Council endorses preservation of federal tax exemption for municipal bonds after GFOA presentation

The Common Council unanimously adopted a resolution declaring support for preserving the federal tax exemption for municipal bond interest after a public comment presentation from the Government Finance Officers Association (GFOA).

Why it matters: The municipal-bond tax exemption supports local capital financing for infrastructure, schools, water systems and affordable housing. City and finance advocates say changes at the federal level could increase borrowing costs for local governments.

What was said: Emily Brock, director of federal policy at the Government Finance Officers Association in Washington, D.C., told the council that municipal bonds underpin local infrastructure financing and that the tax-exempt status is a significant federal tax expenditure. Brock said the exemption helps localities make capital decisions locally and gave a local example: "Madison Metro's Bus Rapid Transit used about $30,000,000 in bonds on a roughly $200,000,000 project that moves about 9,500,000 rides in 2023." She warned Congress could alter the exemption as it negotiates tax legislation and urged vigilance to preserve municipal bonds.

Council action: After the public comment, the council moved and recorded a unanimous vote to adopt the resolution in support of preserving the federal tax exemption for municipal bond interest.

Next steps: The adopted resolution signals Madison—s position to federal lawmakers and national municipal finance organizations; it does not in itself change local financing but serves as an advocacy position.