HomeMy WebLinkAbout1073RESOLUTION NO. /o76
A RESOLUTION of the City Council of the
City of Kent, Washington, opposing Federal tax
reform proposals that would eliminate certain
tax exempt financing and impose additional
requirements on other municipal tax exempt
financing.
WHEREAS, the City of Kent issues general obligation bonds
(unlimited and councilmanic); water revenue bonds; storm drainage
revenue bonds; local improvement district guarantee fund bonds for
developed and undeveloped property; and industrial development
bonds through the City of Kent Economic Development Corporation;
and
WHEREAS, the Administration's proposed tax plan would
result in profound changes in the Federal Income Tax Laws and
would severely limit the ability of state and local governments to
raise capital on a tax exempt basis to wit:
1. Eliminate tax exemption on "nongovernmental
bonds" including Industrial Development Bonds.
2 • Eliminate tax exemption of "governmental bonds"
if more than one percent of the bond proceeds were used directly
or indirectly by any person.
3. Impose rebate and complicated arbitrage
reporting requirements on all bond issues and restrict arbitrage
profits on bond proceeds.
4. Eliminate advance refunding on all bond issues;
and.
WHEREAS, the House Ways and Means Committee on
September 25, 1985 released options to the Administration's tax
proposal. The options while different, continue to impose severe
restrictions on the ability of local government, and particularly
the City of Kent, to raise capital to provide for essential
governmental services; and
WHEREAS, the City of Kent would have lost nearly a
quarter of a million dollars (~250,000) in savings in 1985 solely
as a result of two refunding bond issues had the current proposal
been in force and effect; and
WHEREAS, the City of Kent finances local improvements
through the use of local improvement district financing, and under
current proposals, such financing may be determined to result in
one percent of the bond proceeds being used directly or indirectly
by any person, and therefore not eligible for tax exempt status;
and
WHEREAS, at least 80 percent of all new municipal bonds
issued by the City of Kent would lose tax exemption if the
Administration's proposed tax plan is enacted; and
WHEREAS, the proposal creates a direct and substantial
impact on local government and citizens, increasing the cost to
provide essential public services; NOW THEREFORE
THE CITY COUNCIL OF THE CITY OF KENT, WASHINGTON DOES
HEREBY RESOLVE AS FOLLOWS:
Section 1. The City Council of the City of Kent joins
with the National League of Cities in opposing any tax reform
proposal, until such time as the Congress and Administration
address the Federal deficit.
Section 2. The City Council opposes the elimination of
tax exempt status for municipal financing.
Passed at a regular meeting of the City Council of the
City of Kent Washington this ~ day of ~ 1985.
day of
Concurred in by the
~~ 1 1985.
Mayor of the City of Kent, this o<~
~~
ATTEST:
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02970-120
APPROVED AS TO FORM:
P~EPENDiJUIJIOI !TYATTORNEY
I hereby certify that this is a true and correct copy of
Resolution No. /07..3 , passed by the City Council of the City of
Kent, Washington, the <:::2/ day of tJc;/: , 1985.
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02970-120