December 4, 2014

TO:                         Californians for School Facilities, Coalition for Adequate School Housing

FROM:                  Bob Canavan

SUBJECT:             Tax extenders/QZABs

 

Hope everyone had a good Thanksgiving.

 

The clock is ticking on the December 11 expiring FY 2015 Continuing Resolution.   Hopefully Congress will opt for an Omnibus Appropriations bill including the Labor, Health and Human Services and Education bill rather than a Continuing Resolution.

 

Tax Extenders:   Earlier this year the Senate Finance Committee approved the EXPIRE Act (S. 2260) to extend 55 expired tax provisions for two years.  The QZAB program with the positive modification reducing the local business contribution match from 10 % to 5% is included in the EXPIRE ACT.   The Ways and Means Committee approved individual bills permanently extending a handful of the expired tax provisions led by the research and development tax credit program. Californians for School Facilities support the EXPIRE Act provisions extending and modifying the QZAB program for inclusion in the Extenders package.

 

The Ways and Means and Finance Committees were negotiating their differences when Senate Majority leader Reid and Ways and Means Committee Chair Camp reached a deal to extend the majority of expired tax provisions including the Qualified Zone Academy Bond program for two years and make permanent the research and development, mass transit, deductions for state and local taxes, and the American Opportunity tax credits.  The extenders deal generated objections and a veto threat from the Administration because it did not make the earned income and dependent child tax credit permanent and its estimated $ 400 billion cost.

 

House Extenders Action: The House Ways and Means Committee is introducing The Tax Increase Prevention Act (H.R. 5771) a tax extenders package to retroactively extend the expired tax provisions which expired in 2013 for one year (2014).  The Rules Committee is scheduled to meet Tuesday.  H.R. 5771 is scheduled for House consideration Wednesday.  The Ways and Means Committee reports that the Joint Committee on Taxation estimates the one year $400 million Qualified Zone Academy Bond extension would have a total cost of $126 million over ten years (2015-2024).

 

Senate Extenders:  The Senate Finance Committee and the Senate will have the options of passing the House extenders bill with the one year extension or amending it with the Senate EXPIRE Act two year extension (2014-2015).   The EXPIRE Act two year extension would cover last year and the current fiscal year (2015).   Californians for School Facilities continues to support the EXPIRE Act extension provisions.

 

Please urge Congress to complete and pass an extenders package.  It is critical that expired tax provisions such as the Qualified Zone Academy Bond program which has cost effectively  renovated and repaired schools and classrooms in California and every state since 1998 be extended.   Action on the tax extenders in this Congress will restore financial stability to the extenders programs and could open the door for more comprehensive tax reform when the 114th Congress begins in January.

 

Thank you for your continued support for Californians for School Facilities and the Coalition for Adequate School Housing.