Mid-year Washington roundup.

• Author: Gaffney, Susan
• Position: Federal Focus

The new Democratic majority was anxious to begin its work in January, hoping to tackle many issues important to local and state governments. This Federal Focus article examines just how far Congress, now mid-way through its first year, has come in moving forward on issues important to the public sector.

FEDERAL BUDGET

Unlike last year, House and Senate leaders are insisting on working within the confines of the budget resolution passed this spring, and completing the 13 appropriation bills prior to the end of the fiscal year on September 30. The nonbinding budget resolution provides a blueprint for congressional action on the authorization and appropriation bills, and many hearings already have been held providing insight into Congress' priorities under the new leadership. Most importantly for state and local governments, Congress will likely reject proposals from the President to cut programs such as first responder homeland security grants, community development block grants, Amtrak and transportation funding, community policing grants, and water infrastructure funding. Final legislation on these programs for FY08 will not be completed until later this year.

3 PERCENT WITHHOLDING AND REPORTING REQUIREMENT ON GOVERNMENT PAYMENTS

Legislation has been introduced in the House and Senate to repeal Section 511 of the Tax Increase Prevention and Reconciliation Act of 2005 (PL. 109-222), which requires state and local governments that spend more than $100 million on goods and services to withhold 3 percent of payments to all vendors, beginning in 2011.

In the House, Congressmen Kendrick Meek (D-FL) and Wally Herger (R-IL) introduced H.R. 1023 and in the Senate, Senator Larry Craig (R-ID) introduced S. 777. The GFOA and other state and local government associations (including the National Association of State Auditors, Comptrollers and Treasurers; the National League of Cities; and the National Association of Counties) support legislative efforts to eliminate this unfunded mandate that would cause significant administrative and financial burdens to governments across the country.

To assist with these efforts, GFOA members are encouraged to complete a survey that will enhance our ability to demonstrate to Congress the devastating impact this law will have on state and local governments. The survey for local and state governments may be found at http://www2.nasact.org/ withholdings/survey.htm.

In addition to the withholding provision, Section 511...