Advocacy Issues & Topics
Advocacy Issues & Topics
Stay informed on the federal policies and legislative priorities that impact public finance. Explore the issues GFOA is tracking and learn how we advocate for the interests of state and local government finance professionals.
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Tax-Exempt Municipal Bonds
We remain concerned that the threat of elimination is still prevalent as the tax reform debate gets underway. If state and local governments lose the ability to use tax-exempt bonds and are compelled to issue taxable bonds as an alternative, the increased costs would have a crippling effect on infrastructure, community services, and households in general.
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State and Local Tax Deduction (SALT)
As part of the 2017 Tax Cuts and Jobs Act (aka tax reform), Congress vigorously debated whether to limit or eliminate the ability for taxpayers to deduct state and local taxes (SALT). Ultimately, a $10,000 cap on the deduction was adopted in the 2017 bill. The SALT cap provision, along with several other individual provisions in the tax code are set to expire at the end of 2025.
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Bank Qualified Municipal Bonds
Bank-qualified bonds were created in 1986 to encourage banks to invest in tax-exempt bonds from smaller, less-frequent municipal bond issuers, and to provide municipalities with access to the lower cost borrowing that they need in order to provide services and invest in schools, roads, bridges and other projects.
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Advance Refunding Issuance
Advance refundings represented 27% of municipal bond market activity in 2016 and 19% in 2017. Additionally, the TCJA decreased the overall corporate tax rate from 35% to 21% and eliminated other tax incentives that could impact overall demand for municipal bonds.
