Two House lawmakers are seeking support for a letter asking congressional leaders to reject any proposal that would limit the value of the tax-exemption for municipal bonds. To aid this effort, AMWA members are encouraged to ask their congressional representatives to add their names to the letter.
The bipartisan letter, authored by Reps. C.A. Dutch Ruppersberger (D-Md.) and Randy Hultgren (R-Ill.), comes in response to President Obama’s FY14 budget request that proposed capping the value of tax deductions and exemptions – including those for municipal bond interest – to 28 percent of total income. The letter argues this would lead investors to demand higher interest rates on municipal bonds and “increase borrowing costs to public entities and shift costs to local residents through tax or rate increases.”
Ruppersberger and Hultgren are hoping to discourage efforts to limit the tax exemption by attracting a significant number of House members to sign their letter. To this end, AMWA members may wish to contact their representatives and ask that they sign the Ruppersberger-Hultgren letter to preserve the municipal bond tax exemption.
AMWA members may also wish to request support for H. Res. 112, a bipartisan resolution from Reps. Lee Terry (R-Neb.) and Richard Neal (D-Mass.) marking the 100-year anniversary of tax-exempt municipal bonds. Like with the letter, attracting many cosponsors to the resolution would demonstrate support for maintaining the tax-exempt status of municipal bonds.
Earlier this month AMWA and the National Association of Clean Water Agencies (NACWA) sent an electronic alert to all members of the House of Representatives to encourage support for the Ruppersberger-Hultgren letter, and for the preservation of tax-exempt municipal bonds in general.