Municipal market priorities like tax-exempt advance refunding could be tucked into new spending bills if they fail to make it into a revived Build Back Better bill.
Government Finance Officers Association lobbyist Emily Brock outlined the legislative possibility Monday to debt committee members at the GFOA’s winter meeting.
The muni market’s agenda, including the restoration of tax-exempt advance refunding, expanded bank qualified debt and direct-pay bonds, was
But after President Biden floated the idea of slicing the reconciliation packages into smaller bills, lobbyists said that may
And if that doesn’t work, it’s possible the proposals could make it into new spending bills, either another continuing resolution or a funding bill for the piece of the Infrastructure Investment and Jobs Act that remains unfunded, Brock said.
“We have to decide where to hitch a ride,” she said. Build Back Better is “probably our best shot,” Brock added. The “second best” would in tax titles attached to a continuing resolution that funds the government — the current CR expires on Feb. 18 — or an additive bill that funds the IIJA, she said.
“So there are a lot of considerations; a lot of reaching back out” to the market’s “champions” like House Ways and Means Committee Chair Rep. Richard Neal, Brock said.
Neal’s committee staff “assured us that Neal is still very interested in advancing tax titles for the muni market,” she said.
Lawmakers that point to the billions of pandemic aid that has flowed to issuers should be reminded that those funds, while substantial, will largely run out after the next five years, and that tax-exempt advance refunding is a long-term market issue, Brock said.
The lobbyists are facing a June deadline, as most lawmakers at that point will begin heavy campaigning ahead of the midterm elections, Brock said. “We’ll be talking with our champions before June,” she said. “If they don’t do something at the end of June, it’s not going to get done."
Meanwhile, the GFOA warned issuers it could be months or even next year before the Infrastructure Investment and Jobs Act money begins to flow to local governments.
“We’re looking at a six- to 18 month-window before money becomes available” from the IIJA, also known as the Bipartisan Infrastructure Law, Brock said.
Roughly half of the $1.2 trillion
After that, the states need to pass their own appropriation bills for the nonfederal match, Brock said.
The new law features dozens of new programs, and the federal agencies overseeing those programs still need to ramp up hiring, said Michael Belarmino, senior policy advisor for the GFOA’s Federal Liaison Center.
“It’s not going to be as quick as with the previous [pandemic relief], but there was greater sense of urgency to get that funding out, as it was trying to respond to the pandemic," Belarmino said. “You’ve got to be patient.”
