Hands Off Our Tax-Exemption! Muni Groups Send Letter to Panel

The Bond Buyer reports:

State and local government groups have combined forces with dealers, bond lawyers and representatives from energy, education and other sectors to deliver a strong message to the joint congressional deficit-reduction committee: hands off our tax-exempt financing.

Twenty-two members of the municipal market groups sent a letter to the 12 members of the Joint Select Committee on Deficit Reduction, urging them to continue “support and commitment” for tax-exempt bond financing. The letter was sent to committee members one day before they met for the first time on Thursday.

For months, state and local government groups have been ramping up defensive strategies to prevent their tax-exemption from getting swept up in the tax reform and deficit-reduction deliberations in Washington. The letter shows the magnitude of concern among muni market groups about the future of tax-exempt bonds.

“In a world in which there are likely reductions to domestic discretionary and perhaps even mandatory and entitlement spending, it is critical that this tool be preserved in order for us to protect our investments,” said Michael Bird, federal affairs counsel for the National Counsel of State Legislatures.

You know if you made the financing of state and local government more expensive: you might just get less of it.