March 10, 2018

Washington, D.C.

Michael Wallace

Wallace@nlc.org

Community and Economic Development Advocacy Committee Meeting

Recapping 2017

• Budget and Appropriations

• Tax Reform

FY18 Budget

Continuing Resolution• Congress rejects White House’s original proposal to cut

$54B in federal investment to cities

• Federal government operating on a continuing resolution (CR) since October 1, 2017

• Current iteration expires March 23

• Extends the National Flood Insurance Program (NFIP) until March 23

• Spending caps lifted via recent Budget Resolution passage, clearing one obstacle to a spending package

Learn more at www.nlc.org/FY18budget

FY19 Budget“The Bipartisan Budget Act of 2018”

• Preempted the cuts sought in White House’s FY19 Budget Proposal

• Raises total federal spending by $300B

• Non-defense: Up $63B in FY18 and $68B in FY19

• Defense: Up $80B in FY18 and $85B in FY19

• Suspends the debt ceiling until March 1, 2019

• Extends Children’s Health Insurance Program (CHIP) for the next 10 years

• Includes $20B over 2 years for infrastructure

Learn more at www.nlc.org/FY19budget

Tax Reform — Where We LandedPriority House Version Senate Version Conference ReportExemption for Interest Earned on Publicly Issued Municipal Bonds

- Preserved - Preserved - Preserved

Exemption for Interest Earned on Qualified Private Activity Bonds

- Eliminated - Preserved - Preserved

Exemption for Interest Earned on Advance Refunding Bonds

- Eliminated - Eliminated - Eliminated

Fully Restore Deduction for Local Property Taxes

- Capped at $10k - Capped at $10k - Deduction for property taxes combined with either income or sales taxes capped at $10kFully Restore Deductions for Local

Sales and Income Taxes- Eliminated - Eliminated

Preserve Historic Tax Credit (HTC) - Eliminated - 20% credit for qualified buildings maintained; 10% credit for pre-1936 buildings eliminated

- Sided with Senate provision

Preserve New Markets Tax Credit (NMTC)

- Eliminated - Preserved (until reauthorization)

- Preserved (until reauthorization)

Maintain exemptions for state and local public pension plans

- Subjects certain local investments to UBIT (sec. 5001 of H.R. 1)

- Maintains UBIT exemptions - Sided with Senate provision

Learn more at www.nlc.org/TaxReform

What We are Seeing at the Federal Level

• Political Landscape• Retirements / Exiting Incumbents

• Election Year

• Fewer Legislative Days

• Budget and Appropriations• Spending Limits / Deficit

• Infrastructure

• Top Issues for Congressional Action • Immigration

• Gun Violence

Setting the Stage for 2018

Main Priorities

• Infrastructure

• Telecommunications

• Disaster Mitigation & Recovery

• Future of Work / Workforce

• Opioids

• Housing

The White House Infrastructure Proposal

Key Components• Infrastructure Incentives Program

• Rural Infrastructure Grants

• Transformative Projects

• Changes to Existing Financing Programs (WIFIA / TIFIA)

• Streamlining Permitting

Other Components• Commercialization of Interstate Rest Areas

• Expanding Private Activity Bonds

• Water Infrastructure

• Workforce and Education

Congressional Action on Infrastructure

Jan

uar

y Senate and House leaders hold

Camp David press conference with the

President stating infrastructure is a

priority

President Trump tells Congress they’ll get his plan soon during

the State of the Union

Feb

ruar

y Senate and House announce they’ve

reached a two-year spending deal with

$20B for infrastructure over

two years

Congress receives the President’s

infrastructure plan

Mar

ch

Senate and House begin hearings with Secretary Chao and

others on an infrastructure bill

Appropriators begin to identify programs for placing the initial

$10B for FY18

Congressional Action on Infrastructure

Water• Water Resources Development Act

• Integrated planning

• Water workforce legislation

Brownfields Reauthorization

FAA Extension and Reauthorization

Commerce • Autonomous Vehicles

• Broadband Spectrum

Rebuild With Us

Our Guiding Principles▪ Sustainable Investment

▪ Locally-Driven Projects

▪ Federal-Local Partnership

▪ Expand Revenue Tools

▪ Rebuild and Reimagine

Focus Areas▪ Water

▪ Broadband

▪ Workforce

▪ Transportation Learn More at www.nlc.org/Infrastructure

Economic Growth, Regulatory Relief and Consumer Protection Act

Key Components for Cities• Right-sizes regulation for smaller financial institutions

• Raise the threshold for stricter oversight from $50 B to $250 B in assets

Other Components• Co-sponsored by 13 Republicans, 12 Democrats and 1

Independent

• Community banks and credit unions support

Federal Housing Agenda

Key Considerations

• Affordable Housing & Workforce Housing

• Losing affordable housing units to market-rate

• Loss of Value for LIHTC

• Rising housing values and falling rental subsidies

• Limited local authority