In a letter to the state’s Congressional delegation, more than 40 South Carolina mayors voiced their concern about a number of the proposals in the tax reform package being debated on Capitol Hill this week.
While noting the importance of proposal not including the elimination of the deduction on municipal bond interest, the mayors, representing cities as large as Columbia and as small as Ulmer, pointed to six proposals in the package that would be universally harmful to the state’s cities and towns:
• Eliminating the deduction for state income and local and state sales taxes;
• Limiting the deduction for city and county property taxes above $10,000;
• Eliminating the New Markets Tax Credit, the Historic Preservation Tax Credit and the Work Opportunity Tax Credit;
• Eliminating advance refunding of municipal bonds, effective December 31, 2017;
• Eliminating Clean Renewable Energy Bonds, Energy Conservation Bonds, Qualified Zone Academy Bonds, Build America Bonds and other tax credit bonds effective December 31, 2017; and
• Eliminating private activity bonds, effective December 31, 2017.
In the letter, the mayors told delegation members “We recognize that our federal tax code is complex and in need of simplification. However we have serious concerns about Congress reducing the flexibility of a variety of funding options local officials must have in order to raise the revenues needed to meet our communities’ needs.”
Debate on the tax reform package will continue next week.