St. Lawrence County Chairman joins Cuomo in opposition of federal proposal to end tax-exempt status for municipal bonds
St. Lawrence County Legislative Chairman Jonathan Putney says a federal proposal to end tax-exempt status for municipal bonds would be another blow to the struggling North Country economy.
"Proposals considered by the House of Representatives Ways and Means Committee to eliminate tax free municipalities would have a detrimental impact on the North Country and NYS," Putney said in an emailed statement.He said tax-exempt municipal bonds have been a part of the Federal tax code since 1913 and have proven to be an effective method to finance costly state and local projects over time.
Putney said some members of the House of Representatives want to “streamline” the tax code by removing municipal bond tax exemptions.
"This will create a situation where we will have less infrastructure maintenance and repair, fewer jobs, and more financial problems shifted onto state and local governments," he said. "It appears as though efforts in this particular circumstance to “simplify” the tax code are going to be quite costly for all of us."
Putney said that if the tax-exempt status of these bonds were to be taken away, consumers would have much less incentive to seek out municipal bonds on the market. He said that it would likely create a situation that would place hospital, bridge, public power utility, airport, school, and other state and local infrastructure projects in peril, according to Putney.
"We don’t need an additional burden when we face enough challenges with our aging infrastructure. Our government is obligated to provide for public safety and I’m reminded of the tragic 2007 bridge collapse in Minnesota as a clear example for the need to focus on our infrastructure," he said. "We need jobs and clearly with less infrastructure projects there are less construction jobs. With today’s economy being as challenging as it is we can’t afford to let this proposed idea stall our growth."
According to the National Association of Counties if this proposal were in place from 2003 to 2012 there would have been an additional $495 Billion dollars in interest expenses passed on to the state and local governments, Putney said.
Putney said that if the tax exempt status of municipal bonds is taken away, the county and state will see higher borrowing costs, less investment in infrastructure, less jobs and higher property taxes.
"I am pleased to stand with Governor Andrew Cuomo who has pointed out the danger that lies ahead for us all if this proposal advances," he said. "As the Chairman of the St. Lawrence County Legislature I call on all of our Federal representatives to have this poorly thought out idea removed from the table for further consideration."