Urges lawmakers to consider impact to state budgets
FRANKFORT, Ky. (April 17, 2013) – Kentucky Treasurer Todd Hollenbach is calling on all Kentuckians to contact their congressional representatives and urge them to maintain the current tax-exempt status of municipal bonds.
As a national leader on the issue, Hollenbach was one of the first of state treasurers to sign onto a letter from the National Association of State Treasurers (NAST) to members of the U.S. House Ways and Means Committee urging them to maintain the current tax-exempt status.
“It’s an issue that will have long-term ramifications for Kentucky’s budget and our public infrastructure projects,” he said. “State and local governments use municipal bonds as the primary means of financing highways, bridges, transit systems, airports, water and wastewater systems, schools, higher education facilities and many other public projects.”
“The need in our state to upgrade and maintain our bridges and roads has never been greater,” he added.
Eliminating or reducing the tax exempt status of these bonds will result in fewer projects, fewer jobs and a continually deteriorating infrastructure, Hollenbach said.
States and localities save an average of 25 to 30 percent on interest costs when using municipal bonds as opposed to taxable bonds, according to NAST.
“With already tightened budgets,” Hollenbach said, “the ability to save billions of dollars on infrastructure financing is essential.”
Eliminating the tax exemption will force the state to pay higher borrowing costs or cause city and state leaders to curtail or abandon infrastructure projects, he said.