Help Save Municipal Bonds!
On Tuesday, March 19, the House Ways and Means Committee will hold a hearing on federal tax provisions that affect local governments, including municipal bonds. NLC will be submitting testimony and attending the hearing.
In addition, this week, the Senate will take up a budget resolution containing language that could support either a 28 percent cap (as proposed by the Administration) or total elimination (as proposed by the Simpson-Bowles Commission) of tax-exempt financing.
Please call your Members of Congress and:
• Ask your Representatives to co-sponsor House Resolution 112, which former local elected officials, Representatives Lee Terry (R-NE) and Richard Neal (D-MA) introduced last week. Commemorating the 100-year precedent of the federal tax exemption of municipal bonds, the resolution reinforces the importance of these bonds to cities across the country.
• Ask your Senators to speak out during floor debate on the budget resolution in support of tax-exempt financing and to oppose any changes to this tool that would increase costs to taxpayers or decrease infrastructure investment.
NLC's recent report shows that if the 28 percent cap had been in place over the last decade, it would have cost state and local governments an additional $173 billion in interest expenses; and if the exemption had been fully eliminated it would have cost them $495 billion over that same time.
Tax-exempt bonds have been in place for 100 years. This system of financing is a great example of how the partnership between the federal, state and local government should work. It has proven to be a low-cost efficient way for local governments to finance schools, hospitals, roads, water and sewage systems, transit systems and other critical infrastructure.