Thursday, April 30, 2009
A big day for budgets
After passing along party lines with a vote of 53-45, the $56 billion state biennial budget bill now moves to the Senate. The Plain Dealer had a nice summary of the provisions.
Switching to the federal side, the vote was largely along party lines, (233-193 in the House and (53-43 in the Senate) with a few Democrats in both houses jumping ship and voting "no". Today's coverage in the Washington Post and New York Times of the $3.5 trillion total package is worth a read.
But the worst is not yet over - Congress will take up its 9 appropriations bills to set levels of funding for specific programs very shortly, and the Budget Resolution requires them to consider legislation on health care and higher education funding. And at the state level, we expect that conference committee will be busy as the bill coming out of the Senate will likely be quite different from that just passed by the House.
Tuesday, April 28, 2009
Agreement Reached on FY10 Budget Plan
The House Budget Committee has announced that Senate and House negotiators have reached an agreement on a federal budget plan for fiscal year 2010. Highlights of the plan:
- Discretionary spending set at levels between the House and Senate versions - $10 billion lower than the President’s proposal;
- Includes reconciliation instructions on education investment and healthcare reform. This requires committees to report legislation by October 15 if legislation cannot be achieved through normal procedures;
- Permanently extends the middle-income tax cuts adopted in 2001 and 2003 including the 10% bracket, child tax credit, and marriage penalty relief;
- Indexes the alternative minimum tax to inflation (AMT) – so Congress won’t have to pass a temporary change each year;
- Extends estate tax exemptions at 2009 levels and indexes exemptions for future years.
The full House and Senate are each expected to vote on the fiscal year 2010 budget conference agreement this week.
Monday, April 27, 2009
Five Things You Need To Know This Week, April 27, 2009
1. In the Nation...
The U.S. declared a public health emergency Sunday to deal with the emerging new swine flu, much like the government does to prepare for approaching hurricanes.
2. In the State...
Amid cuts in areas such as child protective services and charter schools, state spending on long-term care through Medicaid continues unabated, keeping Ohio at 40 percent above the national average.
3. In Our Community...
In this, the most dire housing market that tax experts can remember, property values are tumbling.
4. At Community Solutions...
Our staff was pleased to collect and donate 12 full boxes of food to the Cleveland Foodbank’s Harvest for Hunger campaign last week. If you’d like to know how to help hungry people in any of these 19 Northeast Ohio counties, click here:
The Internet has revolutionized how people look for jobs and how businesses find employees. Career coaches say that LinkedIn…is often the first source recruiters, executives and other professionals check when searching for potential hires. http://www.cleveland.com/help-wanted/index.ssf/2009/04/help_wanted_the_newly_unemploy.html
Friday, April 24, 2009
This Week in Washington - 4/24/09
Congressional Quarterly is reporting that a tentative deal has been reached between the House and Senate on a final budget resolution that includes reconciliation instructions for health care and student aid and that cuts $10 billion from the President’s discretionary levels. (The House had cut discretionary funding by $7 billion below the President, the Senate had cut $15 billion.) CQ is also reporting that a formal conference meeting will be held on Monday, April 27. If that happens, we can expect the final resolutions to be taken up in the House and Senate during the course of the week.
The House named the following members to be conferees on the budget resolution: Budget Chairman Spratt (D-SC), ranking member Paul Ryan (R-WI), and Reps. Allen Boyd (D-FL), Rosa DeLauro (D-CT), and Jeb Hensarling (R-TX). The House also defeated a motion to instruct conferees to drop the budget reconciliation instructions from the final resolution. The vote was 227 to 196.
The Senate also named conferees after taking a series of votes on several procedural motions. The conferees are Budget Chairman Conrad (D-ND), ranking member Gregg (R-NH), and Sen. Murray (D-WA).
It appears increasingly likely Congress will wait to take up tax legislation to address the 2001/2003 “middle class” tax cuts, AMT, and the refundable credits until next year. This could change, particularly if the debate on health care bogs down. But we remain concerned about the prospects for enacting a one-year extension of the 2009 parameters of the estate tax should the larger tax debate indeed be put off.
To review: enacting a one-year extension to the estate tax could require 60 votes in the Senate, which could be difficult after the vote on the Lincoln-Kyl amendment during the budget resolution. Estate tax supporters are likely to push adopting the Lincoln-Kyl parameters for one year as a “compromise” instead of the 2009 levels. (The Lincoln-Kyl amendment increased the exemptions to $10 million per couple/$5 million per individual and reduced the tax rate to 35 percent.)
Proponents have leverage because, unless 60 votes can be produced for any proposal, the default will be that the estate tax will be completely eliminated in 2010, which they would prefer. Allowing either the Lincoln-Kyl parameters to be adopted for one year or the estate tax to disappear in 2010 would make it more difficult to restore the 2009 parameters as part of a broader tax bill because many members on both sides of the aisle will not want to be perceived as voting for a tax increase.
Action is well underway to structure components of health reform legislation for consideration this summer. Committee chairmen in both the House and Senate are working to have bills ready for committee mark-ups following Memorial Day with floor debate after the July 4th recess.
In the Senate, the HELP and Finance Committees are expected to produce separate bills that will be combined on the Senate floor. Finance Chairman Baucus and Ranking Member Grassley hope to drill down on a number of key issues during a series of health reform roundtables for committee members and health experts, which kicked off on Tuesday. They will focus on three areas: delivery system reform, coverage, and financing.
In the House, the chairmen of the Energy and Commerce Committee, the Ways and Means Committee, and the Education and Labor Committee have pledged to work together on health reform legislation that is expected to follow a similar timetable as the Senate legislation. (Although the public focus of the Energy and Commerce Committee this month has been on climate change legislation, intense behind the scenes work on health reform is well underway.)
H.B. 1 Update: Items of Interest
Eligibility determination (income maintenance) for County Departments of Job and Family Services (CDJFSs). CDJFSs serve as the front door for human service programs. GRF dollars are used along with federal food stamp, Medicaid, and TANF dollars to fund staff to perform eligibility determinations for these programs. Even though caseloads for food stamps, Medicaid, and cash assistance are expected to increase, state GRF support for this line item (GRF 600-521) is substantially reduced when compared to FY 2008 actuals ($19 million less in FY 2010 and $25 million less in FY 2011). The state does add some flexibility to counties by allowing the local mandated share to be used for food stamp or Medicaid eligibility determination; however, this change will reduce funding for TANF services at a time when TANF resources already have been substantially reduced due to the spend-down of the surplus balance. In a nutshell, this change plugs a hole in one funding stream by creating a hole in another.
- House Changes: There were no changes to this program.
TANF funding for county Prevention, Retention, and Contingency (PRC) programs and Title XX services. The Executive Budget reduced the TANF allocation for counties by $32 million per year when compared to FY 2008 actuals. In addition the county allocation from the transfer of TANF funds to Title XX will be reduced from $67 million to $6 million per year. PRC funds provide diversion, emergency assistance and work participation activities while Title XX dollars are primarily used to fund child welfare and adult protective services. During an economic downturn, reports of abuse and neglect rise.
- House Changes: The House added $12.5 million in new GRF fund dollars per year through JFS line item 660-533, Child, Family, and Adult Community & Protective Services. Funds will be distributed according to the current ODJFS Title XX distribution formula. Funds are to be used to help individuals at or below 200% of poverty achieve or maintain self-sufficiency; respond to reports of abuse, neglect, or exploitation of children or adults; provide outreach and referral services for home and community based services for individuals at risk of placement in a group home or institution; and to provide protective services in cases of actual or potential abuse, neglect, or exploitation of a child or adult.
Child welfare programs. Due to the spend-down of the TANF surplus, a total of $17.5 million per year in TANF funding earmarked for child welfare programs is eliminated in the Executive Budget. These programs provided financial assistance to kinship caregivers who provide a permanent home to children who have been in the child welfare system, financial assistance to help former foster children transition to adulthood, and funding to recruit adoptive families for children in need.
- House Changes: The House added $5 million per year in a new GRF line item (600-541, Kinship Permanency Incentive Program) in the ODJFS budget for financial assistance to kinship caregivers.
Food assistance. The Executive Budget maintains funding for the Ohio Association of Second Harvest Food Banks at $8.5 million per year, but the need for food assistance is rising. An additional $8.5 million per year is needed to help the food banks keep up with their growing demand.
- House Changes: The House added $1 million per year in GRF to JFS line item 600-410, TANF MOE, and earmarked the funds for the Ohio Association of Second Harvest Food Banks to purchase and distribute food products. The House also added $1.5 million per year to JFS line item 600-535, Early Care and Education, for the Children’s Hunger Alliance to fund the Child Nutrition Program outreach efforts.
Lift the statutory cap on assisted living slots. To ensure long term financial sustainability in the Medicaid program, Ohio must develop a long-term care system that is more balanced between institutional care and home and community based care. Right now Ohio's care system is heavily skewed towards nursing facility care, and increasing home and community based options for consumers will help to bring balance to this system.
- House Changes: The House lifted the statutory cap on assisted living slots; however, the House backed away from meaningful long term care system reform by increasing state financial support for nursing home care through a significant rate increase that will cost an additional $56.4 million in FY 2010 and $177.3 million in FY 2011.
Need for New Revenues. We remain concerned about the strength of our revenue system, which has been severely damaged by five years of tax cuts and the unprecedented amount of use of one time funds to support FY 2010-2011 spending. We estimate that up to an additional $8 billion in new revenue will be needed to support state spending in the next biennium. We have been telling everyone who will listen to us that we must act responsibly and act now to start dealing with our structural deficit. We have recommended a series of revenue options that will yield about $2 billion in new revenues over the biennium to begin to address the state’s structural deficit.
- House changes: The House adopted the LSC revenue estimates, which enabled them to assume an additional $342 million in revenues (Federal revenues are excluded from this analysis due to changes in the treatment of Title I federal stimulus). The LSC estimates were more pessimistic than the Executive in FY 2010 but assumed a more robust recovery in FY 2011. The change between the two estimates is very small given the overall size of the state budget; however, we have two concerns about relying on a more optimistic forecast. First, neither the LSC nor executive forecasts have been adjusted to account for the impact of the recent $0.62 per pack federal tax increase on cigarettes. This change, according to the testimony of LSC Director Mark Flanders before the House Finance committee, will likely reduce GRF revenues by $100 million over the biennium. Second, the balance sheets in both the Executive and LSC forecasts assume that $387.2 million in GRF revenue will be carried forward from FY 2009 to FY 2010. Through March 2009 state tax receipts were trailing revised estimates by $195.8 million. It is looking more and more unlikely that the state will be able to hit its FY 2009 revenue targets.
Thursday, April 23, 2009
Advocacy Needed for Early Care and Education
House Leadership to Call TODAY:
Speaker of the House Armond Budish: (614) 466-5441
Majority Floor Leader Jennifer Garrison: (614) 644-8728
House Finance Chair Vernon Sykes: (614) 466-3100
You can also send a letter to your Representative and House Leadership through the groundWork website here: http://www.groundworkohio.org/getinvolved/contactrep.cfm
Wednesday, April 22, 2009
Happy Earth Day
At the same time, Congress is considering cap-and-trade legislation to reduce emissions by putting a cap on allowable levels and making those allowances tradable on the open market, with varying proposals on how to use cap-and-trade revenue to offset rising energy costs for households. Some worry that cap-and-trade would drive up energy and related costs in ways that low-income populations cannot afford. Others worry that if we don't reduce consumption, the price for energy will still increase quickly in addition to increased health care costs (for asthma, cancer, etc.) due to air pollution.
Tuesday, April 21, 2009
Recovery Update: Where to look for stimulus info?
There is more information coming out on the ARRA and its programs nearly every day. But specifics are sometimes difficult to find, and cutting through the clutter to find good, reliable, up-to-date, simple information can be challenging.
After literally hours of searching and reading, and killing a small forest-worth of trees printing out materials, I’ve compiled this list of the best sources online for stimulus information (all in my opinion of course).
TIMING OF INFORMATION RELEASE
Ninety days from enactment (May 15, 2009) is the deadline for most federal agencies to submit their plans to Congress. We expect there to be many more specifics available after that date. Some departments are moving more quickly than others.
www.Recovery.gov – the official website of the Obama Administration. Rumor is that the final destination of each stimulus dollar will be posted on this website as information become available. For now, the “Featured News” section is most helpful – they compile the releases from all federal departments and link directly to the sites.
www.Recovery.Ohio.gov – Governor Strickland’s official recovery website. As project funding is announced, it will be posted here. If you have a project for which you are seeking stimulus funding, you MUST submit an expression of interest through this website to be considered (and do it as soon as possible as some programs are closing shortly). When you click on “submit a proposal” it also links to a series of documents that lists programs distributed by various levels of government.
http://Brown.senate.gov/ – Senator Sherrod Brown has a special section of his website dedicated to the recovery act. Resources under “Economic Recovery Package” are very helpful and updated frequently. I found the grant deadlines document especially helpful – Senator Brown’s staff has done some of the work for us!
www.StateRecovery.org – a resource from the Council of State Governments, examines recovery funding from a state perspective. The “Key Deadlines” and “State Responses” sections are particularly interesting.
Each federal department has created a special recovery website (this is part of the transparency guidelines for the ARRA). They are usually in the form : website/recovery (examples: www.hud.gov/recovery, www.hhs.gov/recovery, www.ed.gov/recovery) Here you can find specific program information and allocations as they become available. HUD and Education have also done several webcasts on specific issues that are very helpful if you are interested in those particular programs.
One thing I’ve found most helpful is to google search the program name (in quotes) and “recovery act” – this can quickly connect you to info put out by national organizations about specific programs. Keep in mind many programs existed before ARRA, and while some have been slightly modified, you can usually find some good info on how the money has been distributed in the past.
If you still have questions, it may be time to call the Governor's Office (614-644-5320 for the Office of Faith Based and Community Initiatives), Senator Brown's Office (1-888-896-OHIO) or your U.S. House Member. Or send me an e-mail. Who knows, your question might be the topic of a future "Recovery Update" post!
Monday, April 20, 2009
This Week in Washington - 4/20/09
The estate tax is one unresolved issue facing the Budget Resolution conference committee. The House resolution assumes that the estate tax would continue under the 2009 parameters, which provides an exemption of $7 million per couple and $3.5 million per individual with a statutory rate of 45 percent. The 2001 tax-cut law gradually phased out the estate tax by raising the exemption levels and reducing the top rate. Under current law, the tax will disappear completely in 2010 but reappear in 2011 under its 2001 parameters, with a $1 million exemption and a 55 percent rate on the largest estates. No policy-maker wants this to happen, so some action on the estate tax is very likely to occur this year.
The full Senate approved the Lincoln-Kyl amendment to substantially weaken the estate tax by increasing the exemption to $5 million per individual/$10 million per couple, reducing the top rate to 35 percent, and “reunifying” the estate tax and gift tax exemptions. While the vote, which was 51-48, was on an amendment to create a reserve fund and is not binding, a majority of Senators went on the record in support of cutting the estate tax below the President’s levels.
The picture was blurred a bit by a subsequent vote on a Durbin amendment to create a point of order against any estate tax legislation beyond what is assumed in the underlying resolution unless it provides an equal amount of tax relief to taxpayers earning less than $100,000. That vote was 56-43. Senator Durbin mainly offered this amendment to give moderates something to be for so they could vote against the Lincoln-Kyl amendment. In other words, it’s going to take a lot of work to get them to ultimately vote against further reductions in the estate tax.
The conferees are likely to drop the Durbin amendment because it causes procedural problems for the budget resolution when it comes back for final approval.
Although we don’t know for sure yet, there’s a growing sense that extending the middle class tax cuts could be deferred until next year. (This does not pose a problem for the refundable credits because they are also in place through 2010.) If that happens, comprehensive estate tax legislation is also likely to be deferred until next year. The President and opponents of further reductions in the estate tax will not want to let it expire in 2010, so it is looking increasingly likely that a one-year extension of the 2009 parameters will need to be enacted this year.
We’re very worried that the anti-estate tax crowd will use this as an opportunity to cut the estate tax for just one year, possibly to the levels proposed in the Lincoln-Kyl amendment. In fact, the ranking member on the Finance Committee, Senator Grassley, has made it clear that any estate tax legislation, even an extension, will be blocked unless they get a higher exemption and a lower rate.
We’ll be working to figure out a way to put significant pressure on Congress, and on Senator Voinovich in particular, to ensure that the 2009 levels stay in place for at least one more year.
Five Things You Need To Know This Week, April 20, 2009
1. In the Nation...
President Barack Obama promised Saturday to eliminate dozens of government programs that have been shown to be "wasteful or ineffective" and said he will call on his cabinet to hunt their budgets for more.
2. In the State...
Gov. Ted Strickland's school-funding plan, which helped get him elected in 2006, is becoming a victim of reality: The reality of less money and more politics.
3. In the Region...
Earth Day 2009 was celebrated across Northeast Ohio over the weekend, including Earthfest at the Cleveland Metroparks Zoo (the longest-standing Earth Day event in the U.S.), events at Lake Metroparks Farmpark and an Eco-Fair at Penitentiary Glen, the Lorain County Metro Parks’ Carlisle Reservation, and Medina County’s first annual Earth Day Family Walk. Officially, Earth Day is Wednesday, when the Earth Day Network’s “Green Generation” campaign will be launched. The campaign is a two-year initiative that will culminate on the 40th Anniversary of Earth Day in 2010.
4. At Community Solutions…
After the first round of testimony in the House, members have heard from multiple groups about the inadequacies of the Medicaid budget. There is no doubt that the economy is presenting major challenges for all. Even though the federal government is providing an unprecedented amount of additional revenues, these revenues are temporary. Community Solutions believes that Ohio would be wise to use these revenues to cover increasing caseloads, maintain current levels of services, and invest in short-term solutions that will save money in the long run. The April 16 issue of State Budgeting Matters provides an overview of the FY 2010-FY 2011 Executive Budget proposal for the Department of Jobs and Family Services’ (ODJFS) Medicaid program and an estimate of ODJFS Medicaid spending for the FY 2012-FY 2013 biennium: http://www.communitysolutions.com/images/upload/resources/sbmv5n8.pdf
They bought into the notion that if they went to college—never mind the debt—their degree would lead to a lucrative job. And repaying their student loans would never be a problem.
Tuesday, April 14, 2009
NEO Media Guide Moves Online
Monday, April 13, 2009
Updated stimulus matrix should help to navigate funding streams
It is our hope that this document will help advocates navigate the sometimes choppy waters of the various funding streams as you try to figure out where you might be able to get money for your programs. If you have questions on specific programs, feel free to contact me at email@example.com
Still looking for more information? I'll be at Lakeland Community College on Thursday to discuss this subject in more detail. The program is free, but pre-registration is required: www.lakelandcc.edu/comeduc/
Five Things You Need To Know This Week, April 13, 2009
The Stimulus and Poverty: First Steps toward a Strong Antipoverty Policy
Over the coming weeks, Spotlight on Poverty is running a special series that examines how the American Recovery and Reinvestment Act affects low-income Americans.
2. The State
States slashing social programs for vulnerable
Battered by the recession and the deepest and most widespread budget deficits in several decades, a large majority of states are slicing into their social safety nets—often crippling preventive efforts that officials say would save money over time. Ohio faces large cutbacks in child welfare investigations, with some counties losing 75 percent of their investigators, which may mean more injured children and more taken into foster care.
3. The Region
Savers rewarded by Ohio program
Those who have followed the Akron Beacon Journal's “Reclaim the Dream” series, where readers are encouraged to save money or reduce their debt, know that the importance of having some savings. Whether you're saving up for a rainy day or something specific, having savings empowers you.
Reclaim the Dream Website: http://www.reclaimthedream.net/
4. Community Solutions
American Recovery and Reinvestment Act outlined
An updated outline of the American Recovery and Reinvestment Act, prepared by Emily Campbell of the Public Policy team, assists users by giving the final distribution authority for all funds; in other words, it lets you know exactly where to apply for the money. The updated report can be found here: http://www.communitysolutions.com/images/upload/resources/ARRA-Summary_Updated-040909.pdf
On Thursday, Emily will be the featured presenter at Lakeland Community College on the economic recovery package. The 8:30 a.m. program is free, but pre-registration is required: www.lakelandcc.edu/comeduc/
Credit card companies using new fees, rates to get more out of consumers
If you're one of the nation's 173 million people with credit cards, you may find that card getting more expensive--even if you don't carry a balance.
Saturday, April 11, 2009
This week in Washington, 4/10/09
PRIORITIES FOR THE BUDGET CONFERENCE
The budget resolutions passed by the House and Senate both preserve Congress’s ability to address the President’s key initiatives. The next step in the process will be to resolve the differences in a conference committee. We actually expect the final resolution to be worked out behind closed doors over the next several weeks by a small group of Budget Committee Democrats in consultation with their Leadership and the White House. Since no Republicans supported the resolution in committee or on the floor, they are only expected to be part of the final, formal conference meeting which will occur after all the decisions have been made.
OVERVIEW OF THE RESOLUTIONS
The House and Senate budget resolutions are similar in a number of key ways. Deficits will fall substantially over the next five years under both versions. They do remain high relative to the economy by historical standards because of the recession and financial system breakdown. But the key point is that under both plans, deficits over the next five years would be lower than the deficits that would occur if current policies remain unchanged.
Both the House and Senate resolutions assume that tax cuts that benefit middle-income taxpayers enacted in 2001 and 2003 (the 10 percent bracket, the child tax credit and marriage penalty relief) will be extended without being offset.
Both the House and Senate resolutions facilitate reforming the nation’s health care system to move toward universal insurance coverage and slow the rate of growth of health care costs system-wide. They also pave the way for enacting other major investments such as improving education and facilitate enactment of comprehensive climate change legislation.
Discretionary funding: The final budget resolution will set the total amount of funding available to the Appropriations committees for discretionary programs for the next fiscal year, 2010. The good news is the Senate rejected all amendments to cut domestic discretionary funding below the cuts made by the Budget Committee.
The President would increase domestic discretionary funding by 5.4 percent over last year, excluding inflation. Congress was concerned about increasing spending again after having just enacted increases in the Omnibus Appropriations for 2009. So the House cut domestic discretionary by $7 billion – to a 5 percent increase over last year after adjusting for inflation. The Senate cut domestic discretionary even further -- by $15 billion below the President, a 3 percent increase over last year after adjusting for inflation.
These increases should be put into perspective. The President’s budget includes one-time funds for decennial census. It also includes a technical adjustment for the FHA loan guarantee program that does not reflect a change in policy. Much of this increase reflects conditions in the mortgage industry. Without these two policies, the House increase is only 3.5 percent after adjusting for inflation and the Senate increase is only 1.5 percent after adjusting for inflation.
The President is proposing to increase veterans spending by more than 10 percent. The House and Senate budget resolutions want to increase funding for veterans programs even further, to an 11.5 percent nominal increase over last year.
Once you factor in those increases, funding for all other discretionary programs would increase by just 0.6 percent under the Senate budget resolution (adjusted for inflation). That leaves very little for investments in programs that have been significantly underfunded in recent years, like Head Start, education, housing, public health, and more. If members believe increases are needed in some of these other areas, they need to build support higher discretionary funding levels for 2010 than are assumed by the Senate.
Finally, domestic discretionary spending is not the cause of the deficit problem. While total discretionary spending has increased significantly in recent years, it has been overwhelmingly for defense and homeland security. Domestic discretionary spending has grown only slightly since 2001 after inflation is taken into account. Even after the increases provided in the Omnibus Appropriations bill for 2009, total domestic discretionary funding has increased just 1.1 percent per year on average since 2004 (adjusted for inflation.) A number of key programs that invest in the education and well-being of children and families have been significantly underfunded as a result of this budget policy.
Reconciliation instructions: The House plan includes reconciliation instructions to three committees that would facilitate passage of legislation to enact Obama’s key initiatives in health care, education, and possibly climate change. The Senate resolution includes no reconciliation instructions so this issue will need to be resolved in conference. Every President in recent memory, including both Presidents Bush, has used this process in their first years to enact major domestic initiatives.
The House resolution suggests reconciliation would be used to facilitate consideration of legislation to reform health care and to make improvements in student financial aid. But because the Energy and Commerce and Ways and Means Committees both received instructions in the House, it is conceivable that the procedure could be used for climate change legislation if it’s not used for health reform. Including the instructions in the final budget resolution does not require that the reconciliation process be utilized.
Legislation that is brought to the floor as a reconciliation measure is protected by special rules and procedures, particularly in the Senate. The types of amendments that can be offered are limited, and the time for debate is predetermined. This means a Reconciliation bill cannot be filibustered, and only requires a simple majority of 51 votes to pass, rather than the 60 needed to shut down a filibuster.
The Senate resolution did not include Reconciliation instructions mainly because Republicans, especially those on the Finance and HELP Committees who are engaged in bipartisan discussions on health reform, labeled the move as partisan and an attempt to shut them out of the process.
Taxes/Estate tax: The House and Senate resolutions both assume most of the tax cuts proposed by the President, including the extension of the tax cuts first enacted in 2001 and 2003 for everyone earning $250,000 or less. The House plan contains $613.2 billion in unpaid-for tax relief over five years, while the Senate plan as it came out of Committee contained $825 billion. The Senate also adopted several problematic tax-related amendments during floor consideration that could lead to more tax cuts and that will need to be addressed during conference. Next week’s update will contain a more detailed explanation of the Estate tax amendments adopted in the Senate.
Other Senate tax amendments: The Senate also adopted amendments to exempt various groups, particularly small businesses, from the return in 2010 of the 36 and 39.6 percent brackets for those earning $250,000 or more. The Senate also adopted several amendments that would make it harder to enact some of the President’s revenue proposals. We’re fairly confident these amendments will be dropped in conference. But, as with the estate tax, the votes on some of these amendments show us we have work to do to persuade members that some revenue increases must be part of the equation for restoring fiscal responsibility and improving fairness in the tax code.
Friday, April 10, 2009
$350,000 to Local HIV/AIDS Programs
Twelve (12) organizations will benefit from grants from the AIDS Funding Collaborative (AFC) to support HIV/AIDS-related services and prevention programming in Greater Cleveland.
Grants to five organizations will help develop or expand programs that provide HIV testing. Through its grant, University Hospitals will become the first hospital in Northeast Ohio to initiate routine rapid HIV testing in its Emergency Room protocol. The only other Ohio hospital conducting such testing is University Hospital of Cincinnati.
For information about the grants, click here.
Congrats to those protecting tenants in foreclosures
Monday, April 06, 2009
Does this mean budget wonks are cool?
During the 10-minute segment, Orszag explained the difficulties of budget forecasting, the importance of addressing health care costs, and projected federal deficits. The interview highlighted some really important issues, and also made light of some of the extremely difficult challenges facing our country. What I found really funny (or sad) is the fact that Jon Stewart’s solution to reducing the deficit - ripping out the Department of Commerce - would only just begin to scratch the surface of the problem. The Commerce budget for 2010 is $13.8 billion total (which includes a huge $4 billion increase to conduct the census). The federal deficit for 2009 is expected to top $1.2 trillion.
If only the rest of us could make budgeting as interesting as the Daily Show...
Five Things You Need To Know This Week, April 6, 2009
Despite President Obama's call for federal employees to "do their part" and accept smaller-than-usual pay raises, Congress is considering a budget that could spend an additional $1.3 billion or more on pay for civilian federal workers.
2. The State
Progress made—and progress still needed—in implementing recommendations of the Ohio Medicaid Administrative Study Council are tracked in the new report, Managing Medicaid: An Update on the Report of the Ohio Medicaid Administrative Study Council, by Wendy Feinn. Community Solutions will continue monitoring the status of Medicaid in the coming months as part of our Public Policy and Advocacy agenda.
3. The Region
The Akron Film Festival begins Thursday in a new venue and has more workshops, as well as a selection of short and feature-length films. The festival will be based in the Akron Art Museum this year, a change from last year's presentations in the Summit Artspace building…And while the festival comes close on the heels of the larger Cleveland International Film Festival, the Akron event has different films and a different audience. For more information: http://www.AkronFilmFestival.com.
4. Community Solutions
We’ve taken a major step in our move toward a primarily electronic communications platform! After 50 years as our signature publication, the Northeast Ohio Media Guide, is now an online subscription service ($50/year). A user name and password are required to access the system…so subscribe today!
Quit-smoking hot lines are smokin' hot thanks to the largest-ever increase in the federal tobacco tax.
Friday, April 03, 2009
This Week in Washington - 4/3/09
THE BUDGET RESOLUTION IS MOVING TO THE NEXT STAGE
Both the House and Senate adopted their versions of the budget resolution on Thursday. The House resolution was adopted by a vote of 233-196. The Senate resolution was adopted by a vote of 55 to 43. Ohio’s delegation voted along straight party lines, with the Democrats voting “Yea” and the Republicans saying “Nay”.
The budget resolutions adopted by the House and Senate both promote a balanced approach to budgeting that will support the President’s key initiatives – reforming health care, addressing climate change, and strengthening education -- while taking important steps to strengthen the economy and restore long-term fiscal stability.
The Senate considered a number of difficult amendments. Fortunately, efforts to further reduce discretionary funding below the cuts made in Committee were defeated. However, the Lincoln-Kyl amendment in favor of cutting the estate tax below the 2009 parameters for very wealthy estates was adopted by a vote of 51-48. Despite our efforts, Senator Voinovich votes for this amendment. While this is very disappointing, the defeat was a very narrow one, which will be important when actual estate tax reform legislation moves in the next 12 months.
The Senate also agreed to a second estate tax amendment offered by Senator Durbin that creates a 60-vote point of order against putting the wealthy ahead of the middle class. That vote was 56 to 43 and essentially a “cover” vote for those who didn’t want to be seen putting the wealthy first. It was supported by some of the same Senators who voted for the Lincoln-Kyl amendment (but not by Senator Voinovich). Since the House budget resolution did not include a counterpart to the Lincoln-Kyl amendment, we will work to ensure that it is dropped in conference.
NEXT STEPS ON THE BUDGET RESOLUTION
Our main priorities for conference will be to preserve non-defense discretionary funding and revenue levels, and ensure that the budget resolution will facilitate consideration of key policies including health reform. As more analysis of the final House and Senate resolutions becomes available, we’ll distribute it to advocates.
PCSAO Ohio's Factbook Released
Time to resurrect the LBO?
I just had to smile, because that has been a key point made over and over (and over) by Dick Sheridan in State Budgeting Matters. Check out his story as Ohio’s first LBO director in the 1/15/09 issue, and see why he thinks it’s time for the state to resurrect the LBO. What do you think???
Wednesday, April 01, 2009
The April 1, 2009, edition of State Budgeting Matters is posted on our Website.
Senate estate tax amendment is harmful
We urge Ohio's Senators to oppose the Lincoln-Kyl amendment and any other amendment that would extend estate tax relief beyond the current 2009 law. Under current law, the estate tax will be fully repealed next year, only to revert to pre-2001 levels in 2011. Because of these provisions, Congress will have to consider the issue before the end of this year. This amendment forces a test vote on the estate tax – and will establish a precedent for the estate tax reform policy that could influence debate on actual estate tax legislation sometime in the next 12 months.
The Senate budget resolution assumes the President’s proposal to retain the 2009 parameters, which exempts up to $3.5 million for individuals, and $7 million (indexed) for couples from any estate tax. The rate would be 45 percent but the effective rate for most estates would be much lower because of other exemptions already in law.
The Lincoln - Kyl amendment would create a deficit-neutral reserve fund allow the estate tax exemption to be increased to $10 million per couple and $5 million per individual with a 35 percent rate.
Retaining the 2009 parameters as the budget resolution provides is already very generous – it costs $485 billion from 2012-2021 (the 10-year period it would be fully in effect). Increasing the exemption for individuals to $5 million and for couples to $10 million while reducing the rate to 35 percent costs an additional $245 billion for a total cost of $730 billion over the same period.
If offsets are available, they should be used to finance higher priorities like health care reform, Social Security reform, improving education, or reducing the deficit rather than for tax cuts that only help those with estates valued at more than $7 million per couple. Surely it would be unseemly now to cut the estate tax below its current levels with the economy in turmoil and millions of people are losing their jobs or otherwise struggling in the aftermath.