February 18, 2025

Apparently, it’s not enough for Congressional leaders and the White House to just cut federal money to states – now they’re coming for how municipalities pay for their own local projects too. 

We knew the House budget resolution would harm working peopleand create holes in state budgets that would mean rising property taxes for everyday Americans. 

Now, as The Wall Street Journal reports, local governments and municipalities could get hit AGAIN as the House leadership’s misplaced priorities target the municipal bond market that funds local public works projects. 

Why it matters: The massive cuts that the House Budget Resolution forces in order to fund the Trump Tax Cuts for the rich could mean a whole lot more potholes in local neighborhoods. That’s super popular with constituents, right?

Read more on how the “cut anything and everything in order to fund tax cuts for the rich and big business” continues to play out for Representatives in their districts at home:

The Wall Street Journal: Municipal Bonds Markets Fear Trump Tax Cuts Could Clip Momentum

• “The Trump administration’s efforts to cut taxes are threatening to upend the U.S. $4 trillion municipal bond market. The potential change comes as local governments are increasingly relying on munis to finance public works. Municipal bonds issuance is growing, after a post-pandemic lull. Investors, in turn, have sought the low-risk securities to buffer their fixed-income portfolios while reducing their tax load.
  

• “The momentum in munis could now wane, as lawmakers look for ways to increase federal revenues and offset wide tax cuts proposed by President Trump. Tax exemptions that for generations have made municipal bonds attractive could be eliminated, pushing investors to demand higher payouts to finance infrastructure including schools, sewage systems, roads, airports and more.

• “The concerns about exemptions stem from discussions regarding the Tax Cuts and Jobs Act approved in 2017 with Republican support. Some cuts expire by year end and are widely expected to be extended or even deepened. But given the growing federal budget deficit, lawmakers face pressure to find alternative revenue sources. 

• “Nixing tax exemptions on interest earned by municipal bondholders has been mentioned by the House Ways and Means Committee as a way to save $250 billion over 10 years. Local authorities are trying to dissuade lawmakers from doing so, arguing it would do more harm than good.”