Now that both the 119th Congress and the Trump Administration have been formally sworn in, the focus has quickly turned to the legislative agenda. Specifically, tax reform is one of the top priorities the Administration and majority party in Congress would like to tackle soon. Many provisions of the 2017 Tax Cut and Jobs Act (TCJA) will expire at the end of this year. But any extensions of TCJA provisions, or the addition of new provisions to any final package will come at a cost.
The cost can generally be offset in a few ways, including repealing or rolling back existing provisions of the tax code. One hallmark provision for public finance is the tax-exemption for municipal bond interest. Unfortunately, but not surprisingly, on one of the very early lists of ideas to help pay for the bill is a full repeal of the tax-exemption. Threats to the tax-exemption are certainly not new, but the fact the provision is on at least one list highlights the need for ongoing education and outreach to federal lawmakers. Now that we are in a new Congress, a renewed effort is needed to explain the importance of the longstanding finance tool for the development and upkeep of infrastructure that provides for the needs of communities across the country.
To kickstart this effort, GFOA sent a welcome letter to members of the 119th Congress earlier this week. The letter provided a few data points on the impact of municipal bonds, such as the cost savings the tax-exemption provides to local communities. Additionally, the letter highlights the recent GFOA-led Municipal Bonds Data Brief, and updates to the Municipal Bonds Primer.
- Publication date: January 2025