Council: Keep tax-exempt financing

Published 1:59 am Wednesday, April 17, 2013

Washington’s City Council on Monday unanimously adopted a resolution in support of tax-exempt financing.


The council directed the city clerk to send copies of the resolution to the federal legislators representing the city in Congress.


As part of discussion on the federal budget deficit, the elimination or reduction of tax-exempt financing for municipal debt is being considered.


“If enacted, our borrowing costs would increase by at least 45%,” reads a memorandum from Matt Rauschenbach, the city’s chief financial officer and administrative services director, to the mayor and City Council.


“If that is enacted, we would see a tremendous increase in our borrowing costs, so it is recommended that we approve this resolution and send (it to) our congressional delegation,” City Manager Josh Kay said.


Tax-exempt municipal bonds are the primary means used by state and local governments finance three-quarters of the critical infrastructure of the nation, including roads, bridges, utility systems, schools and hospitals, according to the resolution. The exemption has allowed state and local governments to finance more than $1.65 trillion in infrastructure investment during the past 10 years, the resolution notes.


The exemption is “part of a more tan century-long system of reciprocal immunity under which owners of federal bonds are, in turn, not required to pay state and local income tax on the interest they receive from federal bonds,” reads the resolution.


In other action, the council unanimously adopted a resolution supporting the Partnership for the Sounds in its effort to retain state funding for its operations, including the North Carolina Estuarium in Washington. There is a possibility the N.C. General Assembly could reduce or eliminate funding for some nonprofit groups currently receiving state funding.


“As most agencies find themselves at this time with the state budget austerity plan in full swing, the Partnership for the Sounds is fully engaged in the state (budget) process. They’re trying to demonstrate their support throughout the region. They’ve got resolutions from every county where they provide service, every municipality where their partnership exists. They’ve asked us for one. The one we have in our packet was provided by the partnership,” said Mayor Archie Jennings.

For additional coverage of the council’s meeting, see future editions of the Washington Daily News.

About Mike Voss

Mike Voss is the contributing editor at the Washington Daily News. He has a daughter and four grandchildren. Except for nearly six years he worked at the Free Lance-Star in Fredericksburg, Va., in the early to mid-1990s, he has been at the Daily News since April 1986.
Journalism awards:
• Pulitzer Prize for Meritorious Public Service, 1990.
• Society of Professional Journalists: Sigma Delta Chi Award, Bronze Medallion.
• Associated Press Managing Editors’ Public Service Award.
• Investigative Reporters & Editors’ Award.
• North Carolina Press Association, First Place, Public Service Award, 1989.
• North Carolina Press Association, Second Place, Investigative Reporting, 1990.
All those were for the articles he and Betty Gray wrote about the city’s contaminated water system in 1989-1990.
• North Carolina Press Association, First Place, Investigative Reporting, 1991.
• North Carolina Press Association, Third Place, General News Reporting, 2005.
• North Carolina Press Association, Second Place, Lighter Columns, 2006.
Recently learned he will receive another award.
• North Carolina Press Association, First Place, Lighter Columns, 2010.
4. Lectured at or served on seminar panels at journalism schools at UNC-Chapel Hill, University of Maryland, Columbia University, Mary Washington University and Francis Marion University.

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