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National Association of Counties
Washington, D.C.

www.NACo.org

 Moving Forward with Muni-Bonds: Keep Up the Pace

By Matt Chase
NACO EXECUTIVE DIRECTOR

 

Thank you for all of your efforts over the past few months to engage your congressional delegation on tax reform issues critical to county government.  Now that we are well into the second half of the year, the tax reform process has evolved into more of a marathon and less of a sprint, and keeping a consistent pace of engaging your delegation will be critical in the coming months.

• What’s Next on the Congressional Calendar?

Congress is scheduled to leave for the summer recess beginning Aug. 5 through early September.

As members travel home, the recess will provide a great opportunity to schedule meetings and project tours with members and their staff to discuss the importance of municipal bonds to your local communities. 

• What You Can Do Over the Summer Recess

Don’t just tell them; show them!

One of the best ways to communicate to your members of Congress about the importance of tax-exempt municipal bonds is to invite them and their staff to tour facilities or projects that are funded completely or in part by municipal bonds.

We encourage you to reach out to their schedulers now to get on their summer schedules. Remember to also invite the member’s Washington, D.C. staff including the legislative director and chief of staff.

Lawmakers will appreciate the opportunity to see the facilities made possible with municipal bonds, meet local business leaders and talk with employees who work in the facilities. Whether you get them in a car and drive around their district or schedule a tour, this is a very effective way to build the relationship and begin your advocacy efforts. 

Be sure to mention that tax-exempt municipal bonds are not a special interest provision. They have been embedded in the federal tax code since its modernization in 1913.

Remember to thank them for their time and, if possible, take pictures and write a press release about the visit. 

Also, arrange for a tailored profile of the impact on your county of changes to the tax-exempt status of municipal bonds. In May, NACo prepared individualized profiles with these costs for each state and 45 counties. If your county was not among those initially surveyed and you would like to have your county-cost profile, please send your 2012 interest payment on your tax-exempt municipal bonds to research@naco.org. NACo’s research team will produce a profile for you within one business day.

For questions on how to engage your members over the summer recess, please contact the NACo Legislative Affairs Department at 202.942.4254. 

• Thank them for their support!

Thank your House members for signing the “Dear Colleague” letter in support of the exemption for municipal bond interest.

To see if your representative signed on, go to http://bit.ly/1aVlimS

Also, urge your House members to cosponsor the Terry-Neal resolution (H. Res. 112) supporting municipal bonds.

 H. Res. 112 celebrates the history and importance of municipal bonds in developing the infrastructure of the nation. There are currently 84 representatives signed on as cosponsors and more are needed. Visit http://bit.ly/164hjkX to see the current list of cosponsors.

If your representative would like to sign on, have their staff contact either A.T. Johnston in Rep. Lee Terry’s office (at.johnston@mail.house.gov or 202.225.4155) or Ann Jablon in Rep. Richard Neal’s office (ann.jablon@mail.house.gov or 202.225.5601). 

NACo Municipal Bond Campaign closely tracks congressional action

 

NACo’s latest effort follows months of persistent lobbying on behalf of municipal bonds by the association and its members. Following are highlights from the campaign.

Senate “Blank Slate” Exercise

In July, Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Orrin Hatch (R-Utah) engaged in a “blank slate” exercise as the next step in tax reform efforts in the Senate. This approach essentially removed all provisions in the tax code, including the exemption for municipal bond interest, and called for senators to make the case for specific provisions to be included in the code. 

In a letter sent to their colleagues, the two leaders stressed the need to simplify the tax code, but recognized some provisions were important to keep.  For those that should be retained, they called for clear evidence that the provision helps: grow the economy, make the tax code fairer, or effectively promote other important policy objectives.

The exercise generally received mixed reactions from senators, ranging from no response submitted to responses with just general principles outlined.

138 Representatives Supported Municipal Bonds “Dear Colleague” Letter

As a result of your outreach seeking signatures in the House for a bipartisan letter led by Reps. Dutch Ruppersberger (D-Md.) and Randy Hultgren (R-Ill.) — both former county officials — supporting municipal bonds, NACo is pleased to report that 138 representatives, evenly split on both sides of the aisle, signed on to the letter that was sent to House Speaker John Boehner (R-Ohio) and Democratic Leader Nancy Pelosi (D-Calif.).

NACo Municipal Bond resources

BulletNACo report on the impact to counties of proposed changes to tax-exempt municipal bond interest

BulletNACo presentation on municipal bonds with charts and infographics

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NACo legislative fact sheet on municipal bonds 

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 NACo/USCM/NLC report on the impact of municipal bonds

14 Senators Sent Letter to President Urging Support for Municipal Bonds

In April, Sen. Mark Begich (D-Alaska) sent a letter to President Obama urging the Administration not to cap or eliminate the tax-exempt status of municipal bonds as a means of addressing the federal deficit. The letter, on which 13 fellow senators joined, stressed the negative impact that state and local governments would experience as a result of any changes.

 

NACo-led Letter with 59 National Organizations Supporting Municipal Bonds during March Senate Budget Debate

In March, the Senate’s 2014 Budget Resolution contained language that suggested the possibility of a cap being placed on tax expenditures, which could include the exemption for interest earned on municipal bonds.  In response, NACo led a letter that garnered a broad coalition of national organizations with members that would be impacted by proposed changes to the exemption.

 

Ways and Means Committee Tax Reform Working Groups

Earlier this year, House Ways and Means Chairman Dave Camp (R-Mich.) and Ranking Member Sandy Levin (D-Mich.) announced the formation of 11 separate Ways and Means Committee Tax Reform Working Groups.  The groups engaged in a “fact finding” exercise where the current law for specific issue areas was identified and external stakeholder feedback was obtained in various forms.  Although no specific group focused on state and local financing, tax-exempt municipal bonds was part of the discussion.

Senate Finance Committee Tax Reform Option Papers

For most of the spring, Senate Finance Committee members met on a weekly basis for closed-door discussions on various tax reform topics.  The goal was to collect feedback from committee members on a range of options for taking on tax reform.  As with the House Ways and Means Working Group exercise, no single option paper focused solely on municipal bonds. They were discussed, however, in at least one paper — the May 15 paper titled “Economic and Community Development.”