MBFA pushes Ways and Means Committee on key issues
3 min read
The Municipal Bonds for America coalition is pressing the importance of key legislative issues affecting the world of public finance onto the docket of the powerful House Committee on Ways and Means.
“We did some meetings up on the Hill earlier this summer, almost simultaneously as when Ways and Means majority leadership announced their tax working groups,” said Brett Bolton, SVP of Bond Dealers of America.
In April the Ways and Means Committee announced the formation of all-Republican tax teams to study the key provisions of the Tax Cuts and Jobs Act while soliciting public opinions, which provided the MBFA an opening.
BDA
“From the Municipal Bonds for America perspective, it’s laying out the priorities and the importance of infrastructure financing,” said Tom Kozlik, managing director, head of public policy and municipal strategy for Hilltop Securities.
“There is the chance for more changes to federal tax policy by the end of next year than what we’ve ever seen.”
Presidential candidates, Congress, states, municipalities, and the entire financial industry are staking out positions on the provisions of the Tax Cuts and Jobs Act that are set to expire at the end of 2025.
The MBFA is a group of municipal market advocates led by the Bond Dealers of America that includes Wells Fargo Securities, Nixon Peabody, and Hilltop Securities on the steering committee.
Their letter provides a primer of the key legislative efforts underway that affect the municipal bond market including preserving the municipal bond tax exemption and the restoration of advance refunding for tax exempt bonds.
The eight-page missive also calls for expanding the use of private activity bonds, raising the bank-qualified debt limit, and creating a direct-pay bond like the Build America Bonds that is immune to any budget sequestration efforts.
Per the letter, “Restrictions such as prohibiting advance refundings and limiting the use of PABs for infrastructure ties the hands of local governments and discourages capital investment in new infrastructure projects.”
“As the Committee continues work on details of next year’s tax plan, we ask that you work to ensure bond financing is a cornerstone to any federal infrastructure package.”
Assuming the Republicans retain control of the House, Chairman Jason Smith R- Mo., is expected to remain in charge. If the Democrats manage to come out ahead, longtime muni ally and Ranking Member Richard Neal D- Mass., is expected to retrieve the gavel.
MBFA has trained their ttention on Rep. Mike Kelly R- Pa., who is heading up the Community Development group while also seeking continued support from Terri Sewell D- Ala., a reliable teammate of muni issues.
Lobbying groups are engaged in ongoing efforts to break down the intricacies of public finance to a merry-go-round of lawmakers.
“There’s so much turnover on the Hill, we’re taking more of an educational approach,” said Bolton. “These are very nuanced issues, so we’re trying to provide as much detail and easy reading as we can.”
While the 119th Congress will be tackling some extra-large tax issues, the lame duck session happening after the election and prior to the start of the new session also offers a few possibilities for moving policy levers.
“There’s a chance that they focus on some extenders in the lame duck session, but I can’t imagine they’re going to address the TCJA this year,” said Bolton.
