Restoring the federal tax exemption for advance refunding bonds could allow state and local governments to take on a series of much-needed infrastructure projects.
That is the conclusion of the National Association of State Treasurers, which has issued a statement calling on Congress to write back into the law the tax exemption which has previously been used to fund thousands of infrastructure projects.
“Last year more than $100 billion in advance refunding bonds were issued, saving hundreds of millions of taxpayer dollars that could then be reinvested into vital infrastructure projects,” the association has said.
The tax exemption for the use of such bonds was discarded late last year as part of the Tax Cuts and Jobs Act of 2017.
The association says that because advance refunding bonds allow state and local insurers to refinance bonds at a lower rate, funding is freed up for any number of infrastructure projects.
Representatives Randy Hultgren of Illinois and Dutch Ruppersberger of Maryland have introduced legislation in Congress to restore the tax exemption. That legislation is now in the House Ways and Means Committee.
By Garry Boulard
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