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Business and Policy Areas
Business and Policy Areas
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NACUBO Continues Support of Municipal Bond Tax Exemption

February 21, 2017

NACUBO joined representatives from a wide array of industries that together form the Municipal Bonds for America Coalition (MBFA) in signing a letter of support for preservation of the tax exemption for municipal bonds.

 The letter was signed by 375 organizations and was sent to congressional leaders and members of the House Ways and Means and Senate Finance Committees. The letter expresses concern about potential limitations of or changes to tax-exempt bonds in ongoing tax reform efforts; such changes could be seen as a revenue generating measure to fund other elements of tax reform.

“The municipal market and tax-exempt municipal bonds are the backbone of state and local government finance and key components in a vibrant federal economy,” the letter states. “A reduction or elimination for municipal bonds could raise infrastructure costs by 10 to 12 percent.”

NACUBO signed on to a similar letter in 2015 to then-congressional leaders John Boehner and Nancy Pelosi and in recent years has advocated to preserve tax-exempt bond financing in a number of different ways.

Tax-exempt bond financing is one avenue by which the federal government invests in innovation and infrastructure building throughout the U.S., and it remains a significant tool for colleges and universities seeking to build, expand, renovate, and generally improve their campuses.

NACUBO will continue to closely monitor any proposal that changes the treatment of tax-exempt bond financing.

What can business officers do?

Without knowing whether or not Congress will alter the tax treatment of municipal bonds, at this point NACUBO encourages business officers to first meet with your government relations teams to ensure they are aware of your concerns. Using these talking points, illustrate the impact potential reforms could have on your campus.

If you have the opportunity to engage with lawmakers, explain to them that you understand that Congress might consider altering the tax treatment of tax-exempt bonds. Use the NACUBO talking points to demonstrate consequences of such changes at your institution.

While legislation and tax reform plans are still being developed, it does not hurt to educate lawmakers about the cost implications of higher interest rates—and the real impact it could have on budget and planning priorities for your institution.

Contact

Megan Schneider
Assistant Director, Federal Affairs
202.861.2547
E-mail