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May 12, 2014

RE: FEDERAL UPDATE (Seven Issues)
I. Marketplace Equity
II. Transportation Funding
III. CDBG Funding
IV. Greenhouse Gas Rules
V. Clean Water Act Rules
VI. FCC E-Rate Rules
VII. National Infrastructure Week Resources

Dear Mayor

Thanks again to the staff of the National League of Cities (NLC) for their work on the following important municipal issues and for doing their best to keep us informed of critical developments in our Nation’s Capital.

I. SALES TAX EQUITY MEASURE STALLED IN HOUSE

One year ago, the Senate passed the Marketplace Fairness Act (S.743), a bill which would level the sales tax playing field for online and “bricks and mortar” retailers by requiring internet merchants  to collect sales taxes on online purchases. The Senate passed the bill 69-27 last year. It is estimated that the absence of this requirement costs $23 billion in lost sales tax revenues for state and local governments, all across the Nation.

While, with limited exceptions, New Jersey municipalities do not benefit from sales taxes, sales tax revenues play a big part in everything the State of New Jersey does, or tries to do. Everything from youth and family services to environmental protection to transportation to social services to corrections to parks and recreation to health to education to support for our family farmers to tourism and economic development – all of these are only possible because of the resources the State collects, through the sales tax.

The rapid growth of internet commerce threatens these revenues in two ways. Obviously the first is that it puts a large and continually increasing number of purchases beyond the easy reach of the State Division of Taxation. While the purchaser should remit the tax directly to the State, enforcement of that requirement is almost impossible.

But the second threat is, potentially, much more devastating. It gives electronic merchants a competitive advantage over those who maintain a physical presence in the community. Current policy encourages people to spend more on the internet and, consequently, less on Main Street or in our suburban Malls.

Merchants who maintain a physical presence in our communities not only pay property taxes, which are used to pave and police our roads, to build and staff our schools and libraries, and to secure and preserve our parks and recreational facilities. They also employ our fellow citizens, who, in turn, pay income taxes, and who buy homes and pay their own property taxes. But that is just the start of how our hometown merchants contribute to the community. They contribute to local charities, sponsor youth sports teams and, in a thousand other ways, they give life to the communities that contribute to their prosperity.

Please contact your Congressman to request his support for Marketplace Fairness.

II. TRANSPORTATION FUNDING DEBATES PICKING UP STEAM

Washington moved the conversation on reauthorization of federal surface transportation programs into a higher gear this week as U.S. Department of Transportation (DOT) Secretary Anthony Foxx notified State transportation officials that the impending shortfall of transportation funds is real. Transportation programs expire on September 30, but funding from federal gas tax revenues is anticipated to run out by August.

Besides the Secretary's warning, two Senate Committees held hearings on transportation, and Senate Environment and Public Works Committee Chair Barbara Boxer announced that the "big four" bipartisan leadership of the Committee would introduce a bill today, May 12, and mark it up on Thursday, May 15.

In his testimony before the Senate Commerce Committee - one of four in the Senate with jurisdiction over transportation programs – Secretary Foxx highlighted provisions in the Administration recently introduced proposal, the GROW AMERICA Act. With increased funding for transit programs, new efforts to streamline the regulatory process to cut red tape involved in federally funded projects, funding for Transportation Infrastructure Finance and Innovation Act (TIFIA) credit programs and the Transportation Investment Generating Economic Recovery ( TIGER) grant program, bringing passenger rail programs, the emphasis on coordination of freight plans, focus on rural efforts and other initiatives, this $302 billion, four-year proposal with many NLC priorities for a new program.

As the debate gets underway, NLC will continue to advocate for a long term, multimodal transportation reauthorization program that requires local input in the project selection process.

We will keep you posted as the debate continues.

III. HOUSE APPROPRIATIONS COMMITTEE SUPPORTS CDBG FUNDING

Last Wednesday, the House Appropriations Committee gave initial approval to the $52 billion FY 2015 spending bill for the Departments of Transportation and Housing and Urban Development (THUD). In sharp contrast to last year's appropriations process, this year's bill calls for essentially level funding for the Community Development Block Grant Program (CDBG) at $3 billion. Last year, the House considered a bill that would have cut funding for CDBG in half, to $1.6 billion but eventually agreed to reinstate CDBG funding.

Among other local priorities, funding for homeless assistance would be maintained at $2.1 billion and include 10,000 new vouchers for supportive housing for homeless veterans. Funding for Housing Choice Vouchers would be increased slightly to renew existing housing vouchers but not enough to restore any of the 40,000 vouchers cut as a result of sequestration. The HOME Investment Partnership (HOME) program would not fare as well, with a proposed cut of $300 million from last year's level of $1 billion.

On the transportation side, the bill provides nearly $40.25 billion from the Highway Trust Fund to be spent on the federal highway program, which is equal to this year's level. However, the funding is contingent on the enactment of a new transportation program since the current expires on September 30. Compared to this year's levels, among other cuts, the bill cuts $200 million for Amtrak capital grants, $500 million from the TIGER grant program, and $252 million from transit capital grants. Also, projects eligible for the TIGER program would be restricted to roads, bridges, ports and freight rail.

The House bill is effectively the opening bid in negotiations over funding for housing and transportation programs in FY 2015. The Senate is expected to release its own proposal in the coming weeks.

IV. EPA PROPOSES RULES TO LIMIT GREENHOUSE GAS EMISSIONS

Comments are invited on the U.S. Environmental Protection Agency's (EPA) proposed rule to reduce greenhouse gas emissions from new natural gas and coal-fired power plants as an important policy approach to combat the effects of climate change on the nation's cities and environment.

The proposed rule establishes separate emissions standards for new natural gas (including a less stringent standard for small units) and coal-fired units to ensure that the power plants of the future use cleaner energy technologies-such as efficient natural gas technology, carbon capture and storage, nuclear power, and renewable energy like wind and solar. The proposed rule is a signature part of the President's Climate Action Plan to reduce carbon pollution and prepare the U.S. for the impacts of climate change, particularly with regard to supporting adaptation and resilience efforts at the local level.

Additional proposed rules designed to reduce greenhouse gas emissions from other sources are expected later this year. On a related front this week, the White House released the National Climate Assessment that provides a comprehensive scientific analysis of the impacts of climate change by region and sector, now and in the coming decades.

V. NLC SEEKS EXTENDED TIME TO COMMENT ON NEW CLEAN WATER ACT RULES

In response to a recent proposed rule by the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) to change the Clean Water Act (CWA) definition of "Waters of the U.S.", NLC requested that EPA and the Corps extend the public comment period by 90 days. The agencies' economic analysis largely examines only potential impacts on the CWA Section 404 dredge and fill permit program, which NLC believes does not provide a complete analysis of the economic impact of the rule. NLC requests additional time to further develop an economic analysis and more completely understand how this definition change will impact all CWA programs, including the National Pollutant Discharge Elimination System (NPDES), total maximum daily load (TMDL) and other water quality standards programs, state water quality certification process, and Spill Prevention, Control and Countermeasure (SPCC) programs.

VI. NLC URGES FCC TO MODERNIZE E-RATE PROGRAM

As the Federal Communications Commission (FCC) undertakes a full review of the E-Rate program, which provides schools and libraries with affordable telecommunications services, broadband Internet access and internal network connections, NLC called on the agency to modernize and increase funding for the program, and to streamline the application process.

Since its inception in 1997, the E-Rate program has been successful in providing increased access to modern communications networks to our nation's schools and libraries. The availability and adoption of quality broadband service can vary dramatically from one neighborhood to another, even in heavily populated urban areas. Community schools and libraries can fill this gap by providing local residents with access to broadband and computing hardware that may be cost prohibitive for individuals. However, because the program is so oversubscribed, many communities' residents are unable to rely on their schools and libraries to get online. The FCC has not set a timetable to complete its review.

VII. NLC RESOURCES AND WEBINAR AVAILABLE FOR NATIONAL INFRASTRUCTURE WEEK

This week, NLC will join in supporting Infrastructure Week 2014, a showcase of emerging solutions, innovative approaches, and best practices nationwide to modernize aging infrastructure. As part of the week's activities, NLC will co-host two events. For those in the Washington, D.C. area, NLC will host a discussion, "The Economic Impact of Public Transportation Investment: Stories from Around the Country," on Thursday, May 15 and 12:30 p.m. on Capitol Hill that will feature NLC First Vice President Ralph Becker, Mayor, Salt Lake City, UT. We're hosting a free webinar on Tuesday, May 13 at 2:00 p.m. EDT, "Local Solutions to Pay for Your Transportation Projects: Infrastructure Funding & Financing." The webinar will feature speakers from city government and local transportation authorities and will help participants understand the intricacies of alternative financing and funding mechanisms.
Register for the webinar now.

We hope this information is helpful. If you have any questions, contact Jon Moran at 609-695-3481, ext. 121 or jmoran@njslom.com

Very truly yours,

William G. Dressel, Jr.
Executive Director

 

 

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