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
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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
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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%).
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Local Response Leading Federal Policy
Local Response
• 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.
Federal Policy
• Shared services – interlocal
agreements –regionalization and costsharing;
• 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
HOUSE
CDBG $2.85 B
$485 million below the House and the
lowest amount since 1990
CDBG $ 3.5 B
HOME
HOME $1.2 B
$1 B
Sustainable Communities $90 M
Sustainable Communities
Choice Neighborhoods $120 M
Choice Neighborhoods $0
Housing Counseling $125 M
Housing Counseling $0
TIGER Grants $ 550 M
$120 M for small/rural communities
TIGER Grants
$0
$0
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Follow and engage with NLC on:
Blog | CitiesSpeak.org
Twitter | leagueofcities
Facebook | National League of Cities
www.nlc.org
Contact
Michael Wallace
Program Director,
Federal Relations
National League of Cities
202.626.3025
[email protected]
www.nlc.org