The National Association of Counties (NACo) has embarked on a mission to remind our nation’s leaders of the singular importance of Federalism to the American system of government. We call this effort “Restore the Partnership.

Maintaining and increasing the financial partnership: Restore the Partnership means a renewed commitment to maintaining, restoring and increasing the financial partnership to our counties. NACo opposes any restrictions in the federal financing of Medicaid that shifts costs to states and localities and places further stress on systems of care. Specifically, Congress should extend the moratorium on the CMS rule restricting Medicaid payments to public providers and provide essential funding for programs such as PILT, CDBG, HOME, JAG, Homeland Security, WIA, transportation and water infrastructure development programs, and many other domestic programs that are the backbone of our ability to jointly provide for our citizens. Funding for the PILT program should be provided for at the fully authorized level of $350 million. Funding for the Community Development Block Grant (CDBG) formula program should be no less than $4.1 billion, with a goal of doubling the program over the next five years, and for the HOME formula grant program at no less than $2 billion. Funding for county programs has been in decline as a result of a lack of commitment to the partnership. NACo supports enhanced appropriations for these and other domestic programs.

Tax issues: NACo seeks the repeal of onerous legislation that is contrary to the principle of a sound federal-local partnership. We oppose the mandate contained in Section 511 of PL 109-222 requiring local government to collect a 3% withholding tax for goods and services contracts in order for us to send to the IRS. We also oppose the preemption of county telecommunications and other taxing authority and efforts to require county employees to collect federal taxes or enforce immigration policy. County employees should not be acting as IRS agents. Also, the deductibility of state and local taxes should be protected as well as interest on tax exempt bonds.

Reauthorize the Secure Rural Schools and Community Self-Determination Act/PILT Funding: Providing assistance to our rural counties is important in order to restore the partnership. Following the one-year extension for FY 2007 passed last year, NACo continues to advocate for a multi-year reauthorization. When and if it is approved, NACo will focus its work on a long term solution for the forest counties.

Farm Bill Reauthorization: Restore the partnership must include efforts in developing a farm bill policy that restores our rural communities and eases the burden on rural counties who are losing population, especially their youth, who are the link to future growth. NACo continues to support a robust rural development title as well as renewable energy programs and efforts to attract youth to production agriculture in the farm bill. Congress should also offer increased nutrition assistance, conservation programs and assistance to needy farmers.

Aviation Reauthorization: During the second session of the 110th Congress, efforts to restore the partnership should also focus on finalizing reauthorization of the federal airport and aviation programs, which should include a well-funded Airport Improvement Program with guaranteed funding from the aviation trust funds and increased funding for rural and underserved communities through the Essential Air Service and the Small Communities Air Service Programs.

Establish a Commission on Intergovernmental Relations: NACo supports congressional and administration action to establish a Commission on Intergovernmental Relations that would be a key in helping to restore the partnership. We will be working in a bipartisan and bicameral effort to secure passage of legislation to establish the Commission.

The nation’s counties stand ready to work with Congress and the administration on these and other issues important to counties.