July | August 2017


 

 

 

 

 

President’s Budget Plan Provides Some Benefits to States

By Justin Fisk, CSG Washington, D.C., Office
President Obama continued to build on the theme of his State of the Union speech—middle class economics—in his $3.99 trillion budget proposal. It calls for an end to fiscal austerity and proposes higher spending levels for domestic and military spending to be paid for by higher taxes on the wealthy and large corporations.
The budget proposes significant reforms in infrastructure, workforce development and education. The president’s budget also proposes the creation of new federal-state partnerships and modifies several existing programs.
Here are some of the key initiatives from the president’s budget proposal that will impact states.
Infrastructure: The Highway Trust Fund, which states rely on for half their highway and bridge spending, is expected to be insolvent by May 31. The president’s budget provides $478 billion in additional funding for the Highway Trust Fund and reauthorizes the fund for six years. Obama proposes to pay for this provision by enacting a one-time 14 percent tax on U.S. companies’ $2 trillion of untaxed foreign earnings. More on the federal government’s infrastructure plan can be found here: http://www.
whitehouse.gov/the-press-office/2013/02/20/fact-sheet-president-s-plan-make-america-magnet-jobs-investing-infrastru
.
To help finance new infrastructure projects, the president’s budget proposes the new America Fast Forward Bond program, which will provide state governments an optional taxable bond alternative to the traditional tax-exempt bonds. The bonds are designed to be as affordable to issuers as tax-exempt bonds, and the federal government will use the proceeds to finance government capital projects. Obama also proposes tax-exempt Qualified Public Infrastructure Bonds aimed at public-private ventures for future infrastructure projects. More on the federal government’s proposed bonds can be found here: http://www.whitehouse.gov/the-press-office/2013/02/20/fact-sheet-president-s-plan-make-america-magnet-jobs-investing-infrastru.
Workforce Development: The president plans to take steps to encourage states to adopt paid leave policies. Through the Paid Leave Partnership Initiative, the federal government would provide funding for the initial setup and half the benefit costs for up to five states. In addition, the federal government’s Department of Labor would also offer competitive grants to states that need help with the start-up costs to launch paid leave programs through the State Paid Leave Fund. More on the federal government’s initiatives regarding paid leave can be found here: http://www.whitehouse.gov/the-press-office/2015/
01/14/fact-sheet-white-house-unveils-new-steps-strengthen-working-families-acr
.
The president’s budget also includes $6.5 million for the Department of Labor to allow a limited number of states to implement state-based automatic enrollment IRAs or 401(k)-type programs.
Education: The president proposes the creation of the America’s College Promise, an initiative that creates federal-state partnerships to offer the first two years of community college free-of-charge. If all states participate, the White House estimates 9 million students would benefit. More on the America’s College Promise can be found here: http://www.whitehouse.gov/the-press-office/2015/01/09/fact-sheet-white-house-unveils-america-s-college-promise-proposal-tuitio.
In addition, the president’s budget supports the Preschool for All Initiative, which provides high quality preschool for all 4-year-olds from low- and moderate-income families. This would be paid for by an increase in tobacco taxes. In partnership with states, the president would provide $750 million to the Department of Education’s Preschool Development Grants, which aim to help more than 40 states develop high quality preschool programs. This is an increase from the 2015 fiscal year when Congress appropriated $500 million to the program, which helped 18 states develop their preschool programs. More on the federal government’s early learning initiatives can be found here: http://www.whitehouse.
gov//issues/education/early-childhood
.
Health Insurance: The budget proposal extends funding for the Children’s Health Insurance Program through 2019. Without Congressional action, the program will expire Sept. 30, leaving more than 8 million children without health insurance coverage. To pay for this provision, Obama would increase federal taxes on tobacco by 94 cents.
Environment and Carbon Pollution: The budget allocates $25 million to help states develop their Clean Power Plans. The budget also includes the Clean Power State Incentive Fund, a $4 billion incentive fund for states that choose to go beyond the Clean Power Plan. The National Oceanic and Atmospheric Administration will provide competitive Regional Coastal Resilience Grants for which state, local, tribal, private and nongovernmental organizations are eligible. These grants are meant to help improve climate change preparedness, response and recovery. More on the Clean Power Plan can be found here: http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule. More on the National Ocean Service’s grants can be found here: http://oceanservice.noaa.gov/
about/budget/nos-fy16-budget.html
.
Tax Exemptions: The president proposes capping the value of itemized deductions and other tax preferences to 28 percent for high income families. The limit would apply to all itemized deductions including the tax-exempt status of municipal bonds. More on the federal government’s proposed tax exemptions can be found here: http://www.whitehouse.gov/the-press-office/2015/01/17/fact-sheet-simpler-fairer-tax-code-responsibly-invests-middle-class-fami.
More on the president’s budget can be found here: http://www.whitehouse.gov/omb/budget/.
 
< Prev 1 | 2 | 3 | 4 Next >