HomeMy WebLinkAbout05. 13-338
JULY 23, 2013 13-338 RESOLUTION
(CARRIED___7-0____ LOST _______ LAID OVER _______ WITHDRAWN _______)
PURPOSE: SUPPORT THE PRESERVATION OF THE DEDUCTIBILITY
OF INTEREST ON MUNICIPAL TAX-EXEMPT BONDS
INITIATED BY: CITY ADMINISTRATION
WHEREAS, as part of the Fiscal Year 2014 Federal Budget Proposal representatives of
Congress and the President have recently proposed changes from eliminating the ability of
investors to deduct interest paid from municipal tax-exempt bonds on their federal income taxes
to capping this interest deduction at 28%; and
WHEREAS, over the last decade municipal tax-exempt bonds have funded more than
$1.9 trillion worth of infrastructure construction on such key and important infrastructure as
schools, roads, water and sewer facilities, utilities, public facilities, public power, hospitals, and
airports; and
WHEREAS, in 2012 alone 6,600 tax-exempt municipal bond issues financed $179 billion
in United States infrastructure; and
WHEREAS, municipal tax-exempt bonds provide a diversified, safe retirement investment
for middle class citizens to invest within their community; and
WHEREAS, the current deduction of municipal bond interest from federal income tax
represents a successful working federal-state-local government partnership that respects the
sovereign powers of each government and reinforces the governmental responsibilities of each;
and
WHEREAS, any interest deductibility change will increase borrowing costs for all state
and local government infrastructure projects which will be paid by their citizens through tax and
rate increases; and
WHEREAS, since not all increased borrowing costs can be passed on to their citizens
through a tax or rate increase, the amount of state and local government infrastructure projects
will be reduced; and
WHEREAS, the reduced ability of state and local governments to handle their
infrastructure needs will slow the growth of job-creating infrastructure projects;
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Oshkosh
that any proposal to alter the tax-exempt status of municipal bonds should be rejected and the
deductibility of interest on municipal tax-exempt bonds remain the same since tax-exempt
municipal bonds are a vital tool for infrastructure replacement as well as a vital tool for job
growth and economic development.
BE IT FURTHER RESOLVED, that the City Clerk is hereby directed to send a copy of this
Resolution to each member of the Wisconsin Senate Delegation and ask them to forward the