In March, the Association of Metropolitan Water Agencies (AMWA) urged Congress to maintain tax-exempt municipal bond interest when lawmakers undertake a comprehensive tax reform bill, joining a letter sent to Capitol Hill organized by the U.S. Conference of Mayors’ “Don’t Mess With Our Bonds” coalition.
The letter, which was signed by the mayors, AMWA and nearly 20 other municipal and corporate organizations, noted the 100-year history of tax-exempt bond financing and warned that capping or eliminating the exemption would increase infrastructure financing costs to communities nationwide. It also noted that cities and towns in the U.S. issued $445 billion worth of municipal bonds in 2016 – a record amount.
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The mayors’ effort came several weeks after AMWA joined another pro-bonds letter to Congress circulated by Municipal Bonds for America, a partnership of municipal bond issuers and state and local government officials. In addition, AMWA is making frequent visits to Capitol Hill to share the results of its analysis indicating that fully taxing municipal bond interest would raise water and wastewater financing costs by 25 percent.
Republican congressional leaders hope to consider a comprehensive tax reform overhaul this year, though details on any forthcoming plan remain unclear.
This news was first released in the Association of Metropolitan Water Agencies’ weekly Monday Morning Briefing on April 3.
