Opinion: Utah needs the right financial tools to build

As Congress seeks to extend the Tax Cuts and Jobs Act of 2017 and identify revenue offsets, communities across the country are urging lawmakers to preserve a fundamental economic development tool: the tax-exempt status of municipal bonds. Maintaining this tax exemption is crucial for building essential infrastructure in Utah communities and driving economic growth while saving Utah taxpayers hundreds of millions of dollars.

For over a century, tax-exempt municipal bonds have been the primary tool by which state and local governments, not-for-profits and economic developers finance large-scale public projects that underpin economic vitality and quality of life. These bonds allow for financing essential infrastructure that powers job creation and enables long-term economic prosperity. The tax exemption reduces borrowing costs, making it feasible for economic developers to undertake projects that benefit Utahns across the state.

Over the past 10 years alone in Utah, state and local governments have relied on tax-exempt bonds to finance $30 billion in projects such as schools, hospitals, housing, water treatment facilities and transportation systems. By keeping interest on these bonds tax-exempt, Utah taxpayers have saved an estimated $635 million. The projects financed are not just assets for local communities; they are catalysts for regional economic growth, attracting businesses, supporting a skilled workforce and enhancing the standard of living.

Eliminating or limiting the tax exemption on municipal bonds would raise borrowing costs, leading to significant fiscal challenges for Utah’s communities, especially the rural and smaller borrowers who account for 60% of projects financed. Higher costs for infrastructure projects would deter private investment, stifle job creation and ultimately increase the financial burden on businesses and taxpayers.

To answer our governor’s urgent call for Utah to build, we must preserve the financial tools that enable progress. The Economic Development Corporation of Utah and the Utah Alliance for Economic Development urge Congress to recognize the invaluable role that tax-exempt municipal bonds play in economic development. By maintaining this tax exemption, Congress can ensure that Utah’s communities have the right tools to address public infrastructure needs, sustain our quality of life and build without burdening taxpayers.