President-elect Trump voiced support for the federal tax exemption on municipal bonds during a meeting with several U.S. mayors on Thursday, according to Columbia, South Carolina Mayor Stephen Benjamin.
“He was clear that his support of the tax exemption was there,” Benjamin said in the lobby of Trump Tower in New York City, following the meeting. “And that was wonderful news.”
Protecting the “muni” bond tax exemption has been a priority for many state and local leaders.
The exemption allows investors to avoid federal income taxes on interest earned from the bonds. It’s believed to keep borrowing costs for municipal bonds lower compared to other types of financing. A common criticism, however, is that the exemption costs the federal government money in the form of lost tax revenue, while benefiting wealthy investors.
Since the election, there have been questions about whether the exemption might be curtailed or nixed as part of broader tax reform measures expected to emerge in the coming year.
“Protecting the tax exemption on municipal bonds that’s been there since 1913 is sacrosanct to us delivering on infrastructure,” Benjamin said during his comments to reporters, which were recorded by C-SPAN. “Seventy-five percent of America’s infrastructure is built using this tool.”
State and local governments rely on municipal bonds to build a range of projects. Roads, bridges and waterworks are a few examples.
Trump has backed an infrastructure plan that raises the possibility of up to $1 trillion of projects over a decade’s time. It involves federal tax credits and substantial private investment.
Among the other mayors who met with the president-elect and his team Thursday were Mick Cornett of Oklahoma City, Mitch Landrieu of New Orleans and Elizabeth Kautz of Burnsville, Minnesota. Cornett is the president of the U.S. Conference of Mayors. Landrieu is the organization’s vice president, Benjamin its second vice president and Kautz a past president.
“We had a fairly interesting meeting,” Cornett said. Referring to Trump, he added: “He showed great interest in helping cities.”
The meeting, according to Cornett, lasted about 15 or 20 minutes and was mostly “introductory.”
Cornett said the Conference of Mayors asked to meet with Trump the day after the election. The mayor also explained that infrastructure and public safety are both top priorities for the group.
It was not unclear, Cornett said, who would be selected as a point person within the incoming administration for intergovernmental affairs related to local governments. The Conference of Mayors delegation offered their input on the matter on Thursday, he said, encouraging the president-elect to choose someone with experience as a mayor.
Looking ahead, Benjamin struck a positive tone.
“We’re excited about the relationship we’re going to build between the U.S. Conference of Mayors and the new administration,” he said. “There’s a lot of work to be done.”