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RESOLUTION IN SUPPORT OF TIlE PRESERVATION OF TAX-EXEMPT BONDS FOR STATE AND LOCAL GOVERNMENTS WHEREAS, the federal, state, and local governments all share in the responsibility of building and maintaining the nation's physical and institutional infrastructure and in providing essential services needed to promote the general welfare; and WtlEREAS, tbe federal government has steadily reduced its responsibility for infrastructure requirements, and has shifted moro and more financial responsibility to states and units of local government; and WHEREAS, shifting the tax burden from the national level to state and local governments is an illusot3' savings for taxpayers and provides no net tax relief; and WIIEREAS, finandng state and local government projects through the issuance of bonds thc interest on which is not taxed by the federal government is critical to allow states and local governments to exercise the responsibilities entrusted to and expected of them; and WHEREAS, in recent years, the U.S. Congress has both limited the use of tax-exempt bonds by states and local governments, and made municipal bonds less attractive to signifieant groups of purchasess, thereby driving '0p the cost of financing public scrdcc projects; and WIIEREAS, in 1988 the U.S. Supreme Court overturned a 100-year-old precedenl, ruling for the first time that the Constitution docs not prohibit the federal government from taxing the interest on state and local government bonds; and WItEREAS, the Supreme Court decision places in jeopardy the use of tax-exempt bonds by the moro than 85,000 units of state and local government, as Congress seeks new sources of revenue to reduce the federal deficit; and WHEREAS, state and local borrowing costs ,,viii increase by an estimated 20 to 30 percent if the interest on tax-exempt bonds is sub.~ect to federal income tax, and this added burden will bo reflected in reductions in public services or by incruased state and local taxes; and WIIEREAS, further restrictions on the use of tax-exempt bonds wi!l seriously impair the ability of state and local governments to finance essential services and facilities, including schools, roads, water, sewer, gas, electricity, transportation and other basle functions, to tho detriment of ali citizens. NOW, TI1EREFORE BE IT R,--F~OLVED: 'that the Cabarrus County Board of Commissioners calls upon Congress and the President to recognize that tho state and local burden of maintaining and expanding the national infrastructure and providing citizens with needed basic governmental services cannot be met ',vithout tax- exempt bomls, and to resist all fi~rther efforts to reduce the use of such bonds to finance governmental projects. James W. Lent:,., Chairman Frankie F. Small, Clerk to the Board