Last week AMWA became the latest organization – and the first representing water systems – to join Municipal Bonds for America, a coalition dedicated to preserving the tax-exempt status of municipal bonds.
Tax-exempt municipal bonds are a favored method of financing water infrastructure improvements because investors accept lower interest rates due to the exemption of their gains from federal taxation. This translates to lower financing costs for communities. But with Congress expected to consider comprehensive tax reform proposals this year, some lawmakers have already cited the municipal bond exemption as a provision that could be scaled back or eliminated altogether.
Municipal Bonds for America is working to educate lawmakers on the value to communities of tax-exempt bonds, and its mission statement explains that it is “committed to advancing proposals that protect the interest of taxpayers, investors, and state and local governments.” The coalition is housed at the Bond Dealers of America, an organization representing securities dealers focused on domestic fixed-income markets.
As part of the coalition, AMWA will be positioned to highlight examples of the value of the municipal bond exemption to public water systems, and therefore increase the attention to water infrastructure issues overall. Additionally, the coalition will supply data that AMWA can use to support its own advocacy efforts.