Members of Congress also got involved with circulating communications in support of tax-exempt municipal bonds this month, as a letter signed by 156 members of the House of Representatives on March 8 called for preserving tax-exempt bonds as lawmakers begin contemplating reforms to the federal tax code. The letter cited drinking water infrastructure as one of the beneficiaries of the tax exemption.|
Reps. Randy Hultgren (R-Ill.) and C.A. Dutch Ruppersberger (D-Md.), the co-chairs of the House Municipal Finance Caucus, organized the letter. It noted that “nearly two-thirds of core infrastructure investments in the United States are financed with municipal bonds,” and pointed to drinking water infrastructure as one of these “pro-growth investments which spur job creation, help our economies grow, and strengthen our communities.”
The letter was sent to the leaders of the House Ways and Means Committee. The committee’s Republican leaders are in the early stages of developing a comprehensive tax reform bill that supporters hope will eliminate or reduce a number of exemptions and deductions in order to reduce overall tax rates.
“Municipal bonds are a lifeline to local communities looking to expand a hospital or repair their infrastructure,” Rep. Hultgren said in a separate statement. “We should preserve this Main Street financing tool for municipalities intimately connected to the needs of their communities.”
Rep. Hultgren’s statement also cited data shared with his office by AMWA and the National Association of Clean Water Agencies to demonstrate the costs of eliminating the exemption. The congressman’s office said eliminating the exemption would cause cities and towns in Illinois to pay an additional $262.3 million in debt service costs for water and wastewater infrastructure projects financed in 2016, a 25 percent increase. These figures were borrowed directly from AMWA’s analysis.