Tax Exemption for Municipal Bonds
As the new administration and Congress take office and highlight tax reform on their agenda, state and local governments have joined together to encourage continued support for tax-exempt municipal bonds amid fears that this key infrastructure finance tool might again be targeted as a source of revenue. NARC has joined with the Public Finance Network to urge Congress to continue the tax exemption for municipal bonds, which fund nearly 75% of all public infrastructure financing. Tax-exempt municipal bonds have financed more than $2 trillion in new infrastructure investments over the past ten years and are on a path to finance another $2 trillion in the next ten years.
Tax-exempt municipal bonds have been used to finance repairs to and construction of: roads, highways, and bridges; public transportation; seaports and marine terminals; airports; water and wastewater facilities; elementary schools, high schools, and colleges and universities; acute care hospitals; single- and multi-family housing; libraries; parks; town halls; electric power and natural gas facilities; and other public projects. Both NACo and NLC have included municipal bonds as part of their 2017 legislative priorities.