Washington DC Update - September 2020
While the climate has monumentally shifted in DC since our last update due to the death of Supreme Court Justice Ruth Bader Ginsburg and the ensuing fight to fill that seat, much of the policy considerations remain in similar positions. Democrats and Republicans have not made any further progress in a deal on the next round of COVID-19 relief. Democrats have released a new $2.2 trillion relief package, feeling pressure from some House members. This new version of the HEROES Act merges new priorities for small businesses, airline workers, and education with much of the content from the $3.5 trillion version of the HEROES Act passed by the House in May. White House and Senate Republicans haven’t moved from their position of a $1.5 trillion topline number so this new package, if taken up and passed in the House, is also dead on arrival in the Senate. With the new fault lines around the Supreme Court seat looking to deepen over the next month, and the existing ones from the approaching election not getting better, it’s hard to see a clear path forward for a relief package before the election.
On the annual spending front, what appeared to be consensus early in the month on a continuing resolution (an extension of existing spending programs at current levels) turned out to not be the case. Congress instead has gone down to the wire, with the existing spending authority expiring at midnight on September 30th. The House has already passed the continuing resolution that would extend spending authority to December 11th, but the Senate is waiting to pick it up on the evening of the 29th. The House intends to go into recess in early October until after the election. The Senate had intended to do so the following week, but will now likely stay in session longer to hold hearings on the President’s nominee for the high court seat.
At the federal agency level, some good news as EPA released its long-awaited proposed update to the Financial Capability Assessment (FCA) Guidance. This is the agency’s two-part approach for evaluating a municipality’s financial capability to implement projects. The first part calculates the cost per household for the service area of the utility using data collected by the U.S. Census Bureau. The second part evaluates the municipality’s overall fiscal health and local demographics relative to national norms. These results are brought together in a matrix that evaluates the burden a proposed project imposes on the municipality (high, medium, or low). The combined two parts are called the Financial Capability Assessment. EPA uses these criteria when negotiating consent decrees to help calculate how long a utility has to implement the required changes. This current model has received quite a bit of criticism in recent years and was the subject of a comprehensive critique from the National Academy of Public Administration three years ago. Last year AWWA, WEF, and NACWA also issued a report with a new analytical framework to guide FCA. In this new approach, EPA sets out two alternative general approaches for assessing a community’s financial capability to carry out CWA control measures. The first alternative is the existing two-step method, but with expanded consideration of costs, poverty, and impacts on lower-income populations. The second alternative is allowing the community to develop its own dynamic financial and rate model that looks at the impacts of rate increases over time on utility customers.
In the states, the nation’s primary elections finally concluded his month so now we finally have the picture of what’s happening at the state level. Eleven state governorships are up this year, with nine governors running for re-election and two open seats (Montana and Utah). In state legislatures, 5,876 seats are on the ballot across 86 legislative chambers in 44 states nationwide. It’s shaping up to be a good year for Democrats, as Republicans represented the majority of incumbents that opted for retirement, were term-limited, or defeated in primaries. About 38 percent of Democrat-held seats are going uncontested this cycle, as are about 33 percent of Republican-held seats. While every year is an important year for state legislative races, the impending round of redistricting following this year’s census makes means the winners of this year’s races will largely be drawing the political boundaries for the next decade.