NLC Policy Unit Struggles with Social Security and Deficit Issues

Article excerpt

Social Security and taxation of goods and services sold over the internet dominated the issues of discussion as the NLC's Finance, Administration and Intergovernmental Relations Steering Committee met in Yuma, Ariz. Yuma Mayor Marilyn Young hosted the meeting. NLC President Brian O'Neill was a special guest at the meeting and provided the committee a briefing on current NLC activities.

Big Questions

On Social Security the committee struggled with the question, "How do we control the Cost of Social Security to ensure its solvency for future generations and prevent it from taking the federal deficit and national debt off the deep end?"

On Internet taxation the committee wrested with, "What do we say to the President, Congress, and the electronic commerce industry about the vast changes and threats to municipal revenue systems created by the internet and the unprecedented changes which are being wrought by online commerce?"

Policy Cycle Begins

Led by Chair Maxine Childress Brown and Vice Chairs Councilmember Joe Brooks, Richmond, Va. and Mayor Irene French of Merriam, Kan., the committee began the work assigned it by the FAIR Policy Committee at the Congressional City Conference. The three priority issues for the committee this year are: Social Security reform, tax base erosion, and federal preemption of local authority. The committee will be considering policy amendments and resolutions growing out of the Yuma discussions when it next meets in the fall in Rochester, Minnesota. Recommendations from the fall meeting will be presented for decision to the FAIR Policy Committee at the year-end Congress of Cities in Kansas City, Mo., thus completing the committee's annual policy development cycle.

Internet Put on the Fast Track

Rather than waiting for the Congress of Cities, the committee voted to forward policy modifications on the internet issue for action to the summer meeting of the NLC Board of Directors. The modifications indicate an interest in a comprehensive settlement that would lead to federal legislation imposing tax-collection duties on out-of-state vendors, whether they are selling by phone, mail-order, or internet.

While the recommended policy modifications do not commit NLC to any detailed negotiating stance, they do clearly acknowledge the need for federal legislation to require this tax collection of sales (use) taxes already owed by consumers under existing law, but impractical to collect directly Congressional action is needed to compel this collection under the Constitution's Interstate Commerce clause.

The committee, in its discussion, provided further informal guidance to staff and to FAIR Committee Vice-Chair Joe Brooks of Richmond, Virginia, who represents NLC on the Electronic Commerce Project of the National Tax Association along with NLC Transportation and Communication Committee member Joseph Hilson of Hayward, Calif.

The committee will revisit the internet issue at its fall meeting following Board action. By then Congress and the Electronic Commerce Project are likely to have developed the issues involved. Then, the FAIR Committee will likely vote on additional policy language or a resolution on this subject.

President O'Neil Adresses Group

NLC President Brian 0' Neill addressed the committee on the subject of the recently adopted NLC strategic plan and special committee that is being established to track the progress of implementation as this plan moves forward. …