WASHINGTON – The Trump administration wants its tax reform plan to both empower state and local governments to have more control over local infrastructure financing while doing no harm to tax exemption for municipal bonds, a White House official said in a Wednesday meeting with the Municipal Bonds for America coalition.
Members of the coalition were not given any details of how that would be accomplished, according to MBFA Director Justin Underwood, who attended the meeting. But President Trump, speaking in Cincinnati, said state and local governments would have to match federal funds for infrastructure projects.
The administration hopes to create a more robust system for financing and building state and local infrastructure, coalition members were told by Ja’Ron Smith, director of urban affairs and revitalization policy for the White House Domestic Policy Council.
Smith met for 45 minutes at the Eisenhower Old Executive Office Building with Underwood, Mayor Stephen Benjamin of Columbia, S.C., who chairs MBFA, and other representatives of various sectors of the municipal bond market.
Among them were: Sue Kelly president and CEO of the American Public Power Association President; Annie Russo, vice president for government affairs and the Airports Council International-North America; and Debra Chromy, president of the Education Finance Council.
President Trump, meanwhile, said in Cincinnati that his plan to spur $1 trillion in new infrastructure investments will involve forging new pubilc-private partnerships, reducing burdensome regulations and “massively expediting’’ approval of new projects.
“We will work directly with state and local governments to give them the freedom and flexibility they need to revitalize our nation’s infrastructure,’’ Trump said, promising at least $200 billion will come from federal funds. Trump’s 2018 budget request spreads out that $200 billion over 10 years.
The president criticized the 2009 federal economic stimulus package, estimating only “a tiny 7 percent went to infrastructure.’’ The $787 billion American Recovery and Reinvestment Act of 2009 passed Congress in February of that year.
“Remember shovel ready?’’ he asked. “Shovel ready wasn’t shovel ready. That I can tell you. We’re not going to repeat that mistake.’’ Trump pledged to help state and local governments prioritize their most pressing needs by building transformative projects.’’
Meanwhile, the administration and congressional Republicans working on tax reform have not yet officially taken the tax exclusion for municipal bonds off the table from possible measures to broaden the tax base, Rep. Randy Hultgren, R-Ill., said Wednesday.
“I don’t think anything is off the table,’’ Hultgren said. “It’s just too early.’’
Hultgren is co-chair of the House Municipal Finance Caucus with Rep. C.A. Dutch Ruppersberger, D-Md.
The two spearheaded a March letter signed by 161 House lawmakers that urged the tax policy-writing House Ways and Means Committee leaders to recognize any change in the tax-exempt status of municipal bonds would increase the cost of financing for states and local governments.
