The Government Finance Officers Association’s Washington, D.C. team is hoping to plant the seeds of municipal market priorities during the summer ahead of this fall’s high-stakes national election so they blossom during next year’s major tax policy debate.
“There’s a lot of activity happening now because of the election,” federal liaison Emily Brock told the GFOA’s debt committee Saturday during the organization’s annual conference, this year held in Orlando. “We have to be realistic that the Congressional complexion is probably going to change, and maybe even the administration [after the election]; there could be a full system overhaul,” Brock said. “But it doesn’t matter, we’re not going to change our tune.”
The GFOA and public finance industry has crafted a new visual tool as it lobbies Congressional staffers and officials, a “built by bonds” website that highlights bond-financed projects. Brock encouraged issuers on the committee to send “pictures of your sewer systems, of your middle schools” to promote on the website, which will show examples of projects in every Congressional district.
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Showing staffers and officials examples of bond-financed projects “makes it feel more tangible,” said GFOA federal policy analyst Jarron Brady.
Brady said he’s heard initial positive feedback in the Senate about muni priorities like restoring tax-exempt advance refunding and bank-qualified debt, both of which were included, along with a provision for new direct-pay bonds,
Meanwhile, advocates are looking for a replacement for Maryland Democrat Rep. Dutch Ruppersberger, a founder and co-chair of the bipartisan House Municipal Finance Caucus
“He was really a champion for us, and had great staffers, so it’s a big loss to lose him, but we’re looking to find a new champion,” Brady said. “Beefing up” the House Municipal Finance Caucus will be another goal, he said.
The big push will come in 2025 as the TCJA’s provisions expire, creating a debate over whether to extend its provisions and creating an opening for tax changes. Though some muni-related TCJA provisions, like the cap on state and local tax deduction, will sunset, the elimination of tax-exempt advance refunding was a permanent move. Restoring it remains the muni market’s top priority.
“We’re entering into this new tax conversation with technically an ask,” Brock said, referring to advance-refunding.
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“It’s not a very pretty picture; there may be tons more claw backs” to fund the extensions, Brock said. “We need to not only be vigilant about offense but also about playing defense,” she said, adding that the debate will be happening next year as GFOA holds its next annual meeting in Washington, D.C. “Our expectation is to have a tremendous amount of advocacy when the tax act is coming to the fore.”
Assuming that muni priorities like in Sewell’s bill fail to advance this year, the measures will have to be re-introduced next Congress, Brady noted.
“We are hoping with the education we do this year, and with the work on the front end, that we’ll receive something good on the back end in terms of inclusion of our priorities,” he said.