Hultgren, Ruppersberger Lead Bipartisan Effort to Protect Municipal Finance Tax Exemption
Washington, DC - Congressmen Randy Hultgren (IL-14) and C.A. Dutch Ruppersberger (MD-2) have sent a bipartisan letter to House leadership in support of municipal finance, a critical tool that helps local and state governments finance new schools, hospitals, roads, and fire stations. Joined by 122 of their colleagues (63 Democrats, 61 Republicans in total), 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. Click here to read how Rep. Hultgren has made defending municipal finance a priority while in Congress.
In his 2016 budget proposal, President 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.
“For more than a century, municipal bonds have enjoyed tax-exempt status and have been the primary method by which state governments and local municipalities finance public capital improvements and infrastructure construction,” the letter reads. “These projects are engines of job creation and economic growth, and it is imperative that their tax-exempt status remain unchanged.
“Over the last decade, municipal bonds have funded more than $1.9 trillion worth of infrastructure construction. This financing went to the construction of schools, hospitals, airports, affordable housing, water and sewer facilities, public power utilities, roads and public transit. In 2013 alone, more than 11,000 tax-exempt bonds financed more than $330 billion in infrastructure spending.
“…Eliminating or capping the current deduction on municipal bonds would severely curtail state and local governments’ ability to invest in themselves. It would increase borrowing costs to public entities and shift costs to local residents through tax or rate increases.
“…While we agree that we must reduce government spending and our country's unsustainable debt, we should not be eliminating a vital tool for job growth and economic development.”
To read the full letter signed by all 124 Members of Congress, click here.