Two of Capitol Hill’s leading advocates for preserving tax-exempt municipal bond interest last week announced the formation of a new congressional caucus that will help carry the message.
Organized by Reps. Randy Hultgren (R-Ill.) and Dutch Ruppersberger (D-Md.), the Municipal Finance Caucus will work to bring greater attention to state and local finance issues and promote efforts to retain full tax-exempt status for municipal bonds.
According to a statement from Rep. Hultgren, the caucus will focus on issues such as “protecting the tax exempt status of municipal debt, understanding how financial regulations treat such debt, and ensuring there is a robust market for municipal securities.”
In recent years Reps. Hultgren and Ruppersberger have organized letters to congressional leaders expressing support for maintaining tax-exempt municipal bond interest. But while many members of Congress share this position, President Obama’s FY17 budget request would impose new taxes on municipal bond interest earned by individuals in the highest tax brackets – a policy that would likely increase water infrastructure financing costs borne by local communities.