Proposed changes to tax-exempt municipal bonds could increase drinking water and wastewater costs

September 2013, Vol. 68 No. 9

For more than a century, tax-exempt municipal bonds have been the most important source of funding for water and wastewater infrastructure projects in the United States. In 2012, 48 of the 50 states utilized tax exempt financing to fund water and wastewater projects, and since 2003, municipalities have issued $258 billion worth of tax-exempt municipal bonds to fund water and wastewater infrastructure – comprising approximately 16 percent of all municipal bond issuance for all infrastructure projects over this period.
NACWA and AMWA urge Congress and the Administration to consider the serious impacts to our nation’s water infrastructure and maintain the current tax-exempt status of municipal bonds. The report also highlights several recent case studies from utilities around the country to demonstrate how their recent bond issuances would have been impacted by a cap or elimination of the tax exemption.

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