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Federal FY16 Budget and Tax Extenders Remain Unfinished Business

December 14, 2015

Congress began 2015 with a list of several "must-pass" items, including the federal budget for 2016, an overhaul of federal highway and transportation legislation, and a tax-extenders package to renew dozens of tax provisions that expired on December 31, 2014. While lawmakers have reached major agreements on some issues, two important budget and tax bills remain unfinished.

Federal FY16 Budget and Tax Extenders

Lawmakers spent the weekend negotiating two separate and extensive pieces of legislation: a comprehensive federal budget bill—the FY16 omnibus—and a tax bill that would not only extend the dozens of provisions that expired at the end of last year, but would make many of them permanent and add additional modifications. Furthermore, there is word that the deal will include a temporary delay in the implementation of the so-called "Cadillac Tax," the excise tax on high-cost health plans.

NACUBO will provide a comprehensive report when Congress votes on an agreement.

Every Student Succeeds Act

President Obama signed into law the Every Student Succeeds Act (ESSA) on December 10, reauthorizing the Elementary and Secondary Education Act (ESEA) and replacing its previous version, the No Child Left Behind Act. 

In developing the legislation, lawmakers were divided over the role of the federal government in K-12 education, testing and accountability standards, and federal funding formulas. The final bill requires states to establish challenging academic standards but gives each the authority to do so independently. The federal government is prohibited from providing incentives for a specific set of standards.

Education Secretary Arne Duncan, in a White House blog post, remarked that as a result of the legislation, "[a]ll students will be taught to high learning standards that will prepare them for success in college and career. More children will have access to high-quality preschool, delivering educational opportunity earlier for our nation's youngest learners."

With passage of the K-12 reauthorization legislation behind them, policymakers on the education committee will now focus more attention on the overdue reauthorization of the Higher Education Act. 

New Taxes Pay for Highway Programs

On December 4, President Obama signed into law a $305 billion highway bill agreement that authorizes funding for road and transportation projects for the next five years. The agreement follows what had been a years-long patchwork of temporary extensions and stop-gap measures.

The Fixing America's Surface Transportation Act, or the FAST Act, formally reauthorizes the 18.4 cents per gallon gas tax but also includes new "pay-fors," given lawmakers' reluctance to increase the gasoline tax. Some of the funding comes from new custom fees and passport rules for applicants who have delinquent taxes, dividends from the Federal Reserve Bank, and plans to contract out some IRS tax collection services.


Liz Clark
Senior Director, Federal Affairs