Administrative Update - March 2019

Administrative updates on trends, legislation, regulations, and legal matters affecting local governments.

ARTICLE | Mar 29, 2019

Trump Administration Releases 2020 Budget Proposal 

The Trump Administration released its 2020 budget request on Monday, March 11, proposing major cuts to federal government spending. While the cuts are unlikely to become reality - the executive branch's budget proposal is not a binding document, and Congress, which retains the "power of the purse," has rejected or modified many of the President's previous requests - the budget is an important signal of the administration's priorities and suggests a major finding fight to come in October when the federal government fiscal year ends.

Among the proposals impacting local governments, the budget proposes the elimination of the HOME Investments Partnership program, Community Development Block Grants (CDBGs), the Choice Neighborhoods Initiative, and the National Housing Trust Fund. These flexible programs allow states and localities to rehabilitate and build affordable rental housing, repair and improve infrastructure such as sewers and roads, promote economic development in distressed communities, and provide essential services to low-income youth, seniors, and others. The Center for Budget and Policy Priorities has developed a table which shows the potential cuts in HOME and CDBC funding by state - you can access it here.

Governing Magazine's Liz Farmer outlines six things state and local governments should consider when reviewing the administration's proposal in this useful article



Disasters: A Tipping Point

ICMA and the Big 7 national associations of state and local governments met with the White House Office of Intergovernmental Affairs and the National Security Council last week to discuss the imperative of disaster resilience. The White House leaders noted that the country is at a tipping point with the federal government now dealing with seven large recovery efforts simultaneously. At the same time, 25% of all counties have had disaster declarations in each of the past four years.

There was consensus that all levels of government need to maximize resources to develop greater resilience to all types of disasters, from flooding and wildfires to cybersecurity, public health, and the energy grid. Key takeaways:

  • Federal agencies need to do a better job of streamlining programs geared to recovery; state-local streamlining is also needed so that funds reach communities and residents in a more timely way.
  • Local governments can help improve the system by identifying points of conflict in grant requirements between different federal agencies or where more flexibility is needed.
  • Opportunity Zones may be a vehicle for disaster recovery efforts (e.g., housing).
  • The Disaster Recovery Reform Act of 2018 sets aside 6% of disaster recovery funds for pre-disaster mitigation; grant guidance is expected to be finalized in a few months.
  • Congress has allocated $125 billion in supplemental funding for disaster recovery to some 90 federal programs involving 20 agencies and departments.
  • A challenge for communities that have lost much of their tax base after a disaster is how to fund the local match that is required to receive certain federal grants; the White House suggested that loan programs from their state government could be tapped, such as the EPA Revolving Loan Program.

ICMA has advocated for a more networked approach to emergency management ever since Hurricane Katrina caused widespread destruction in 2005. Recently, ICMA published Disaster Recovery Essentials and worked closely with the National Association of Counties, North Carolina state associations, and federal partners to provide strategic guidance and practical information needed by communities dealing with Hurricane Florence recovery challenges. A December 12 webinar that includes all presentations and links to resources can be accessed here.



Public Comment Period Now Open for DOL Overtime Salary Threshold

On March 7, 2019, the U.S. Department of Labor (DOL) has issued a Notice of Proposed Rulemaking (NPRM) that it estimates would convert more than one million now overtime-exempt workers to non-exempt, overtime-eligible employees.  Currently, the so-called “white collar” exemptions under the Fair Labor Standards Act (FLSA) provide that employees who are paid a salary of at least $455 per week ($23,660 per year) and primarily perform executive, administrative, or professional duties (the “job duties test”) need not be paid overtime. 

Under the proposed rule, the salary threshold necessary to qualify for a white collar exemption under federal law would be increased approximately 50% to $679 per week ($35,308 annually). If adopted, this rule will mean that employees who are now exempt under the executive, administrative, or professional (EAP)  exemptions, but earn a salary less than $35,308 annually, will become non-exempt and will have to be paid their hourly rate plus an overtime premium for all time worked in excess of forty hours in a workweek. To avoid exposure to overtime pay for these employees, employers would be required either to increase the salary of each of these employees to at least the new threshold – potentially a nearly $12,000 per annum increase – or manage the employee’s schedule closely to ensure they do not work overtime. 

The 60-day public comment period is now open. Once comments are received and reviewed, the DOL will publish a final rule (likely around January 2020).

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