Americans on both sides of the aisle agree: Our current tax code is complex, costly and time consuming. It hurts the ability of American businesses to grow and create new middle-class jobs, and for individuals to cover basic household costs. We believe it’s time for real reforms that simplify the tax code, lower taxes on all Americans and their families and stimulate job growth.
We are encouraged by a number of the reforms proposed in the Tax Cuts and Jobs Act working its way through the House.
However, as co-chairmen of the Municipal Finance Caucus, we are concerned by the serious threat posed to the tax-exempt status of private activity bonds. These tools are used regularly by states and local governments to fund important public goods such as health care facilities; affordable housing; schools and universities; airports; water and sewer facilities; commuting centers; and other important infrastructure.
This year, 162 members of Congress joined together in demonstrating the importance of municipal finance, including private activity bonds, to fund the vast majority of infrastructure projects in their communities.
In fact, President Donald Trump has called for increasing infrastructure investment in the U.S., and has underscored the idea of public and private institutions partnering to improve infrastructure. There are a number of proposals before Congress to expand upon the success of PABs.
The current tax-exempt status of PABs made it possible for Presence Health, the largest Catholic health system in Illinois, to refinance its debt, ensuring its continued services would be made available to hundreds of thousands of the neediest individuals and families across the state. Constituents in Illinois’ 14th District depend on Presence to access their Medicaid benefits. The University of Chicago has used these bonds for every building at its medical center, including specialized care for children and cancer patients.
In Maryland, construction crews broke ground earlier this year on a long-awaited light rail line. Conceived more than three decades ago, the line was made possible only with a PAB – leveraging federal, state and private sector dollars. Not only is it expected to relieve traffic across three counties – in the state with the nation’s second-longest commutes – but the new line will create 52,000 new jobs.
We strongly encourage our colleagues in Congress to seriously reconsider what losing the tax-exempt status of PABs will mean for their districts before agreeing to advance this misguided and misunderstood change to the tax code that will stunt job growth for years to come.
• Randy Hultgren, a Republican, represents Illinois’ 14th Congressional District and is a member of the House Financial Services Committee. Dutch Ruppersberger, a Democrat, represents Maryland’s 2nd Congressional District and is a member of the House Appropriations Committee.