Power Lines Blog

Tax reform: let’s keep up the fight for municipal bonds

Municipal Bonds

As the Administration pivots to tax reform, we are on high alert about maintaining the tax-exempt status of municipal bonds. Bonds are the primary tool our public power utility members use to finance new infrastructure. Eliminating or undercutting the tax-exempt status of these bonds would increase our borrowing costs, and that will be reflected in electric rates. In effect, it is a regressive tax. Public power has the ability to bring local policymakers to the Hill to personally lobby on this issue. We need to be able to do that, and on short notice.

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Legislative Rally and public power priorities

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The preservation of tax-exempt financing is the Association’s top legislative priority in 2017. We will actively engage on tax reform legislation, working to preserve the tax-exempt status of municipal bonds, which are key for public power infrastructure development. We will emphasize this and other priorities as our members visit elected officials during our 2017 Legislative Rally.

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Funding public power through municipal bonds

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Municipal bonds work for public power utilities and their customers. Federal policy makers should recall these facts when proposing to alter the tax treatment of municipal bonds. If public power systems are going to make the needed infrastructure investments to incorporate new technologies, keep our facilities safe and secure, and deal with new environmental regulations, we need to have continued, unfettered access to tax-exempt bonds.

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