NARC Analysis: CARES Act

This afternoon, the House of Representatives passed The Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748) following an earlier vote this week by the Senate. The bill is intended to provide the country with $2.3 trillion of aid to counter the physical and economic effects of the COVID-19 pandemic. This legislation is the third COVID-19 bill to be developed by Congress, following the Coronavirus Preparedness and Response Supplemental Appropriations Act (H.R. 6074) and the Families First Coronavirus Response Act (H.R. 6201).

The CARES Act, the single largest economic stimulus package in American history, faced a brief challenge in the House when Representative Thomas Massie (R-KY) attempted to force a recorded roll call vote on the bill. Congressmembers from both sides of aisle traveled quickly to Washington to establish a quorum, denying Massie’s attempt and passing the legislation with a voice vote.

Following the successful House vote, the bill will now be sent to the President, who is expected to quickly sign it into law.

Below are key items from the CARES Act, including a table of top-level figures, and summaries of the legislation’s primary areas of support, including support for state and local government, transportation, individuals, and businesses.

Top Level Funding Figures (~$2.3 Trillion Total)

SUPPORT FOR STATE AND LOCAL GOVERNMENT

State & Local Government Support (New Coronavirus Relief Fund) ($150 Billion)

The legislation provides $150 billion specifically for states, tribes, territories, and some local areas. And provides $8 billion for Tribes and $3 billion for territories (including, oddly, the District of Columbia, which is normally treated as a state for such purposes). Of the remaining $139 billion, funds are distributed to each state based on the state’s population relative to the population of the nation as a whole.

Of the amount each state receives, up to 45% of funds are available to “units of local governments,” which is defined as a county, municipality, town, township, village, parish, borough, or other unit of general government below the State level with a population of 500,000 or greater. A local area would qualify to receive a portion of funding that is equivalent to the proportion the local government’s population bears to the population of the state as a whole.

SNAP, Family Services and Housing ($42 Billion)

$25 billion in additional funding will be provided for the Supplemental Nutrition Assistance Program (SNAP) and for other child nutrition programs to support states and localities in meeting growing need for food assistance as a result of coronavirus.

$4 billion in Homelessness Assistance Grants would be provided to state and local governments to address coronavirus among the homeless population. 

CDBG ($5 Billion)

The bill provides $5 billion through the Community Development Block Grant Program (CDBG) for services for senior citizens, the homeless, and public health services. This includes $2 billion distributed using the normal CDBG formula; $1 billion to states based on a formula developed by HUD for COVID-19; and $2 billion to states and localities based on a formula to be developed by HUD within 30 days.

FEMA Disaster Relief Funding ($45 Billion)

$45 billion is being provided in funding for FEMA with $25 billion going to areas with major disaster declarations, like Washington State and New York State. The remaining $15 billion will be used for all purposes allowed under the Stafford Act.

EDA Funding ($1.5 Billion)

The bill allocates $1.5 billion to the Economic Development Administration through September 30, 2022. This will help regions mitigate the local economic crisis and rebuild impacted industries such as tourism or manufacturing supply chains.

USDA-Rural Development Programs ($145.5 million)

The stimulus package provides an additional $20.5 million for the Rural Business Program under the Rural Business Cooperative Service to support loans for rural business development programs. It allocates $25 million for the Distance Learning and Telemedicine Program which helps provide broadband services to rural communities to support vital distance learning and telemedicine. The bill also provides $100 million in grants to the ReConnect pilot program to provide broadband services to rural areas to meet the Federal Communications Commission speed standards of 10 Mbps downstream and 1 Mbps upstream.

Dislocated Workers National Reserve ($345 million)

The bill provides $345 million for dislocated workers (through September 30, 2022) to prepare for and respond to layoffs resulting from the COVID-19 pandemic.

Homeless Assistance Grants ($4 billion)

The stimulus package provides $4 billion to enable state and local governments to provide effective, targeted assistance to contain the spread of COVID-19 among homeless individuals. It will also provide homelessness prevention funding for individuals and families who would otherwise become homeless because of the coronavirus pandemic.

Project-Based and Tenant-Based Rental Assistance ($2.25 billion)

The package provides $1 billion for project-based rental assistance to make up for reduced tenant payments as a result of coronavirus. $1.25 billion for tenant-based rental assistance will be provided to preserve Section 8 vouchers for seniors, the disabled, and low-income working families.

Section 202 Housing for the Elderly ($50 million)

This $50 million in funds will help maintain housing stability and services for low-income seniors.

Section 811 Housing for Persons with Disabilities ($15 million)

The bill provides $15 million to make up for reduced tenant payments as a result of the coronavirus pandemic.

SUPPORT FOR TRANSPORTATION

In total, the bill provides $114 billion for transportation-related purposes, $88 billion of which for aviation-related grants (as well as industry loans and loan guarantees). Of the remaining $26 billion, most of that goes to transit ($25 billion) and Amtrak ($1+ billion).

Transit ($25 Billion)

The bill provides $25 billion for “Transit Infrastructure Grants” to allow transit agencies to “prevent, prepare for, and respond to coronavirus.” These funds are treated as if they are provided under 49 U.S.C. 5307 (Urbanized Area Formula Grants) and 49 U.S.C. 5311 (Formula Grants for Rural Areas), but are distributed in the same proportion as the funds in fiscal year 2020 appropriations under 5307, 5311, 5337 (State of Good Repair Grants) and 5340 (Apportionments based on growing States and high density States formula factors). Funds under 5337 are added to 5307 funds and administered under 5307.

The funds will be distributed in seven days based on FY2020 apportionment formulas. The limitation on the use of funds for operating expenses in urban areas is waved. All of the funds, regardless of which program the funds come through, is for “reimbursement for operating costs to maintain service and lost revenue due to the coronavirus public health emergency, including the purchase of personal protective equipment, and paying the administrative leave of operations personnel due to reductions in service.” These additional operating funds DO NOT need to appear in a TIP, STIP, or LRTP to quality.

Finally, the funds for this section are from General Treasury Funds, not the Highway Trust Fund, and they are not subject to any limitation on obligations. Eligible projects can be funded with 100% federal funds.

Harbor Maintenance Trust Fund

The bill contain a provision that impacts new receipts into the Harbor Maintenance Trust Fund, treating these funds as mandatory spending not subject to spending caps (and therefore making the funds easier to spend; previously, these funds would require a spending offset). This provision does not affect the spending down of the current HMTF balance (which is $9 billion or so), but does prevent the balance from continuing to grow. This provision will take effect on Jan. 1, 2021 or upon passage of the next Water Resource Development Act (WRDA).

Amtrak ($1 Billion)

Just over $1 billion is provided for Amtrak, including $492 for Northeast Corridor grants and $526 million for National Network grants. Reduces required payment from states for “State-Supported Routes” and sets aside $239 million from National Network grants in lieu of an increase in a state’s payment.

Aviation ($42 Billion [Excluding Loans & Loan Guarantees])

Much of the transportation-related funding in the bill is provided for aviation purposes, including $32 billion in direct grants, $46 billion for loans and loan guarantees (out of the $500 billion loan and loan guarantees program), $10 billion for airport grants, and suspension of collection of Airport and Airway Trust Fund excise taxes for the remainder of the calendar year. In addition, an additional $56 million is provided for Essential Air Service.

General Highway Provision

The bill temporarily allows truck weight limits on the Interstate system to be exceeded for trucks carrying emergency supplies, to be in place through September 30, 2020 so long as the disaster declaration remains in effect.

SUPPORT FOR INDIVIDUALS

Unemployment Benefits ($260 Billion)

The bill changes unemployment insurance benefits in several dramatic ways. The bill provides unemployed workers with their basic state unemployment benefits (about $300 per week) plus a federal supplement of $600 per week for up to four months. The bill also extends state benefits for 13 weeks.  This results in up to 39 weeks of benefits for many workers. In addition, the bill provides incentives for states to waive their waiting periods, and makes unemployment compensation available to part-time, self-employed, and gig workers as well.

Notably, this bill does not contain an amendment which was requested by many local government partners to remove a provision that requires states, local governments and their political subdivisions and instrumentalities to provide paid sick leave, while prohibiting these governmental entities from receiving the tax credits available to private employers.

Stimulus Checks ($290 Billion)

Checks will be sent to Americans in amounts of $1,200 per adult and $500 per child. Check eligibility will be phased out above $75,000 of income for individuals and $150,000 of income for couples.

Tax Reductions for Individuals ($20 Billion)

The bill would provide several tax reduction avenues for individuals including allowing HSA purchases of menstrual Products and temporarily waiving retirement minimum distribution rules.

SUPPORT FOR EDUCATION SYSTEMS

Education Spending ($32 billion)

An education stabilization fund for states, school districts, & higher education institutions will be provided $31 billion. Other Department of Education programs will receive approximately another $1 billion in funding.

SUPPORT FOR HEALTH SYSTEMS

Hospitals and Health Care ($180 Billion)

$100 billion of funding in the bill is being put toward hospitals responding to COVID-19. Other funding will go to drug access; CDC, FDA, NIH, IHS, & other health-related agencies; care for veterans; and the replenishing of the nation’s stockpile of medical supplies.

SUPPORT FOR BUSINESSES

Small Business Support ($377 Billion)

Small business funding will be provided in three ways:

$10 billion of funding is being provided for Economic Injury Disaster Loans (EIDL) for grants up to $10,000 to cover immediate operating costs for businesses.

$350 billion is allocated for the Small Business Administration (SBA) to provide loans of up to $10 million per business. Use of that money is flexible as long as businesses keep their workers employed through the end of June.

Lastly, $17 billion will be for the SBA to cover 6 months of payments for small businesses with existing SBA loans.

Large Business Support ($510 Billion)

A large portion of the bill will be used to provide loans and loan guarantees for large companies, particularly for those industries hardest hit by COVID-19 such as airlines.

Tax Reductions for Businesses ($280 Billion)

The bill would loosen caps imposed by the Tax Cuts & Jobs Act on interest deductibility & operating losses, provide payroll tax credits for businesses who retain workers at a loss, and delay employer payroll tax payments from 2020 to 2021 & 2022       $12. The bill would also introduce a very COVID-19-specific provision allowing liquor distillers to make hand sanitizer tax-free.        

FURTHER READING

For more information on the CARES Act check out these other resources:

NARC Presents 2019 Regional Leadership and Excellence Awards

The National Association of Regional Councils (NARC) presented its 2019 Achievement and Leadership Awards at its 53rd Annual Conference and Exhibition in Omaha, this Tuesday evening.

“It is such a great honor to be able to recognize the valuable contributions of my colleagues …We know that this work can be slow, frustrating and challenging at times, but we also know how valuable it is to our communities and how rewarding it can be.” said NARC President ­Geof Benson during his remarks at the dinner.

ACHIEVEMENT AWARDS

MAJOR METRO ACHIEVEMENT AWARD

Triangle J Council of Governments Nation Council of Governments

Innovation Sandbox Challenge

Triangle J Council of Government’s (TJCOG) Innovation Sandbox Challenge began in 2018 as a response to the need for more innovative, flexible, and responsive projects on behalf of their member governments on issues that arose suddenly or became too challenging for localities to tackle on their own. It focuses on public sector challenges and provides a safe space outside of any single local government for experimentation. Every other year, TJCOG staff will lead research, facilitate conversations, and manage workstreams to identify and implement unique approaches and solutions on a regional scale for challenges selected by stakeholders of the COG. The success and regional interest of the Sandbox Challenge continues to grow as partner organizations and member governments actively look to future “calls for challenges” as an avenue for advancing solutions to issues they are facing in their local communities.

Alamo Area Council of Governments

TXServes – San Antonio

In 2017, Alamo Area Council of Governments (AACOG) opened the first AmericaServes Coordination Center in Texas, TXServes-San Antonio, to provide unequaled access to the very best and most comprehensive network of services, resources, and care designed exclusively for military service members, veterans, and their families within the region. In 18 months of operation, AACOG has received over 4,000 requests for services and have 91 service provider partners in their network. Compared to other networks across the country, TXServes-San Antonio is operating at a larger scale while maintaining their timeliness in serving clients. It was recently recognized as the Regional Practice Champion by the Institute for Veterans and Military Families and in a recent report from the Governor’s Committee to Support the Military.

Northeast Ohio Areawide Coordinating Agency

Signal Timing Optimization Program (STOP)

Northeast Ohio Areawide Coordinating Agency (NOACA) has studied various roadways to find that outdated and inefficient signal timing has caused unnecessary delays and congestion in several major corridors situated in our busiest workforce areas. Their Signal Timing Optimization Program (STOP) is a regional collaboration pilot program between NOACA, local government and the state department of transportation to improve corridors by optimizing traffic signals. The program has become a recognized solution in the NOACA metropolitan area that has shown reduction in emissions, fuel and delay savings along with benefit cost ratios. NOACA has met much success, as STOP was implemented in four distinct regional districts under the pilot program.

MEDIUM METRO ACHIEVEMENT AWARD

Eastgate Regional Council of Governments

Youngstown SMART Squared Network

Eastgate Regional Council of Governments’ Youngstown SMART Squared Network will connect Strategic & Sustainable, Medical & Manufacturing, Academic & Arts, Residential & Recreational, and Technology & Training centers in the heart of Eastern Ohio Appalachia’s largest metropolitan area – the City of Youngstown. The network will enhance mobility, improve safety, and integrate technology into a modern and efficient multimodal transportation system in Downtown Youngstown that is responsive and adaptive to the needs of current and future users. Eastgate is the proud recipient of a recent $10.8 million BUILD grant to fill the funding gap to complete this comprehensive effort. The SMART Squared Network project is a clear demonstration of the collaboration and trust amongst the community anchor institutions, city residents, and local and state governments.

Treasure Coast Regional Planning Council,

South Florida Regional Planning Council, and

South Florida Regional Transportation Authority

Transit Oriented Development Education and Outreach Program

Treasure Coast Regional Planning Council’s Transit Oriented Development Education and Outreach Program provided a collaborative, multi-agency effort to improve mobility, access, ridership, and land development potential for the Tri-Rail Commuter Rail Corridor in Southeast Florida. An extensive outreach program engaging local governments and stakeholder agencies expanded the understanding of Transit Oriented Development in the region. A regional Idea Exchange Network emerged through regional workshop discussions to help facilitate adoption of Transit Oriented Development policies and codes and approval of projects. The program established a more collaborative relationship between local government, MPOs, FDOT, RPCs, and the SFRTA as a resource and development partner for station-area land development and infrastructure investments.

Treasure Coast Regional Planning Council

The Transit Oriented Development Education and Outreach Program created by Treasure Coast Regional Planning Council, South Florida Regional Planning Council, and South Florida Regional Transportation Authority provided a collaborative, multi-agency effort to improve mobility, access, ridership, and land development potential for the Tri-Rail Commuter Rail Corridor in Southeast Florida. An extensive outreach program engaging local governments and stakeholder agencies expanded the understanding of Transit Oriented Development in the region. A regional Idea Exchange Network emerged through regional workshop discussions to help facilitate adoption of Transit Oriented Development policies and codes and approval of projects. The program established a more collaborative relationship between local government, MPOs, FDOT, RPCs, and the SFRTA as a resource and development partner for station-area land development and infrastructure investments.

RURAL ACHIEVEMENT AWARD

Green River Area Development District

Reducing Food Waste and Helping Homebound Seniors

A regional hospital approached the Green River Area Development District (GRADD) with a problem: they discard 300-500 meals a week, and want to find a way to assist the older adults in the region while reducing their food waste. Meanwhile, the Senior Community Center of Owensboro Daviess County makes food deliveries to homebound seniors Monday through Friday, but not during the evenings or on weekends. GRADD connected these organizations, providing technical assistance and encouragement to help them work together to provide frozen meals for homebound seniors. To date, the program has helped provide 8,542 frozen meals to homebound clients to provide evening and weekend meals. There are about 60-90 seniors receiving two frozen meals every weekend. The program has been so successful, the Kentucky Department of Aging and Independent Living are currently working with GRADD to find a way to replicate the program statewide.

LEADERSHIP AWARD

2019 WALTER SCHEIBER LEADERSHIP AWARD

Tim Brennan

Executive Director, Pioneer Valley Planning Commission

Tim Brennan has led the Pioneer Valley Planning Commission (PVPC) for nearly 4 decades, serving 43 cities and towns in western Massachusetts. He began his career with PVPC as an intern, working his way up to eventually take on the role as executive director in 1981. One of his first accomplishments was helping to modernize and grow the Pioneer Valley Transit Authority. More recently, PVPC played a critical role in the launch of high-speed passenger rail service in 2014. Under his leadership, PVPC has helped launch an electric bike-sharing program called the ValleyBike, craft community development plans for numerous communities, assist organizations that deal with domestic violence, and work hand-in-hand with membership communities to clean up the Connecticut River.

“I am extraordinarily proud of my staff and my board who have supported me for 40 plus years …and I am grateful for all of you and to have served with all of you. Keep up the good work” said Tim Brennan, in his remarks following acceptance of the award.

Information about NARC awards, conferences, and leadership can be found at www.NARC.org.

2018 End of Year Summary

In 2018, NARC advocated on your behalf on Capitol Hill and with the Administration, fostered innovative partnerships between members and with national organizations, and highlighted your daily successes. With active support from members like you, NARC has fostered better connections between members, increased our programming, and expanded our scope throughout the country.

The political landscape is more divided than ever, but NARC will continue to bridge divides with a regional perspective in 2019. The coming year will be another important opportunity to expand the role of regions in transportation, infrastructure, environment, public safety, and human services.

As we prepare for what lies ahead, we took a look back at a few of NARC’s many successes in 2018, successes that were only possible as a result of your generous and ongoing support.

Federal Advocacy
NARC continued to engage and connect with congressional staff as the go-to organization to address concerns that cross jurisdictional boundaries. NARC established relationships with federal agencies and acted as a resource on issues ranging from alternative fuel vehicles to broadband. NARC held a series of summer legislative briefings to keep you up to date on federal issues, including automated vehicles, the Farm Bill, the Federal Communications Commission, and integrated planning.

Rural Economic Development Innovation (REDI) Program
Emphasizing partnerships and innovation, NARC collaborated with the National Association of Counties Research Foundation (NACo) on a USDA grant supporting rural economic development. In October, NARC and NACo were awarded $139,000 to implement economic development plans and projects. We will steward applicants through capacity-building workshops, mentorships, and webinars.

Fleets for the Future
In 2018, NARC wrapped up our Department of Energy-funded Fleets for the Future (F4F) project. F4F harbored many successes in its 2.5 years, including the creation of best practices guides and templates for alternative fuel vehicle procurement and the development of several regional and national cooperative procurement contracts. Read more about the project and its accomplishments in our condensed F4F Final Report.

Membership Committee
This year, NARC established a membership committee to recruit new members and improve engagement with current members. This member-driven committee encouraged new regional voices to share their ideas, challenges, and best practices amongst the NARC membership. Since the committee was formed, at least eight regional councils have become NARC members.

Major Metros Roundtable
NARC continued to work with the Major Metros Roundtable (MMR), a member-directed and member-supported group that meets regularly to discuss challenges and solutions that are particular to regional councils in the nation’s largest metropolitan areas. In 2018, MMR held three in-person half-day meetings in conjunction with NARC’s three conferences in addition to monthly hour-long conference calls which highlighted an individual issue on each call – including transportation, public safety, resiliency, and more.

Sharing Best Practices
To highlight your groundbreaking work, NARC featured best practices, innovations, and creative solutions during our three conferences, in our weekly newsletters, and through monthly webinars. NARC continued to update the repository of best practices from the Rapid-Fire Innovation session at the Executive Directors Conference. Transportation Thursdays and eRegions provided updates on regional council activities and accomplishments across the country. Our webinars and conferences invited members to share their work firsthand and encouraged others to ask questions and bring these ideas back to their own regions.

2018 NARC Achievement Awards Winners

At every Annual Conference and Exhibition, NARC celebrates membership achievements of regional excellence and cooperation across the nation. This year’s winners exemplify many qualities that a 21st-century regional council needs to be successful, including innovation, adaptability, collaboration, and hard work. Read more about our 2018 NARC Major Metro, Medium Metro, and Rural Achievement Awards Winners below:

Major Metro Winner: Southeast Michigan Council of Governments (SEMCOG)
Headquarters: Detroit, Michigan
Project: Water Resources Plan

The Southeast Michigan Council of Governments (SEMCOG) won the 2018 Major Metro Achievement Award for their Water Resources Plan. The plan focuses on three major pillars of water planning in the region: “Blue Economy,” Natural Resources, and Infrastructure. “Blue Economy” recognizes the importance of the region’s water assets and supports water placemaking efforts to enhance water recreation opportunities and support the economic development of water-dependent industries. The Natural Resources pillar highlights threats to natural resources such as invasive species and prioritizes strategies to eliminate them, as well as protect wetlands, riparian corridors, and aquatic habitats. Finally, the Infrastructure pillar addresses the region’s drinking water, wastewater, storm water, dams, and transportation infrastructure.

The plan’s breadth and depth make it a very useful part of the region’s toolkit for addressing water infrastructure needs. It outlines specific policy recommendations and actions related to protecting water resources in Southeast Michigan, many of which will be incorporated into SEMCOG’s planning efforts, like their 2045 Regional Transportation Plan. Implementation of the innovative Water Resources Plan is already underway through several projects. Looking forward, SEMCOG will work with the state to map and inventory all existing and historical wetlands, helping inform decisions made about wetland restoration and protection. Congratulations to SEMCOG on their excellent Water Resources Plan!

Medium Metro Winner: Indian Nations Council of Governments (INCOG)
Headquarters: Tulsa, Oklahoma
Project: Regional Advocacy Program

INCOG’s 2018 Medium Metro Achievement Award-winning advocacy program exemplifies regional cooperation and proves that unifying a regional message is more effective than individual efforts to pass legislation. This INCOG program is unique in its four-pronged approach to regional advocacy:

  • Hosting the Coalition of Tulsa Area Governments (CTAC), an active group of county and municipal governments who advocate for issues that directly affect their member governments;
  • Developing an annual federal policy issue agenda that identifies issues important to the region, which then informs the development of their Congressional Delegation Information Packet and conversations with Oklahoma’s federal representatives;
  • Holding an annual reception and orientation meetings to start building relationships with newly-elected state and federal officials; and
  • Working through their OneVoice Legislative Program with the Tulsa Regional Chamber to develop an annual state and federal legislative agenda embraced by public and private partners alike.

Since 2000, more than 65 CTAC bills have been signed by the governor, with countless more bills killed that harm local governments. CTAC’s slate of issues require unanimous support from all members to initiate or oppose a legislative change, creating an expectation that disagreements will be resolved in favor of the larger group and the greater good. The OneVoice agenda is also a product of more than 400 individuals – which 70 organizations, including INCOG, routinely endorse – that governors and legislators find invaluable as an indication of regional consensus on significant legislative issues. Congratulations to INCOG on their inspiring Regional Advocacy Program!

Medium Metro Winner: Northwestern Indiana Regional Planning Commission (NIRPC)
Headquarters: Portage, Indiana
Project: Greenways + Blueways 2020 Plan

NIRPC’s Greenways + Blueways 2020 Plan, which won them the Medium Metro Achievement Award, highlights the benefits and relationships of both environmental and non-motorized transportation planning through three main topics: conservation, recreation, and transportation. The plan is the product of a significant public engagement process and cooperation among governmental, advocate, and corporate stakeholders. It merges typically distinct planning focus areas to highlight opportunities for integration. The plan identifies conservation corridors along waterways and large but fragmented patches of conservation land, and highlights over 160 miles of land-based, multi-use recreation trails across the Northwest Indiana landscape. The plan includes a chapter on merging these focus areas and a chapter on implementation that identifies performance measures and outlines eight stakeholder groups that can help put them into practice. The Greenways + Blueways Plan is an ambitious vision for tying together mutually beneficial focus areas to advance regional priorities of conservation and non-motorized transportation planning. Congratulations to NIRPC on their impressive G&B 2020 Plan!

Rural Achievement Award Winner: Heartland Regional Transportation Planning Organization (HRTPO) Headquarters: Bartow, Florida
Project: Highlands Transit Plan

HRTPO developed the Highlands Transit Plan through a collaborative planning process, engaging thousands of citizens over a 10-month study period and winning them the 2018 Rural Achievement Award. It is the first adopted transit development plan for Highlands County, Florida, which has no existing public transit system. Because of its successful campaign, HRTPO can confidently use their results to inform their strategic vision, which will guide the planning, development, and implementation of future public transportation services.

HRTPO used several approaches to gather feedback from their residents on their plan. Rather than focusing on public meetings, they placed an emphasis on education and participation where they knew people were – online, at work, civic activities, and community events. An informal “street team” of volunteers distributed surveys to their neighbors, co-workers, church members, and friends to help expand their reach, resulting in the collection of over 900 survey responses. The first public involvement phase identified the community’s public transportation and potential service options by conducting 27 stakeholder interviews, collecting 771 transportation needs survey responses, putting out a PSA on a Spanish language radio station, producing a one-hour segment on local talk radio, and hosting a booth at the Highlands County Fair for 10 days. Outreach strategies for the second phase, proposing service options for public input and prioritization, included: 100+ engagements at the Blueberry Festival, 156 service options surveys collected, two newspaper articles on plan development, and 20 attendees at a transit forum. Congratulations to HRTPO on their impressive outreach efforts that informed their Highlands Transit Plan!

Why the SALT Deduction Matters. Why You Should Save It.

Now is the time to let your senators and representatives know that you oppose elimination of the SALT deduction and that they should vote against any tax proposal that would do this.

Over the next weeks and months, Congress will be debating legislation to “reform” the nation’s tax system. That debate will focus on many things, including corporate taxes, inheritance tax, individual tax brackets, and charitable tax deductions, among others. But none of the debates may prove as important to states, counties, cities, and towns as the state and local tax (SALT) deduction, which allows individuals and households to deduct what they pay to states and localities in the form of income, property, and sales taxes from their federal returns. Both the House and Senate are prepared to eliminate some or all of the SALT deduction to make up for revenue losses resulting from proposed cuts to the corporate and individual tax rates.

Why does this matter? 

The Tax Policy Center estimates that 30 percent of taxpaying households – about 39 million — take the SALT deduction each year. 

These taxes are equally important to the states and localities that collect them. With these funds states and local governments can pay for the services we want and demand, and often take for granted.

These taxes are important to the federal government.

Four hundred twenty-five billion dollars of the $2.3 trillion that is collected by states and localities each year from taxpayers and the federal government is spent on infrastructure – roads, bridges, water treatment plants, and critical buildings like schools and hospitals, to name just a few.[1]

These investments by state and local governments are so significant that overall, the federal government contributes only 23 percent of all the funds spent on infrastructure. Without these state and local funds, the cost to the federal government of building and maintaining our infrastructure would be considerably greater.

According to the National Association of Counties (NACo), state and local governments deploy revenues from state and local property, income, and sales taxes to finance . . . local law enforcement, emergency services, education, and many other services[2] in addition to those used for infrastructure.

Without these funds millions of miles of roads and bridges, mass transit systems, schools, libraries, hospitals, and nursing homes would not be built. Residents might not have access to the goods and services that they currently do, because the resources needed to pay for these services might not exist.

The deduction also reflects the historic belief that individuals should not be taxed twice – at the state and local level and again at the federal level. Moreover, it would shift the intergovernmental balance of taxation and limit state and local control of our tax system, according to NACo.

But now that deduction is under attack. House and Senate Republicans have incorporated into their budget blueprints a plan to eliminate some or all of the SALT deduction, something that could have devastating impacts on states, counties, cities, and the residents who live there.

Eliminating the state and local tax deduction would subject a larger share of taxpayers’ itemized income to federal taxation by adding back in the local taxes already paid as taxable income. It would also put acute pressure on state and local governments to reduce their taxes dramatically. New York Governor Andrew Cuomo said that if the SALT deduction is eliminated New York State “will be destroyed” because of that pressure on the state and local governments to reduce or eliminate some taxes. Other high tax states like California and New Jersey will feel the same pressure to reduce taxes from their state and local taxpayers, potentially cutting off major sources of revenue.

Here are the facts[3]

SALT benefits the middle class.

Nearly 87 percent of taxpayers who claim the SALT deduction have an adjusted gross income (AGI) under $200,000.

Taxpayers in all 50 states – in both Democratic and Republican congressional districts – claim SALT. Of the top 20 highest-SALT congressional districts, 45 percent have Republican representatives.

If Congress eliminates SALT, middle class homeowners will see their taxes increase. Homeowners that make between $50,000 and $200,000 would see an average tax increase of $815 – even if the standard deduction is doubled.

More facts

States and localities generally raise about $2.3 trillion in taxes each year. Of that, $425 billion are used to help pay for roads, transit, education, and public infrastructure. If states and localities reduce their revenue collection and infrastructure spending, the state of America’s crumbling infrastructure would likely get much worse.

State and local taxes pay for a wide range of important services beyond those previously mentioned – they also pay for higher education, public welfare, and public safety.

What does this mean?

If states and localities are forced to reduce their taxes, many community services will be reduced or eliminated. Above all, families and individuals across the nation will be likely to experience diminished quality of life.

What can I do?

As efforts to reform the nation’s tax system gain steam, so too must efforts to preserve this vital deduction – the state and local tax deduction.

Now is the time for elected officials and those that value good government to tell their senators and representatives that eliminating the SALT deduction may lead to significant, long-term damage in our communities – and ultimately, states, counties and cities will bare that responsibility.

Contact your senator and representative to tell them that while it may be the time for tax reform, it is not the time to eliminate the SALT deduction. For more information see GFOA’s report on revenue losses by congressional district and the Big 7’s Americans Against Double Taxation.

[1] http://www.taxpolicycenter.org/briefing-book/what-breakdown-tax-revenues-among-federal-state-and-local-governments
[2] www.naco.org
[3] http://www.americansagainstdoubletaxation.org