By Connor Radnovich
Cronkite News
WASHINGTON – While much of Washington is focused on the impact of Friday’s “sequestration” cuts, Mesa Mayor Scott Smith is worried that a proposed solution to that problem could end up seriously hurting cities.
Smith and other county and city leaders were in Washington Wednesday to warn that a plan to raise revenue by eliminating the tax exemption for municipal bonds could lead to job losses, fewer public projects and higher taxes.
“This kind of action, while it appears that it solves Washington’s problem, has a ripple effect that is beyond serious,” Smith said during a briefing at the National Press Club. “It’s just a bad solution.”
Smith, who serves as vice president of the U.S. Conference of Mayors, was joined by officials from the National League of Cities and the National Association of Counties who came to tell Congress “Don’t Mess With Our Bonds!” – as the bright-red sign behind the four speakers read.
They also released a report showing that state and local governments financed more than $1.65 trillion of infrastructure projects in the last decade using tax-exempt bonds. Arizona borrowed more than $36 billion for 808 issues in the same period, it said.
