A “Dear Colleague” letter asking House of Representatives leaders to preserve the tax exemption for interest earned on municipal bonds garnered the signatures of 138 lawmakers last month – nearly one-third of the House chamber.
The letter, circulated by Reps. Dutch Ruppersberger (D-Md.) and Randy Hultgren (R-Ill.), asked House leaders to reject any proposal to cap or eliminate the municipal bond tax exemption during future tax reform debates. President Obama’s FY14 budget plan proposed limiting tax exemptions on municipal bond interest, and the issue will likely arise again if Congress considers comprehensive tax reform legislation later this year.
Additionally, this week AMWA and the National Association of Clean Water Agencies will release a white paper estimating the cost implications to water and wastewater systems of limiting or abolishing tax-exempt municipal bonds. Employing several real-world examples of recent municipal bond sales to fund water and wastewater infrastructure, the report estimates how much communities’ interest payments would increase under the various reform proposals. It will be used to advocate on Capitol Hill in favor of preserving municipal bonds in their current form. AMWA members should watch for an email with an electronic copy of the white paper on Wednesday.