GFOA News Letter<\/h3>\n

April 18, 2013<\/p>\n

On April 10,\u00a0 2013, the White House sent to Congress a $3.78 trillion budget proposal\u00a0 for fiscal 2014, which included a combination of revenue raisers and\u00a0 spending cuts designed to reduce the federal budget deficit by $1.8\u00a0 trillion by 2023. The largest revenue increase proposed in the budget\u00a0 would come from a reduction in the value of certain tax benefits,\u00a0 including tax-exempt interest on municipal bonds.\u00a0 Under the proposal a 28% limit would be imposed on the tax value of\u00a0 specified deductions and exclusions from adjusted gross income earners\u00a0 in the 33%, 35%, and 39.6% tax brackets. The administration estimates\u00a0 that this policy would generate $529.5 billion over the next ten years.\u00a0 The GFOA has consistently opposed any limitations on these provisions in\u00a0 the tax code because of their potential costs to state and local\u00a0 governments, and is encouraging our members to contact the White House\u00a0 and discuss their opposition and concerns with this proposal. Our\u00a0 Federal Liaison Center is providing a draft letter that members can use to send to the president on this issue.
\nBeyond\u00a0 these harmful provisions, the proposal also reintroduces a new America\u00a0 Fast Forward bonds program, which would provide 28% subsidies for\u00a0 governmental financing. The bonds could be used for all purposes for\u00a0 which tax-exempt bonds are currently eligible, including working\u00a0 capital, refundings, and eligible 501(c)(3) and other private-activity\u00a0 bond uses, subject to current state volume caps. New-money AFF bonds\u00a0 issues in 2014 and 2015 for school and university construction projects\u00a0 would be eligible for a 50% subsidy rate.
\nRegarding retirement\u00a0 savings, the budget proposal would limit the total amount an individual\u00a0 can accumulate for retirement in tax-favored accounts. In particular,\u00a0 the president\u2019s budget would cap such accumulated savings at the amount\u00a0 necessary to provide the maximum annuity permitted for a tax-qualified\u00a0 defined benefit plan under current law \u2013 currently an annual benefit of\u00a0 $205,000 at age 62. The cap would apply to individual accounts such as\u00a0 IRAs, 401(k)s, 403(b)s, and 457(b)s, as well as to defined benefit\u00a0 accruals.
\nIn other areas of note to state and local governments, the proposal would:<\/p>\n

\n
• Exclude private activity bonds for water infrastructure<\/strong> from state volume caps.<\/li>\n
• Permanently extend the New Markets Tax Credit<\/strong>.<\/li>\n
• Reduce\u00a0 funding for the b program, which supports housing and community\u00a0 facility improvements in low income neighborhoods, from $2.8 billion in\u00a0 the current fiscal year to $2.7 billion in fiscal 2014.<\/li>\n
• Reduce funding for Clean Water and Drinking Water State Revolving Loan Funds<\/strong>,\u00a0 which provide low-interest loans to communities to finance water\u00a0 projects, from $2.2 billion in the current fiscal year to $1.9 billion\u00a0 in fiscal 2014.<\/li>\n
• Reduce funding for the Low Income Home Energy Assistance Program<\/strong>,\u00a0 which assists low income families and individuals with heating and\u00a0 cooling bills, from $3.2 billion in the current fiscal year to $2.9\u00a0 billion in fiscal 2014.<\/li>\n
• \u00a0Changes to funding for federal programs designed to support state and local public safety. These programs include:\n
  \n
  • The Community Oriented Policing Service<\/strong> grant program, which enables state and local governments to hire additional police officers. Under the White House proposal, the COPS program would be increased by $241 million over current funding levels, for a total of $439.5 million in fiscal 2014.<\/li>\n
  • Part of the COPS program, the $150 million new Comprehensive School Safety<\/strong> will develop school safety plans, improve equipment and systems needed to provide for enhanced school safety, and hire school safety personnel.<\/li>\n
  • The Byrne Justice Assistance Grants<\/strong>, which provides states and localities with funding to support state and local law enforcement equipment, prosecution and courts, crime prevention, drug treatment, and other similar initiatives. The White House\u2019s fiscal 2014 budget proposal would provide a $25 million increase over current year funding levels, for a total of $395 million in fiscal 2014.<\/li>\n
  • The Staffing for Adequate Fire and Emergency Response<\/strong> grant program, which provides funds to state and local governments to hire firefighters, as well as the Assistance to Firefighter<\/strong> grants program, which provide funding to state and local governments for equipment, protective gear, emergency vehicles, and training. Under the administration\u2019s proposal, each of these programs would experience a slight decrease from $338 million in the current fiscal year to $335 million in fiscal 2014.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
    \n
    • Eliminate the State Homeland Security Grant Program<\/strong>,\u00a0 which provides resources to state and law enforcement and emergency\u00a0 response agencies to help fund equipment, training, and other needs to\u00a0 respond to acts of terrorism. The proposal would also eliminate the Urban Areas Security Initiative<\/strong>,\u00a0 which provides funding to address similar needs of first responders in\u00a0 high-density population areas. These programs would be replaced by a new\u00a0 National Preparedness Grant Program<\/strong>.<\/li>\n
    • Reduce funding for Airport Improvement Grants<\/strong>\u00a0 by $450 million to $2.9 billion in fiscal 2014, by eliminating formula\u00a0 grants to large airports but allowing them to increase their own\u00a0 passenger facility charges.<\/li>\n
    • Provide $50 billion in new funding\u00a0 for infrastructure repair and maintenance of existing roads, bridges,\u00a0 transit systems, border crossings, railways, and runways. The proposal\u00a0 also supports the funding levels included in the 14-month transportation\u00a0 reauthorization law (MAP-21<\/strong>), which was enacted in\u00a0 July 2012. In fiscal 2014, the budget would provide $53 billion for\u00a0 highway, transit, and highway safety programs.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

      GFOA News Letter April 18, 2013 On April 10,\u00a0 2013, the White House sent to Congress a $3.78 trillion budget proposal\u00a0 for fiscal 2014, which included a combination of revenue raisers and\u00a0 spending cuts designed to reduce the federal budget … Read more<\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3],"tags":[],"acf":[],"_links":{"self":[{"href":"http:\/\/www.c2ig.com\/wp-json\/wp\/v2\/posts\/475"}],"collection":[{"href":"http:\/\/www.c2ig.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.c2ig.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.c2ig.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"http:\/\/www.c2ig.com\/wp-json\/wp\/v2\/comments?post=475"}],"version-history":[{"count":2,"href":"http:\/\/www.c2ig.com\/wp-json\/wp\/v2\/posts\/475\/revisions"}],"predecessor-version":[{"id":477,"href":"http:\/\/www.c2ig.com\/wp-json\/wp\/v2\/posts\/475\/revisions\/477"}],"wp:attachment":[{"href":"http:\/\/www.c2ig.com\/wp-json\/wp\/v2\/media?parent=475"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.c2ig.com\/wp-json\/wp\/v2\/categories?post=475"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.c2ig.com\/wp-json\/wp\/v2\/tags?post=475"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}