Hultgren, Ruppersberger Lead Bipartisan Effort to Keep Municipal Bonds Tax-Exempt
WASHINGTON, DC - Congressmen Randy Hultgren (IL-14) and Congressman C.A. Dutch Ruppersberger (MD-2) have sent a bipartisan letter to House leadership in support of a critical tool that helps local and state governments finance new roads, schools, hospitals, fire stations and more. Joined by 137 of their colleagues, the letter asks leadership to reject any proposal to cap or eliminate the deduction on tax-exempt municipal bonds used to finance the vast majority of infrastructure projects in America’s communities.
In his budget proposal for 2014, President Barack Obama suggests limiting the value of tax benefits for top-earning investors in municipal bonds to 28 percent, down from the current 35 percent. Some federal legislators have proposed eliminating the tax exemption on municipal bond interest altogether.
“Creating jobs and economic growth must be our top priority. Municipal bonds have been indispensable in Illinois and across America in financing infrastructure projects—projects that create jobs and sustain economic growth,” said Congressman Hultgren. Adding, “The President’s proposal to cap deductions would only raise borrowing costs and limit these vital projects and ultimately add another hindrance on economic recovery.”
“With the federal government already needing to tighten its belt and Illinois own state budget crisis, local governments won’t be able to rely on past forms of infrastructure funding. Maintaining the tax exemptions and preserving local governments’ access to the capital markets is one of the best ways to ensure that necessary programs and improvements continue. We have to recognize the importance of these bonds to our counties and towns,” added Hultgren.
“As a former county councilman, county executive and president of the Maryland Association of Counties, I understand that tax-exempt bonds are the most efficient way to fund critical infrastructure jobs that have created hundreds of thousands of jobs in Maryland and across the country,” said Congressman Ruppersberger. “If the federal income tax exemption is eliminated or limited, states and localities will pay more to finance projects, leading to less infrastructure investment and fewer jobs. Worse, they will be forced to shift costs to their main revenue source – property taxes – hitting the already-suffering real estate market and the wallets of American homeowners.”
Municipal bonds have funded more than $1.9 trillion worth of essential infrastructure. Financing went to the construction of schools, hospitals, water, sewer facilities, public power utilities, roads and public transit over the last decade. Last year, more than 6,600 tax-exempt bonds financed over $179 billion worth of infrastructure projects.
To read the full letter signed by all the members of Congress, click link below.