Budget and Revenue Standing Committee

National Conference of State Legislatures
The Council of State Governments
National Association of Counties
National League of Cities
The United States Conference of Mayors
International City/County Management Association

The Honorable Harry Reid
Majority Leader
United States Senate
S-221, U.S. Capitol
Washington, D.C. 20510 The Honorable Nancy Pelosi
Speaker of the House
United States House of Representatives
H-232, U.S. Capitol
Washington, D.C. 20515

The Honorable Mitch McConnell
Minority Leader
United States SenateS
H-230, U.S. Capitol
Washington, D.C. 20510 The Honorable John Boehner
Minority Leader
United States House of Representatives
H-204, U.S. Capitol
Washington, D.C. 20515

RE: H.R. 3221, Section 604 ( Download PDF Version)

As individuals and families face the consequences of the sub-prime mortgage crisis, state and local officials are leading the way to help homeowners avoid or recover from foreclosure. They also welcome and are encouraged by federal efforts to stem the effects of the crisis. Averting the negative effects of the nation’s economic downturn must be a shared objective among all levels of government.

We generally support federal efforts to help homeowners, including legislation such as H.R. 3221, the “Housing Foreclosure Prevention Act.” Section 604 of both the House and Senate versions of H.R. 3221 would provide relief to homeowners that do not itemize their income tax deductions by permitting a standard deduction for state and local property taxes. This relief is unconditional in the House version and meets with our approval. The Senate version makes the deduction available only to those taxpayers living in areas that have not raised property taxes this year.

We urge you to support the House version of Section 604 as you seek to complete conference committee negotiations. The Senate’s condition is offensive to basic federalism principles. It overlooks the fiscal decisions state and local officials make to balance operating budgets, protect public safety and health, address problems related to the subprime mortgage crisis, maintain our infrastructure and provide education for our children. Also, it unnecessarily creates winners and losers among taxpayers who do not itemize on the federal form.

We look forward to continuing our work with you on these and other issues requiring intergovernmental cooperation.