Thursday, May 20, 2010

"Tax Extenders" Bill has stuff for transit, human services, too

House and Senate leaders have been preparing a must-pass bill to extend various expiring tax provisions. They're hoping to get this "extenders" bill passed by both chambers of Congress and onto Pres. Obama's desk in time for the Memorial Day weekend.

As drafted, this legislation will have provisions affecting a fair number of public and community transportation providers, including:

  • A six-month extension of the temporary Medicaid "FMAP" increases (i.e., the percentage of medical assistance that the federal government will reimburse to states' Medicaid programs) that were put into place in last year's American Recovery and Reinvestment Act (this is estimated to channel another $24 billion of federal funds into Medicaid);
  • A one-year extension of the "emergency contingency fund" created under the American Recovery and Reinvestment Act (ARRA) as an add-on to the Temporary Assistance for Needy Families (TANF) program , which will direct an additional $2.5 billion to states' TANF activities;
  • A one-year renewal of the special summer youth employment program created under ARRA, which will provide $1.0 billion to local workforce investment boards as a supplement to all their other youth employment activities this summer;
  • One-year extensions of New Markets Tax Credits, Empowerment Zones, and Renewal Communities, which are tax-favored opportunities to support reinvestment and revitalization of economically distressed communities (collectively, these extensions are estimated to provide for $1.4 billion in tax-favored community revitalization);
  • An additional allocation of $25 in lending authority for Recovery Zone Bonds, which were created under ARRA as a mechanism to provide quick, financially secure investments in local infrastructure projects; and
  • A two-year extension (and some tweaking) of the ARRA-created Build America Bonds program for financing infrastructure projects carried out by state and local governments, which should leverage an additional $97 billion between now and 2012.

These are not the extenders bill's highest profile features, although the Medicaid FMAP increase is its second-highest expense (top of the chart is the bill's proposed extension of federal unemployment benefits eligibility).

As drafted, the extenders bill does not address the treatment of transit benefits under Internal Revenue Code Section 132(f). Under ARRA, up to $230 per month of individuals' employer-provided fringe benefits for transit passes, vanpools, etc., are tax-free. This has pumped more than $1.1 billion into public transit since the enactment of ARRA. Unless Congress changes the tax code, the allowed value of tax-free transit drops to the pre-ARRA level of $115 per month on January 1, 2011, which will cut this revenue stream for transit in half. It's possible that advocates for this transit and vanpool benefit are carrying out other strategies in advance of the year's end dropoff.

Tuesday, May 18, 2010

Medicaid Expansion Under PPACA

[This is the first in an occasional series of postings about how health reform legislation is changing the landscape for coordinated public and human services transportation.]

President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law on March 23, 2010. With some further amendments as a result of the Health Care and Higher Education Reconciliation Act, which Pres. Obama signed into law on March 30, 2010, this is the legislation that the country has been calling "Health Care Reform."

Many aspects of PPACA affect the provision of transportation, but here's the most significant:

Section 2001 of PPACA establishes a new category of Medicaid eligibility. All persons with income at or below 133 percent of the federal poverty line who are not otherwise eligible for Medicaid or Medicare are entitled to participation in Medicaid. This will be a major shift for those states in which Medicaid coverage currently is provided only to persons with much lower income thresholds, in some cases as low as 17 or 24 percent of poverty. States are required to serve this expanded population on January 1, 2014, although they were allowed to begin serving this population as early as April 1, 2010. In fact, Connecticut and the District of Columbia already have made these changes, having moved thousands of their residents off non-federal coverage into their Medicaid programs.

People who fit this category of Medicaid eligibility (i.e., incomes up to 133 percent of poverty and not otherwise eligible for Medicaid or Medicare) are to be enrolled in “benchmark” or “benchmark equivalent” programs administered by state Medicaid agencies. “Benchmark” plans were first authorized by the Deficit Reduction Act of 2005 (DRA), and the Centers for Medicare and Medicaid Service (CMS) issued implementing regulations on April 30, 2010.

Two facts bear noting: one is that PPACA requires enrollment in benchmark plans, regardless of whether a state’s Medicaid agency was planning to provide benchmark-style coverage to any segments of its Medicaid population, and the second fact is that CMS regulations specifically require the provision of non-emergency transportation to all Medicaid enrollees, regardless of whether they are enrolled in a benchmark-style program of health coverage.

Estimates are that this expansion will add 20 million or more people to the country’s Medicaid rolls, in addition to the 40 million individuals currently enrolled in Medicaid programs. States have been concerned about the costs they would have to bear under this expansion. In response, PPACA establishes a special Federal Medical Assistance Percentage (FMAP) rate for this category of Medicaid coverage. In calendar years 2014 through 2016, the FMAP for this population is 100 percent; it scales downward in 2017 through 2019, and from January 1, 2020, onward, the FMAP for this category of Medicaid eligibility is 90 percent. In contrast, for enrollees traditionally enrolled in Medicaid, the FMAP varies by state, ranging from as low as 50 percent to no more than 83 percent (although all states had their FMAP increased temporarily under the American Recovery and Reinvestment Act).

At some point, CMS will be issuing regulations or other guidelines for this Medicaid expansion. However, since it does not become a requirement for states until 2014, they are likely to wait a bit, as there are numerous other Medicaid deadlines within PPACA that are much more urgent. For a fairly complete listing of PPACA implementation deadlines and other implementation milestones in the law, visit the Kaiser Family Foundation website.

Friday, May 14, 2010

Transit Money for Indian Country

Every so often, I tell friends or family that one of the things we do is provide technical assistance that promotes better transit for people on Indian reservations and in tribal communities across the country. This fascinates them, and then they realize that yes, indeed, there are a lot of critical mobility needs among our country's first inhabitants.

Under the current SAFETEA-LU legislation, there is a small program of competitive grants to help tribes (by which the federal government also includes Alaska Native villages, and other groups, governments and communities officially recognized by the Bureau of Indian Affairs [BIA]) plan, capitalize and operate public transit programs to serve their residents. It's one of the most competitive programs within the Federal Transit Administration's (FTA) budget.

Having said that, this is the announcement that tribal grant application writers had better fire up their computers right now, because FTA published an announcement on May 13 that this year's funding is now available for application.

The program is the Section 5311(c) Tribal Transit Program. Only BIA-recognized entities are eligible applicants. The federal share is 100 percent of project costs. There is a total of $15.1 million available for grants. Applications are due June 28, 2010. Because Section 5311(c) is a subset of the FTA program of transit grants for rural areas, BIA-recognized entities within urbanized areas (e.g., some tribal communities within certain portions of Arizona, New Mexico, California and Washington) are not eligible to apply for these particular grants.

The Section 5311(c) program is not the only avenue for funding transit projects in Indian Country. Tribes and tribal entities are eligible subrecipients under all of FTA's formula grant programs, including Section 5311 rural transit grants and Section 5307 urban transit grants, although these grants require tribes to participate in state- or metropolitan transit programs in ways that don't always mesh with the U.S. Government's stated policy of "government-to-government" relations with tribal nations. In addition, funds allocated to tribes through the Indian Reservation Roads program are allowed to be spent on planning, capital purchases and even operations of tribal transit programs, if those are identified as priorities in tribal transportation planning documents.

More information, including a history of past funding awards for the Section 5311(c) program, can be found on the FTA web site.

Thursday, May 13, 2010

Making the Year Complete

It may seem pro forma, but it's necessary. On May 13, the Federal Transit Administration (FTA) published a notice apportioning the entirety of its FY 2010 funds. Because of the previous short-term extensions of SAFETEA-LU, FTA grantees had only partial access to these funds until now.

The notice, and other information concerning FTA's apportionments and allocations, can be found on the FTA web site.