A bipartisan pair of House members is launching a caucus to advocate for state and local governments’ ability to independently finance infrastructure projects.
Reps. Randy Hultgren (R-Ill.) and Dutch Ruppersberger (D-Md.) announced the “Municipal Finance Caucus” on Tuesday. The group will consider issues including maintaining the tax exemption for municipal bonds — debt state and local governments issue to finance the construction and maintenance of infrastructure.
“Over the last twenty years I have had the privilege of serving at the local, state and federal level, and saw first-hand how important preserving the strength of municipal finance options can be,” Hultgren said in a news release. “This bipartisan caucus will ensure these issues get the attention they deserve in Congress.”
A full list of members was not immediately available, but a large number of House members have expressed their support for the municipal bond tax exemption in the past. Hultgren and Ruppersberger sent a letter to House leadership on the topic last year that was also signed by more than 120 of their colleagues.
Proposals to limit the exemption have been floated in recent years. President Obama’s budgets have repeatedly called for capping the value of the municipal bond tax exemption, along with other tax preferences, at 28 percent. And former House Ways and Means Committee Chairman Dave Camp (R-Mich.) proposed imposing a 10 percent surtax on municipal bond interest for high earners.
“Municipal bonds are the single most important tool in the country for financing new roads, schools, hospitals and more,” Ruppersberger said. “I am excited to be a founding member of this bipartisan caucus to fight efforts to reduce and even eliminate the tax incentives associated with this common sense, job-creating tool.”
The announcement of the caucus coincides with the National Association of State Treasurers legislative conference in D.C. The group organized a letter signed by more than 600 elected officials that urges the leaders of the House Ways and Means Committee and the Senate Finance Committee to reject curbs to the muni exemption.
“Any such change will inhibit our ability to make critical infrastructure investments,” the officials said in the letter. “Proposals to change this commitment to tax-free municipal bonds would not only be costly for state and local taxpayers, but also result in fewer projects, fewer jobs and further deterioration of our infrastructure.”
Vermont State Treasurer Beth Pearce, NAST’s incoming president, has partnered with Governor Phil Scott to launch a statewide Financial Literacy..