Welcome!

Agile Computing Authors: John Basso, Elizabeth White, AppDynamics Blog, Liz McMillan, Igor Drobiazko

News Feed Item

Mayors, County and Local Leaders Oppose Move To Cap Tax-Exempt Municipal Bonds That Would Harm Infrastructure, Jobs

WASHINGTON, Feb. 27, 2013 /PRNewswire-USNewswire/ -- The U.S. Conference of Mayors (USCM), The National League of Cities (NLC) and the National Association of Counties (NACo) today called on Congress and the Administration to reject any proposals to hamstring the financing of local infrastructure projects by changing the tax-exempt status of municipal bonds.  Municipal bonds provide a low-cost and efficient way for cities and counties to finance much of America's critical infrastructure, including schools, hospitals, airports, water and sewer systems, and roads and bridges.

(Logo - http://photos.prnewswire.com/prnh/20081022/NLCLOGO)

During a roundtable at the National Press Club held for reporters by mayors, county and local leaders of all three non-partisan organizations released a report (http://www.nlc.org/Documents/Influence%20Federal%20Policy/Advocacy/Legislative/bonds-report-feb2013.pdf) to highlight the broad use of municipal bonds in more than thirty locales around the country.  Municipal bonds are the country's most important source of financing for vital infrastructure and are used to finance everything from multibillion transportation projects to school expansions in communities large and small.

"Municipal bonds are essential financing tools used by mayors and local officials in their communities," said USCM Vice President Mesa, AZ Mayor Scott Smith.  "Municipal bonds allow communities to build the streets, bridges, water lines, and police and fire stations that not only serve the needs of citizens, but also create jobs and drive the economy.  Without them, our communities will suffer."

The joint report also shows in the last decade, state and local governments financed over $1.65 trillion of infrastructure investment using tax-exempt bonds – nearly all in just six categories:

  • $514 billion in primary and secondary schools;
  • $288 billion in hospitals;  
  • $258 billion in water and sewer facilities;
  • $178 billion in roads, highways and streets;
  • $147 billion in public power projects and;
  • $106 billion in mass transit.

If the proposed 28-percent cap had been in effect during that time, the borrowing costs to states and localities of these bonds would have increased by $173 billion and would have prevented many infrastructure projects from moving forward.  In 2012 alone, more than 6,600 tax-exempt municipal bonds financed over $179 billion worth of infrastructure projects – the bulk of which were primary and secondary education, water and sewer facilities, and hospitals.

Of the cap proposal, NACo President Chris Rodgers, Commissioner, Douglas County, Nebraska said, "Counties build, maintain and pay for much of America's infrastructure including schools, roads, water and sewer systems, airports, bridges and hospitals.  Counties own and maintain 44 percent of the nation's roadways, 228,026 bridges and almost one third of the nation's transit systems and airports.  Counties own 964 hospitals and 677 nursing homes.  Tax-exempt municipal bonds are the single most important tool that counties use for financing our critical infrastructure.  Any change to the taxation status of often voter-approved debt issued by counties risks local public works projects that benefit communities and puts into question the nature of the U.S. federalist partnership."

In effect, the 28 percent cap on tax-exempt interest would be borne almost exclusively by state and local governments in the form of higher interest rates on their borrowing. Market analysts have estimated that this proposed tax on municipal bond interest would raise state and local borrowing costs by up to 70 basis points (0.70 percentage point) or more.  Because the tax would apply not only to new state and local borrowing, but also to all outstanding bonds, investors would be taxed on investment which they reasonably expected would be tax-exempt as long as they are outstanding -- an unprecedented form of retroactive taxation.

"Talk of eliminating the tax exemption on municipal bonds is more about politics—on both sides—than economics," says NLC representative Houston City Controller Ronald Green. "No one can argue about how cities, counties and states have utilized municipal bonds to great effect to finance their capital projects such as roads and highways, water projects, schools, libraries, fire stations and, while doing this, saving on interest costs with tax exempt 'muni' bonds. The yield from taxable bonds—if that was the only option for municipalities—would pale in comparison to the increased taxes residents would have to pay to fund infrastructure projects. Or, the alternative, simply to postpone needed projects."

Finally, local leaders explained that municipal bonds represent a partnership among the federal government, state and local governments, and private investors in contributing to public infrastructure, which creates jobs and improves economic efficiency. Tax-exempt bonds maintain decision-making and project selection at the state and local level, where citizens and elected officials can best determine where needs are greatest and where investments will generate the maximum return.

Tim Firestine, Chief Administrative Officer for Montgomery County, MD, President-elect of the Government Finance Officers Association and NACo representative, elaborated on the impact that uncertainty would create, "Our county has about $2.1 billion of general-obligation bonds outstanding at this time, on which we pay interest of $93 million a year.  Eliminating or even capping the tax exemption on investors would cause them to look for higher-yielding investments and we would have to offer more interest to lure them back.  This simply drives up the county cost to local taxpayers to maintain our infrastructure.  [And] the burden will be transferred to the property tax."

The report concludes that curtailing or eliminating the tax-exemption would raise costs for financially strapped state and local governments, and would result in less investment in infrastructure, particularly at a time when jobs are scarce and the physical state of public works and infrastructure is deteriorating.

The National League of Cities is dedicated to helping city leaders build better communities. NLC is a resource and advocate for 19,000 cities, towns and villages, representing more than 218 million Americans.

The U.S. Conference of Mayors is the official nonpartisan organization of cities with populations of 30,000 or more. There are 1,295 such cities in the country today, and each city is represented in the Conference by its chief elected official, the mayor. Like us on Facebook at facebook.com/usmayors, or follow us on Twitter at twitter.com/usmayors.

The National Association of Counties (NACo) is the only national organization that represents county governments in the United States. Founded in 1935, NACo provides essential services to the nation's 3,069 counties. NACo advances issues with a unified voice before the federal government, improves the public's understanding of county government, assists counties in finding and sharing innovative solutions through education and research, and provides value-added services to save counties and taxpayers money. For more information about NACo, visit www.naco.org.

SOURCE National League of Cities

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
The IoT has the potential to create a renaissance of manufacturing in the US and elsewhere. In his session at 18th Cloud Expo, Florent Solt, CTO and chief architect of Netvibes, will discuss how the expected exponential increase in the amount of data that will be processed, transported, stored, and accessed means there will be a huge demand for smart technologies to deliver it. Florent Solt is the CTO and chief architect of Netvibes. Prior to joining Netvibes in 2007, he co-founded Rift Technol...
Join IBM June 8 at 18th Cloud Expo at the Javits Center in New York City, NY, and learn how to innovate like a startup and scale for the enterprise. You need to deliver quality applications faster and cheaper, attract and retain customers with an engaging experience across devices, and seamlessly integrate your enterprise systems. And you can't take 12 months to do it.
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, will discuss how research has demonstrated the value of Machine Learning in delivering next generation analytics to im...
This is not a small hotel event. It is also not a big vendor party where politicians and entertainers are more important than real content. This is Cloud Expo, the world's longest-running conference and exhibition focused on Cloud Computing and all that it entails. If you want serious presentations and valuable insight about Cloud Computing for three straight days, then register now for Cloud Expo.
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
IoT device adoption is growing at staggering rates, and with it comes opportunity for developers to meet consumer demand for an ever more connected world. Wireless communication is the key part of the encompassing components of any IoT device. Wireless connectivity enhances the device utility at the expense of ease of use and deployment challenges. Since connectivity is fundamental for IoT device development, engineers must understand how to overcome the hurdles inherent in incorporating multipl...
The paradigm has shifted. A Gartner survey shows that 43% of organizations are using or plan to implement the Internet of Things in 2016. However, not just a handful of companies are still using the old-style ad-hoc trial-and-error ways, unaware of the critical barriers, paint points, traps, and hidden roadblocks. How can you become a winner? In his session at @ThingsExpo, Tony Shan will present a methodical approach to guide the holistic adoption and enablement of IoT implementations. This ov...
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
The IETF draft standard for M2M certificates is a security solution specifically designed for the demanding needs of IoT/M2M applications. In his session at @ThingsExpo, Brian Romansky, VP of Strategic Technology at TrustPoint Innovation, will explain how M2M certificates can efficiently enable confidentiality, integrity, and authenticity on highly constrained devices.
Artificial Intelligence has the potential to massively disrupt IoT. In his session at 18th Cloud Expo, AJ Abdallat, CEO of Beyond AI, will discuss what the five main drivers are in Artificial Intelligence that could shape the future of the Internet of Things. AJ Abdallat is CEO of Beyond AI. He has over 20 years of management experience in the fields of artificial intelligence, sensors, instruments, devices and software for telecommunications, life sciences, environmental monitoring, process...
SYS-CON Events announced today that Ericsson has been named “Gold Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. Ericsson is a world leader in the rapidly changing environment of communications technology – providing equipment, software and services to enable transformation through mobility. Some 40 percent of global mobile traffic runs through networks we have supplied. More than 1 billion subscribers around the world re...
SYS-CON Events announced today that Stratoscale, the software company developing the next generation data center operating system, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Stratoscale is revolutionizing the data center with a zero-to-cloud-in-minutes solution. With Stratoscale’s hardware-agnostic, Software Defined Data Center (SDDC) solution to store everything, run anything and scale everywhere...
Angular 2 is a complete re-write of the popular framework AngularJS. Programming in Angular 2 is greatly simplified – now it's a component-based well-performing framework. This immersive one-day workshop at 18th Cloud Expo, led by Yakov Fain, a Java Champion and a co-founder of the IT consultancy Farata Systems and the product company SuranceBay, will provide you with everything you wanted to know about Angular 2.
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
In his session at @ThingsExpo, Chris Klein, CEO and Co-founder of Rachio, will discuss next generation communities that are using IoT to create more sustainable, intelligent communities. One example is Sterling Ranch, a 10,000 home development that – with the help of Siemens – will integrate IoT technology into the community to provide residents with energy and water savings as well as intelligent security. Everything from stop lights to sprinkler systems to building infrastructures will run ef...
You deployed your app with the Bluemix PaaS and it's gaining some serious traction, so it's time to make some tweaks. Did you design your application in a way that it can scale in the cloud? Were you even thinking about the cloud when you built the app? If not, chances are your app is going to break. Check out this webcast to learn various techniques for designing applications that will scale successfully in Bluemix, for the confidence you need to take your apps to the next level and beyond.
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, will discuss how leveraging the Industrial Interne...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
Increasing IoT connectivity is forcing enterprises to find elegant solutions to organize and visualize all incoming data from these connected devices with re-configurable dashboard widgets to effectively allow rapid decision-making for everything from immediate actions in tactical situations to strategic analysis and reporting. In his session at 18th Cloud Expo, Shikhir Singh, Senior Developer Relations Manager at Sencha, will discuss how to create HTML5 dashboards that interact with IoT devic...