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Resolution <br />Supporting No Change to the Deductibility of Interest on Municipal Tax - Exempt <br />Bonds <br />Whereas, as part of the Fiscal Year 2014 Federal Budget Proposal representatives of Congress <br />and the President have recently proposed changes from eliminating the ability of investors to <br />deduct interest paid from municipal tax- exempt bonds on their federal income taxes to capping <br />this interest deduction at 28 %; and <br />Whereas, over the last decade municipal tax - exempt bonds have funded more than $1.9 trillion <br />worth of infrastructure construction on such key and important infrastructure as schools, roads, <br />water and sewer facilities, utilities, public facilities, public power, hospitals, and airports; and <br />Whereas, in 2012 alone 6,600 tax- exempt municipal bond issues financed $179 billion in United <br />States infrastructure; and <br />Whereas, municipal tax- exempt bonds provide a diversified, safe retirement investment for <br />middle class citizens to invest within their community; and <br />Whereas, the current deduction of municipal bond interest from federal income tax represents a <br />successful working federal- state -local government partnership that respects the sovereign powers <br />of each government and reinforces the governmental responsibilities of each; and <br />Whereas, any interest deductibility change will increase borrowing costs for all state and local <br />government infrastructure projects which will be paid by their citizens through a tax and rate <br />increase; and <br />Whereas, since not all increased borrowing costs can be passed on to their citizens through a tax <br />and rate increase, the amount of state and local government infrastructure projects will be <br />reduced; and <br />Whereas, the reduced ability of state and local governments to handle their infrastructure needs <br />will slow the growth ofjoh- creating infrastructure projects; <br />Now therefore be it resolved by the City Council of the City of Little Canada, Minnesota that any <br />proposal to alter the tax - exempt status of municipal bonds should be rejected and the <br />deductibility of interest on municipal tax - exempt bonds remain the same since tax- exempt <br />municipal bonds are a vital tool for infrastructure replacement as well as a vital tool for job <br />growth and economic development. <br />Resolution adopted this day of August, 2013. <br />Attest: <br />By: <br />William Blesener, Mayor <br />Joel R. Manson, City Administrator <br />