Cities’ Federal Call to Action: Coronavirus Relief, Transportation Reauthorization & Infrastructure Funding

“To date, most cities have been left out of federal proposals to provide relief for COVID-19 related expenditures, revenue losses and impacts to services,” said Becky Taylor, GMA Research & Federal Relations director. “Obtaining this funding has been GMA’s top legislative priority since March.”

“Cities are implementing and considering layoffs and furloughs, which will make it even more difficult to maintain service levels and keep first responders on the front lines where they are most needed. Local governments are not only large employers themselves and generators of economic activity, they also provide the necessary permits and approvals for commercial, industrial, manufacturing and all private sector development,” she said.

GMA Executive Director Larry Hanson shared that, “Cities are not asking for a bailout. They are asking for   a lifeline that provides fair and equitable funding to municipal governments at levels appropriate to their needs, with reasonable guardrails and minimal regulatory or administrative burdens to the states,” he said.
 “Federal investment in local governments will ensure our nation’s ability to recover from this crisis and for our country to emerge healthy, safe, strong and poised for prosperity.”

Transportation Reauthorization
On July 1, the House passed Senate Bill 2, the Moving Forward Act, its version of an infrastructure bill. The bill includes authorization of $494 billion in surface transportation over the next five years (passed by House T&I in June as the INVEST Act), as the FAST Act is set to expire Sept. 30. The $494 billion reauthorization proposal, “Investing in a New Vision for the Environment and Sur- face Transportation in America,” will serve as the base bill for the House leadership’s long-awaited “Moving Forward” infrastructure bill. The Senate Environment and Public Works Committee approved the highway portion version of the transportation bill on a bipartisan basis in 2019. Still, Congress has not determined how to pay for the next transportation bill.

Infrastructure Funding: Moving Forward Act

Highlights of the Moving Forward Act include:

Environment: Renewed funding for the Drinking Water State Revolving Fund; funds for municipal sewer overflow and stormwater reuse  grants;  funding for resilience and pre-disaster mitigation programs; reauthorization of the Energy Efficiency and Conservation Block grant, promoting renewable energy development and deployment and incentivizing EV and alternative fuel vehicles and related infrastructure.

Broadband: $80 billion to build or upgrade broadband infrastructure not only in areas without any broadband, but also in areas with insufficient, asymmetrical, or high-latency service; creation of a Broadband Infrastructure Financing Innovation Program, similar to the WIFIA program for water infra- structure, to provide financing for broadband projects; overturns state preemption of municipal and public-private broadband ownership and operation and provides a tax credit for public or  public-private broadband provision through 2028; and a new grant program for rural development that incorporates broadband infrastructure. It also authorizes $12 billion for the rollout of Next Generation 9-1-1 technology in communities.

Bonds, Tax Credits and Financing: The bill pro- poses to reinstate advanced refunding of bonds; makes it easier for smaller issues of tax-exempt debt (defined as issuing $10 million or less in tax-exempt debt annually) to get financing for capital improvement projects by being able to sell debt to small, regional banks. The bill raises the threshold for small issues from $10 million to $30 million to help smaller issuers that face increased costs of issuing debt due  to the lack of economics of scale; the bill also makes permanent the New  Markets  Tax  Credit  (NMTC) and increases the credit from 20 percent to 30 per- cent temporally and then phases it back down to 20 percent again. This credit helps spur investment in lower-income population tracts in the U.S., driving investment to areas where it typically would not be found. Finally, on the financing front, the bill provides a new direct-pay bond, similar to the Build America Bonds from 2009-2010.

“GMA estimates cities will need approximately $20 billion in infrastructure needs over the next five years for water and sewer, transportation, public safety and other projects,” said Taylor. “We are urging city officials to contact members of Congress to share your local needs and urge federal partnerships for infrastructure and COVID-19 relief for cities of all sizes.”