On Wednesday, February 27, 2013, the National Association of Counties, the National League of Cities and the U.S. Conference of Mayors held a press conference where they called on Congress and the Administration to "reject any proposals to hamstring the financing of local infrastructure projects by changing the tax-exempt status of municipal bonds." The three organizations released a report that concludes "that curtailing or eliminating the tax-exemption would raise costs for financially strapped state and local governments, and would result in less investment in infrastructure, particularly at a time when jobs are scarce and the physical state of public works and infrastructure is deteriorating."
Elaborating on the impact that changes to the exemption would create, Tim Firestine, President-elect of the Government Finance Officers Association, stated that "eliminating or even capping the tax exemption on investors would cause them to look for higher-yielding investments and we would have to offer more interest to lure them back. This simply drives up the county cost to local taxpayers to maintain our infrastructure. [And] the burden will be transferred to the property tax."
Documents handed out at the roundtable discussion, including the report titled Protecting Bonds to Save Infrastructure and Jobs 2013, can be found here.