February 10, 2016
Treasurers Urge Congress To Protect Tax-Exempt Status Of Municipal Bonds For Critical Infrastructure Projects
– The National Association of State Treasurers (NAST) released the following statement today after U.S. President Barack Obama submitted his $4.1 trillion budget to Congress, which would partially remove the exemption of municipal bond interest from federal income taxation.
“NAST strongly opposes the President’s proposed changes to the current tax treatment of municipal bonds, which are a vital source of funding used to build and preserve infrastructure in our communities. As Congress begins to debate the budget, the House, Senate and Administration need to fully understand and acknowledge the importance of tax-exempt municipal bonds and their absolute, unbreakable relationship to the preservation and development our nation’s infrastructure,” said NAST President and Washington State Treasurer James McIntire.
As in the President’s fiscal year 2016 budget proposal, this year’s proposal would limit the tax exemption for municipal bonds to a maximum of 28 percent.
“Municipal bonds have long been a vital source of funding for states, cities and counties to pay for essential infrastructure needs. Removing the tax-exempt status of these bonds for select taxpayers would cause a devastating ripple effect—one that would ultimately cause every American to foot the bill. We call on Congress to preserve this necessary funding mechanism so that schools, roads, hospitals, and more receive the fundamental improvements our communities deserve,” NAST Senior Vice President and Oklahoma State Treasurer Ken Miller.