House Republicans are speaking out to ensure that the budget reconciliation effort does not remove the tax exemption for municipal bonds.

On April 11, House Financial Services Committee Chair French Hill (R-AR) and each of the six subcommittee chairs wrote to House Ways and Means Committee Chair Jason Smith (R-MO) to urge him “to fully support the tax-exempt status of municipal bonds—a critical tool that has underpinned American infrastructure and community development for over a century.”

On April 4, 25 House members, led by Representative Don Bacon (R-NE), also sent a bi-partisan letter to Chair Smith urging protection of tax exempt bonds. “Associations and constituents have expressed their concern that the elimination of the tax-exempt status of municipal bonds would increase borrowing costs to fund projects, increase taxes and reduce services for residents, and cause the delay or cancellation of projects, impacting public safety and impeding economic growth,” the letter says.

The prospect of losing the tax exemption was raised in January in a leaked document of cost-cutting ideas from the House Budget Committee.

The House Ways and Means Committee and its Senate counterpart, the Senate Finance Committee, have jurisdiction over whether to remove the tax exemption on bonds. The House Ways and Means Committee is expected to act on its portion of the budget reconciliation package by mid-May.

LeadingAge continues to educate congressional offices about the damage that would ensue to aging services if they no longer had access to tax exempt bonds while also urging stakeholders to directly reach out their federal delegations individually and as part of our April Lobby Day.