Fiscal Note
This resolution urges Congress to maintain the tax exemption for interest received by investors in the City's debt. The City issues approximately $100 million to $150 million of tax-exempt municipal debt annually. Repealing the federal tax exemption on municipal debt will increase interest costs to the City to finance critical capital investments, such as for street reconstruction, stormwater management, sewer infrastructure, facilities, vehicles and equipment. Higher interest costs could result in higher taxes and fees for residents. Studies have estimated that the cost of repealing the tax exemption for municipal bond interest could increase taxes and fees for every household nationally by over $6,500.
Title
Declaring support for the preservation of the federal tax exemption for municipal bond interest.
Body
WHEREAS, the tax-exempt municipal bond market is a widely used source of capital for states, local governments, tribes, territories, and non-profit borrowers that finances a tremendous share of the nation's public infrastructure; and
WHEREAS, state and local governments finance about three-quarters of the public infrastructure in the United States and use tax-exempt bonds to do so, with the federal government providing only about one-quarter of the investment; and
WHEREAS, federal tax exemption for municipal bonds, dating back to the 1800s and incorporated into the modern tax code in 1913, has been crucial for state and local governments to affordably finance critical infrastructure projects; and
WHEREAS, tax-exempt bonds offer borrowers to achieve a multiplier effect of 2.11, meaning that for every dollar, borrowers achieve $2.11 in borrowing cost savings thereby demonstrating the efficiency and effectiveness of this exemption in facilitating infrastructure investment; and
WHEREAS, tax-exempt bonds provide for essential infrastructure projects, such as roads, bridges, utilities, broadband, water and sewer systems, and hospital...
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