garamendi (D-CA) André Carson (D-IN) Janice Hahn (D-CA) Richard M. Nolan (D-MN) Ann Kirkpatrick (D-AZ) Dina Titus (D-NV) Sean Patrick Maloney (D-NY) Elizabeth H. Esty (D-CT) Lois Frankel (D-FL) Cheri Bustos (D-IL)

Majority: Tim Johnson (D-SD) Chairman Jack Reed (I-RI) Charles Schumer (D-NY) Robert Menendez (D-NJ Sherrod Brown (D-OH) Jon Tester (D-MT) Mark Warner (D-VA) Jeff Merkley (D-OR) Kay Hagan (D-NC) Joe Manchin III (D-WV) Elizabeth Warren (D-MA) Heidi Heitkamp (D-ND) Minority: Mike Crapo (R-ID), Ranking Member Richard Shelby (R-AL) Bob Corker (R-TN) David Vitter (R-LA) Mike Johanns (R-NE) Patrick Toomey (R-PA) Mark Kirk (R-IL) Jerry Moran (R-KS) Tom Coburn (R-OK) Dean Heller (R-NV)

Documents

2013 NACo Legislative Policy Briefs Legislative Policy... · 2013 NACo Legislative Policy Briefs ... 2013 Legislative Priorities T he members of the National Association of Counties