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Tax Reform Update

  • 20 November 2017
  • scalera

 Both the House and Senate tax reform proposals repeal advance refunding bonds after 2017.  Public water and sewer utilities issued about $45 billion in advance refunding bonds from 2012 to 2016.  According to some bond writers’ groups, if advance refunding bonds are repealed, “municipal bond issuers would be challenged to manage interest rate risks and the cost of borrowing for state and local governments would skyrocket,” and would “likely drive many issuers into the swaps and derivatives markets to find new ways to manage debt issued for infrastructure and capital improvement.”  Last week, the U.S. House of Representatives passed their tax bill.  The Senate is expected to vote on their version of the tax bill after Thanksgiving.