Leveraging local politics on the Republican side of the aisle may hold the key to convincing lawmakers who are on the fence about retaining the tax exemption of municipal bonds in the face of paying for new tax cut requests from the Trump administration.
"It is totally counter-intuitive that a Republican district would be thinking about eliminating a tool that finances the very infrastructure and economic development and affordable housing in their district," said Toby Rittner, president and CEO of the Council of Development Finance Agencies.
"But this is a math game. The president wants certain things, and they have to find a way to pay for it."
Rep. Rudy Yakym R-Ind. who represents the state's second district and sits on the House Ways and Means Committee, has a front row seat in the tax policy debates that will decide the fate of key Tax Cuts and Jobs Act provisions that expire at the end of this year.
His position also puts him high on the list for lobbying efforts.
"We've been in contact with his deputy chief of staff," said Jarron Brady, policy analyst of the Government Finance Officers Association Federal Liaison Center.
"We've been talking about doing a hill briefing, in middle or late March because the committees have been instructed to come up with their proposals by the end of March. We should see some leaks in the media, probably around that time about what's been included."
Yakym scored a Public Service Award from the American Public Power Association earlier this week, cementing his status as a friend of public finance.
"Representative Yakym understands that tax-exempt municipal financing is a critical engine for creating jobs and upgrading our nation's infrastructure," said APPA president and CEO Scott Corwin.
"His leadership of the Municipal Finance Caucus and work on the House Ways & Means Committee has been, and will continue to be, vital to protecting public power's access to the financing tools that keep our communities reliably and affordably powered."
The APPA represents not-for-profit, community-owned utilities that power 2,000 towns and cities nationwide. Public power utilities use tax-exempt municipal bonds to finance power generation, distribution, reliability, demand control, efficiency, and emissions control.
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Advance refunding was knocked out by the TCJA during the first Trump administration.
Members of the Public Finance Network are
According to their numbers, Indiana's second district, "invested at least $4.1 billion in projects financed by active tax-exempt municipal bonds," and "district taxpayers saved at least an estimated $86.07 million on sub-state projects financed with tax-exempt municipal bonds since 2002."
