WHEREAS, for over 100 years, the federal government has exempted the taxation of interest that municipal bond holders accrue; and
WHEREAS, for state and local governments, tax-exempt municipal bonds are the most important tool available for financing critical infrastructure projects such as primary and secondary schools, hospitals, water and sewer systems, roads, highways and streets, public power facilities, and mass transit projects; and
WHEREAS, state and local governments are responsible for building and maintaining 75 percent of the nationís infrastructure, which is financed mostly by tax-exempt municipal bonds; and
WHEREAS, due to the municipal bond tax exemption, on average, state and local governments save up to two percentage points on their borrowing rates, a significant savings when you consider there is currently about $3.7 trillion in outstanding tax-exempt municipal bonds; and
WHEREAS, as a way to reduce annual federal deficits, proposals have been made that would place a 28 percent cap on interest earning from tax-exempt bonds or eliminate the tax exemption altogether; and
WHEREAS, according to a study by The United States Conference of Mayors, National League of Cities, and National Association of Counties, without the municipal bond tax exemption, it would have cost state and local governments $495 billion in addition to the $1.65 trillion of infrastructure investment that were made over the last decade,
NOW, THEREFORE, BE IT RESOLVED, that The United States Conference of Mayors strongly urges the Administration and Congress to preserve the current tax-exempt status of municipal bonds that has successfully provided trillions of dollars in low-cost financing for critical infrastructure investments that serve citizens in all states and local communities.
Projected Cost:† None