Legislative Affairs

The Senate will vote on its fiscal year 2018 (FY18) budget resolution late this evening or early tomorrow, after officials finish voting on dozens of amendments to the proposal. POLITICO says more than 160 amendments have been filed, although many won't likely make it to the floor. However, "in the end, the budget is expected to easily pass, giving Republicans much-needed momentum in their tax reform efforts." Contrary to the typical federal budget process, the resolution is not being passed with federal spending in mind, but as a vehicle for tax reform.

Republicans plan to pass a budget resolution to achieve a partisan tax reform agenda via a process called "budget reconciliation." It allows Republicans a chance to pass tax legislation that cannot be filibustered and doesn't need Democrats' support. The New York Times says the resolution instructs several congressional committees to come up with "changes in laws… that would increase the deficit by not more than $1.5 trillion over a decade," giving Republicans leeway to "pass a $1.5 trillion tax overhaul with only Republican votes."

While a GOP tax package is still in progress, one proposal being discussed is eliminating or capping the State and Local Tax (SALT) deduction. ASBO International has joined the Americans Against Double Taxation to advocate for preserving the SALT deduction, since eliminating/capping it would upend state and local financing. Removing the deduction would reduce incentives for taxpayers to pay higher local taxes for public goods (since they could no longer deduct them from their federal taxes), thus pressuring state/local governments to cut local taxes. Cutting taxes reduces the revenues available for public schools, which rely on property and other local/state taxes for funding.

As Congress negotiates tax reform over the coming weeks, we invite you to join us and contact your elected officials about preserving the SALT deduction. For more information and advocacy talking points on this issue, please read this blog.

The Senate will vote on its fiscal year 2018 (FY18) budget resolution late this evening or early tomorrow, after officials finish voting on dozens of amendments to the proposal. POLITICO says more than 160 amendments have been filed, although many won't likely make it to the floor. However, "in the end, the budget is expected to easily pass, giving Republicans much-needed momentum in their tax reform efforts." Contrary to the typical federal budget process, the resolution is not being passed with federal spending in mind, but as a vehicle for tax reform.

Republicans plan to pass a budget resolution to achieve a partisan tax reform agenda via a process called "budget reconciliation." It allows Republicans a chance to pass tax legislation that cannot be filibustered and doesn't need Democrats' support. The New York Times says the resolution instructs several congressional committees to come up with "changes in laws… that would increase the deficit by not more than $1.5 trillion over a decade," giving Republicans leeway to "pass a $1.5 trillion tax overhaul with only Republican votes."

While a GOP tax package is still in progress, one proposal being discussed is eliminating or capping the State and Local Tax (SALT) deduction. ASBO International has joined the Americans Against Double Taxation to advocate for preserving the SALT deduction, since eliminating/capping it would upend state and local financing. Removing the deduction would reduce incentives for taxpayers to pay higher local taxes for public goods (since they could no longer deduct them from their federal taxes), thus pressuring state/local governments to cut local taxes. Cutting taxes reduces the revenues available for public schools, which rely on property and other local/state taxes for funding.

As Congress negotiates tax reform over the coming weeks, we invite you to join us and contact your elected officials about preserving the SALT deduction. For more information and advocacy talking points on this issue, please read this blog.

House Republicans unveiled their tax reform proposal yesterday, which is scheduled to be marked up by the House Ways and Means Committee next week. H.R. 1, the "Tax Cuts and Jobs Act," proposes a sweeping tax overhaul with major changes for businesses and individuals. Below are highlights of the proposal's education-related provisions from POLITICO, but please stay tuned for a blog next week with more information.

The House GOP tax reform proposal… 

• Would split the state and local tax (SALT) deduction instead of completely eliminating it. Taxpayers could deduct local property taxes up to a cap of $10,000 from federal taxes, but sales and income tax deductions would still be eliminated.
  • Nonprofit organization Education Reform Now estimates this change would cut local public education funding by $250 billion over the next decade. See our statement on SALT here.
    
    
• Would end Coverdell Education Savings Accounts (ESAs) while expanding 529 college savings accounts to also cover elementary and secondary education.
  • There would be no income restrictions or contribution limits for the 529 plans, and parents can use funds to pay for public, private, and religious school tuition (i.e., it allows private school vouchers).
    
    
• Would repeal a tax deduction for teachers to claim up to $250 for money spent out of pocket on classroom supplies/instructional materials.
  
  
• Would increase the child tax credit from $1,000 to $1,600, and block undocumented families from claiming the tax credit (as well as tax credits for college expenses).
  
  
• Would repeal deductions for higher education expenses, including college tuition, student loan interest, and employer-provided educational assistance programs.

The Senate will vote on its fiscal year 2018 (FY18) budget resolution late this evening or early tomorrow, after officials finish voting on dozens of amendments to the proposal. POLITICO says more than 160 amendments have been filed, although many won't likely make it to the floor. However, "in the end, the budget is expected to easily pass, giving Republicans much-needed momentum in their tax reform efforts." Contrary to the typical federal budget process, the resolution is not being passed with federal spending in mind, but as a vehicle for tax reform.

Republicans plan to pass a budget resolution to achieve a partisan tax reform agenda via a process called "budget reconciliation." It allows Republicans a chance to pass tax legislation that cannot be filibustered and doesn't need Democrats' support. The New York Times says the resolution instructs several congressional committees to come up with "changes in laws… that would increase the deficit by not more than $1.5 trillion over a decade," giving Republicans leeway to "pass a $1.5 trillion tax overhaul with only Republican votes."

While a GOP tax package is still in progress, one proposal being discussed is eliminating or capping the State and Local Tax (SALT) deduction. ASBO International has joined the Americans Against Double Taxation to advocate for preserving the SALT deduction, since eliminating/capping it would upend state and local financing. Removing the deduction would reduce incentives for taxpayers to pay higher local taxes for public goods (since they could no longer deduct them from their federal taxes), thus pressuring state/local governments to cut local taxes. Cutting taxes reduces the revenues available for public schools, which rely on property and other local/state taxes for funding.

As Congress negotiates tax reform over the coming weeks, we invite you to join us and contact your elected officials about preserving the SALT deduction. For more information and advocacy talking points on this issue, please read this blog.