Tax-exempt bonds are a critical tool for counties that facilitates the budgeting and financing of long-range investments in the infrastructure and facilities necessary to meet public demand for government services.

Current deficit reduction proposals and related derivatives, which include a cap on the benefit of the exemption, would have the effect of imposing a partial income tax on otherwise tax-exempt interest earned by certain investors.

Without the tax-exemption, counties would pay more to raise capital, a cost that would ultimately be borne by the taxpayers, through means such as reduced spending on the roads and bridges that counties are responsible for, decreased economic development, higher taxes or higher user fees.

Please view the NACo talking points here, and the NACO Tax Exempt Bonds Report here.  For additional information please contact Michael Belarmino at 202.942.4254 or