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6.1.H. - Page 2 <br /> of the exemption during that same period would have cost state and local governments <br /> over $495 billion in additional interest costs. <br /> Additionally, proposals at the Federal level to cap or remove the exemption on <br /> municipal bond interest may create volatility in the market. Investors might demand <br /> higher yields from state and local governments to due to the increased level of <br /> uncertainty about further federal intervention into the municipal bond market. <br /> Accordingly, staff has prepared a letter from the City to the White House expressing the <br /> City's desire to maintain the existing tax-exempt status for municipal bonds, and <br /> requests Council's authorization for the Mayor to execute and transit that letter. <br /> ALTERNATIVES <br /> The Council may reject staff's recommendation to oppose any proposal to limit the <br /> amount of interest on debt issued by local government that may be excluded from <br /> federal taxable income. <br /> FISCAL IMPACT <br /> The proposals to either eliminate or cap the amount of interest excludable from taxable <br /> Federal income would increase the cost of any future debt issued by the City for any <br /> infrastructure projects. <br /> ENVIRONMENTAL REVIEW <br /> This activity is not a project under CEQA as defined in CEQA Guidelines, section <br /> 15378, because it has no potential for resulting in either a direct or foreseeable physical <br /> change in the environment. <br /> ���`�—�- <br /> BRIAN PONTY <br /> FINANCE DIRECTOR <br /> �" <br /> ROBERT B. BELL <br /> CITY MANAGER <br /> ATTACHMENTS <br /> 1. Letter from Senator Boxer <br /> 2. Council Letter in support of Senator Boxer <br /> RELATED DOCUMENTS IN CITY CLERK'S OFFICE <br /> None <br />