Transcript COMMUNITY AND ECONOMIC DEVELOPMENT POLICY AND …
COMMUNITY AND ECONOMIC DEVELOPMENT POLICY AND ADVOCACY COMMITTEE
Congress of Cities Conference and Exposition November 9, 2011 Phoenix, AZ NLC Federal Legislative Update
Local Economic Climate
City Fiscal Conditions in 2011 The nation’s city finance officers report that city fiscal conditions continue to weaken for fifth straight year in 2011 due to: • National economic recession • Struggling real estate markets • Cuts in state aid and transfers • Slowed consumer spending • Underfunded pension and health care liabilities • High levels of unemployment www.nlc.org
Federal Economic Impact
•The biggest question for cities lies in the uncertainty about the health of the national economy, which is driven by a collection of city-regional economies •If regional housing markets, unemployment, and consumer confidence struggle, city revenues will continue to lag, city leaders will face more cuts, and those decisions will act as a drag on the national economy.
- NLC City Fiscal Conditions Report, 2011 www.nlc.org
State Economic Impact
• Since 2009, cities report cuts from states in general aid (50%), shared revenues (49%), and reductions in reimbursements and other transfers (32%). www.nlc.org
Local Response Leading Federal Policy
Local Response Federal Policy • Real estate markets will continue to struggle through 2012 and 2013; • Consumer spending, unemployment, and wages slow to recover; • Large state shortfalls mean more state cuts; • Pension and health care costs management squeeze out other services; • Personnel cuts will continue • Ending balances will continue to decline.
• Shared services – interlocal agreements –regionalization and cost sharing; • Participatory budgeting and citizen engagement to reset/reevaluate priorities; • Redefinition of “core services;” • Outsourcing, privatization and “managed competition;” and, • New partnerships and volunteerism.
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The Issues
The Budget Control Act (the Debt Deal) The Super Committee The American Jobs Act Federal Appropriations Transportation Reauthorization Advocacy Strategy
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Federal Fiscal Realities
If the Committee or Congress fails,
$1.2 trillion in automatic spending cuts
will be imposed on defense and non-defense FY 2013 discretionary spending.
Since 2001, the federal debt has increased dramatically, rising from
33 percent
of GDP to
62 percent
of GDP in 2010 due to two wars and the country’s fiscal policies, along with the recession. In the short term, economic recovery will improve the deficit situation. In the long-term, even after the economy recovers, federal spending is projected to increase faster than revenues due to
structural imbalances and rising health care costs
. The Budget Control Act (debt deal) will help address the problem in the short term but
additional debt reduction measures are required to bring the budget into balance.
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Federal Spending
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Budget Control Act
Cut discretionary spending by nearly
$1 trillion over ten years
, enforced by annual spending caps.
Created a bipartisan Super Committee tasked with finding at least
$1.5 trillion more in deficit reduction
by November 23 that must be voted upon by Congress by December 23.
If the Committee or Congress fails,
$1.2 trillion in automatic spending cuts
will be imposed on defense and non-defense FY 2013 discretionary spending.
The Super Committee
Use a balanced approach = revenue enhancements + spending cuts + investments in cities Do no harm to harm to tax exempt municipal bond financing. Transparency in the process with opportunities for input. Don’t transfer unfunded mandates to local governments.
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American Jobs Act
Tax relief for both workers and businesses; Resources to creating jobs while rebuilding and modernizing the country’s infrastructure; Assistance for the unemployed and providing pathways back to work; and Offsets to pay for its provisions.
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Appropriations
• Minibuses • Election year politics • Need to demonstrate ability to govern • Unknown constituencies
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THUD Appropriations
SENATE CDBG $2.85 B
$485 million below the House and the lowest amount since 1990
HOME $1 B Sustainable Communities $90 M Choice Neighborhoods $120 M Housing Counseling $125 M TIGER Grants $ 550 M
$120 M for small/rural communities
HOUSE CDBG $ 3.5 B HOME $1.2 B Sustainable Communities $0 Choice Neighborhoods $0 Housing Counseling $0 TIGER Grants $0
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Contact
Michael Wallace Program Director, Federal Relations National League of Cities 202.626.3025
www.nlc.org