Maryland’s U.S. Representative Dutch Ruppersberger, along with U.S. Representative Randy Hultgren, an Illinois Republican, have sponsored a bill to bring back the federal tax break on advance refunding bonds. The federal tax exemption for the refinancing tool was removed in the federal tax reform bill.
Advance refunding bonds allow counties to refinance tax-exempt municipal bonds to save taxpayer money on outstanding debt. Previously, counties could issue one advance refunding bond per municipal bond – saving taxpayers billions nationwide on public infrastructure. That ended December 31, 2017.
I’m proud to lead this bipartisan effort on behalf of local governments in Maryland who rely on this tool to finance projects that benefit everyone. We need to do what we can to help local governments create jobs while building roads, schools, hospitals, fire and police stations. When counties can issue an advance refunding bond, it saves taxpayers billions nationwide – and an average of nearly $37 million annually here in Maryland. This can translate into lower property taxes.
“Given that interest rates are expected to increase, this tool is especially important to states and local governments responsibly planning for the future,” Hultgren said in a statement.
The two lawmakers co-chair the Congressional Municipal Finance Caucus, which unsuccessfully pushed to keep advance refunding bonds out of the tax bill.