Curtailing Tax Exemptions For Municipal Bonds Unlikely, Lawmakers Say

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By Pat Ware

Members of Congress assured large water utilities March 19 that lawmakers are unlikely to remove the tax-exempt status of municipal bonds that finance infrastructure projects.

“Tax-exempt bonds are very high on the value list and low on the wasteful spending list,” Sen. Jeff Merkley (D-Ore.), a member of the Senate Environment and Public Works Committee, told the 2013 Water Policy Conference of the Association of Metropolitan Water Agencies.

Although the tax exemptions have been in place for more than a century, some legislators have proposed curtailing exemptions as a way to reduce the federal deficit, and several attendees at the conference expressed concern that bonds would lose their tax-exempt status.

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