HomeMy WebLinkAboutAgenda Report - March 22, 1989 (73)CITY COUNCP- MEETING -
MARCH 22, 1989
RESOLUTION ADOPTED
CALLING UPON
CONGRESS TO RESIST
ALL EFFORTS TO
FURTHER LIMIT THE
USE OF TAX-EXEMPT
BONDS TO FINANCE
LOCAL GOVERNMENTAL
PROJECTS
RES. NO. 89-30
The City Council adopted Resolution Nc. 89-30 entitled "A
Resoluticr Calling Upon Congress to Resist All Efforts to
CC-7(d)
Further Limit Use of fax-Exempt Bonds to Finance Local
CC=28
Government Projects ."
The City Council was apprised that from time to time there
surfaces talk of Federal legislation that would impose a
tax on the interest earned an State and local government
bonds. A recent U. S. Supreme Court decision (South
Carolina vs. Baker) held that Congress may tax interest on
-
State and local government bonds. Cities, acting through
the League of California Cities, have consistently
expressed strong opposition to this cancept. A copy of
House Concurrent Resolution No. 39 which states in part
that "historically, Congress has respected the important
role of these bonds in funding public projects ey
refraining from taxing the interest on such bonds" was
presented for. Council's review. The bottom line, of
-
course, is that imposing a tax on these bonds increases the
interest rates bid which translates to a far greater cost
of the project at the direct expense of local taxpayers.
In view of the recent U. S. Supreme Court decision, it is
important that cities once again express their united
opposition to any efforts to limit the use of such bonds.
This latest effort is being coordinated by the American
Public Power Association. If approved, a copy of the
subject resolution will be sent to Coegressmar, Norman
Shumway.