Tax-exempt municipal bonds have helped fund critical infrastructure projects for townships and other local governmental entities for decades by reducing the cost of borrowing thereby reducing the cost to taxpayers. However, there is serious discussion about federal action to eliminate the tax exemption for municipal bonds. The elimination of the tax-exempt status of municipal bonds will increase borrowing costs to fund projects, increase taxes and reduce services for residents, and cause the delay or cancellation of projects, impacting public safety and impeding economic growth. Per the Government Finance Officers Association, the elimination would correspondingly raise borrowing costs $823.92 billion—a cost that would be passed onto taxpayers, resulting in a $6,554.67 tax and a rate increase for each household over the next decade.
MTA urges you to contact your member of the U.S. House of Representatives as soon as possible to garner their support to preserve the federal tax-exemption for municipal bonds—a critical tool that enables state and local governments to fund essential infrastructure projects efficiently and affordably. It is imperative that they recognize the profound benefits that tax-exempt municipal bonds provide to our communities and constituents.