Washington in 2011: efforts to trim the federal budget will likely demand the attention of the GFOA and all other state and local government associations.

• Author: Gaffney, Susan
• Position: Federal Focus

The 112th Congress will likely show greater interest in state and local government issues. While the Republican House of Representatives and the Democratic Senate might not find agreement on many issues, their efforts to trim the federal budget--including discretionary spending, a thorough review of the federal tax code, and direct Congressional interest in state and local government fiscal matters, including public pensions--will likely demand the attention of the Government Finance Officers Association (GFOA) and all other state and local government associations. Additionally, significant regulatory activity such as the Dodd-Frank Wall Street Reform and Consumer Protection Act will both directly and indirectly affect state and local governments. The GFOA Federal Liaison Center will monitor legislative and regulatory activities in these areas and work to advance the public policy positions adopted by the GFOA membership. The association's legislative and regulatory priorities for the year are listed below.

PUBLIC PENSIONS AND RETIREMENT SAVINGS

In 2010 and 2011, Congress and federal regulatory bodies such as the Securities and Exchange Commission (SEC) have focused their attention on perceived problems with the funding of public pensions. The Public Employee Pension Transparency Act, which was introduced in the last Congress and is expected to be reintroduced, seeks federal regulation of state and local pension plans by mandating a one-size-fits-all federal reporting requirement on state and local government pension costs. Governments that use pension systems and do not comply with this requirement would not be allowed to issue tax-exempt bonds and would have future direct subsidy bond payments withheld by the federal government. The GFOA opposes such legislative efforts and will continue to advocate for federal initiatives to safeguard the operations of state and local government employee retirement systems.

TAX MEASURES

Repeal the 3 Percent Withholding Requirement on Government Payments Law. Section 511 of the 2005 Tax Increase Prevention and Reconciliation Act (P.L. 109-222) requires governments that spend more than $100 million per year on goods and services to withhold 3 percent of the payments made to vendors and contractors and to remit that 3 percent to the federal government. The withholding requirement is set to begin January 1, 2012, and constitutes an unfunded mandate on state and local governments. The GFOA supports...