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What will Trump mean for Austin?

Wednesday, February 8, 2017 by Jack Craver

In addition to bracing for a flurry of laws proposed at the state legislature aimed at constraining the power of local governments, City Council is looking ahead at the first year in a decade in which its majority is at odds politically with every branch of the federal government.

At a work session Tuesday, Council members listened as the city’s lobbying team described how the policy priorities put forward by President Donald Trump and GOP leadership in Congress might impact the city.

The $1.5 million of funding that Gov. Greg Abbott withheld from Travis County last week over Sheriff Sally Hernandez’s policy on undocumented immigrants may only be the beginning of a national attempt to punish “sanctuary cities,” explained Ralph Garboushian, a lobbyist the city contracts with to represent it in federal affairs. He expects legislation aimed at undermining sanctuary policies to come in the form of both standalone bills and as riders to federal appropriations bills, he said.

Although the GOP controls both the White House and Congress for the first time since 2007, Garboushian noted some areas of discord both among Republicans in Congress and between congressional leadership and the president that makes it hard to know what to expect.

Most notably, it’s still anybody’s guess what will happen to the Affordable Care Act, whose prompt death was promised by Trump and fellow Republicans throughout the 2016 campaign.

Council Member Ann Kitchen said she was most concerned about when and if the city should expect the end of the federal subsidies that have helped millions purchase health plans through the ACA marketplace. Council has made a priority of getting the uninsured to enroll in ACA plans, allocating funding in recent budgets to outreach efforts aimed at getting people to sign up.

The repeal of the health law, Kitchen told the Austin Monitor in December, would “lead to a huge increase in needs” that local government would be left to address.

Garboushian explained that Republicans in Congress are divided on how to proceed with repeal, noting that a number of conservative hardliners are set on scrapping the entire law as soon as possible while others are hesitant to push ahead with a plan that could lead to millions losing coverage.

Although Republicans could use a legislative technique known as “budget reconciliation” to push a bill through the Senate that would eliminate a number of the law’s key funding provisions, such as the subsidies and the mandate that individuals purchase insurance, Senate Democrats will most likely be able to block a broader bill that removes the requirement that insurers accept customers regardless of pre-existing conditions.

Republicans recognize, explained Garboushian, that those disparate parts of the law are inextricably linked and that removing one part could wreak havoc on the health care market.

“They’re setting up an unworkable situation,” he said. “They’ve identified replacements, but not any that would cover the same number of people at the same level of care. They’ve kind of boxed themselves in.”

The city should also be prepared for steep cuts to other social services, warned Garboushian. Although Trump campaigned in support of maintaining Medicare and Social Security, putting him at odds on those issues with House Speaker Paul Ryan, he appears to have left the door open to reductions in other programs, including Medicaid, food stamps and the Children’s Health Insurance Program.

Another lobbyist for the city, Jeff Booth, reported that the rumor on Capitol Hill is that the administration’s budget plans will be largely based on a proposal authored by the Heritage Foundation, which calls for big increases to defense spending and massive cuts to nondefense discretionary spending.

One area in which Austin may be able to benefit in the coming years relates to Trump’s stated goal to approve a major infrastructure plan, explained Booth. Discussions on the federal level about the creation of a national infrastructure bank might open up opportunities to get additional funding for I-35, for instance.

In addition, new Transportation Secretary Elaine Chao is a supporter of “outcome-based” rulemaking, which could bode well for city efforts to develop more innovative mobility policies.

“We now have the opportunity with data to tell a different story about how you want your freeways and your roads to function, focusing on the movement of the people rather than simply reaching a level of service for automobiles,” Booth said.

However, he noted, while Trump has described a wide range of targets of potential infrastructure improvements, including roads, bridges, ports and airports, “the one thing that is consistently omitted is anything related to transit.”

Finally, explained Garboushian, depending on how it is crafted, the major tax overhaul that congressional leaders are promising could end up posing an “existential threat” to cities. That’s because if Congress moves forward with the dramatic cuts in tax rates for individuals and corporations that its leaders have promised, it will be pressured to find other sources of revenue and may very likely target the current exemption on interest earned from municipal bonds.

If interest on municipal bonds is no longer tax-exempt, cities will be forced to offer higher interest rates in order for their bonds to remain attractive to investors, explained Garboushian, who called municipal bonds the “lifeblood of cities.”

While Trump said during a meeting with the U.S. Conference of Mayors in December that the municipal bond exemption was off the table, congressional leaders have not made similar commitments.

Of course, on a number of fronts, said Garboushian, it is unclear what Austin should expect from Trump.

“The president ran on an ambitious agenda,” he said, “but not a particularly detailed one.”

Photo by John Flynn.

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