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R1949Æ ÆÏÏà *ÔR E S O L U T I O N NO. 1949•ƒ ÁÁ WHEREAS, the productive capacity of the American economy and the health, safety and welfare of the nation depend upon the quality of a reliable infrastructure and the availability of adequate basic public facilities and services, and WHEREAS, the principles of federalism, which have served this nation for more than 200 years, include the immunity of states and local governments from federal taxation of interest for public functions in order to maintain the balance of power between states, and the federal government, and WHEREAS, the federal government has steadily reduced its responsibility for infrastructure requirements, and has shifted more and more financial responsibility to states and units of local government, and WHEREAS, financing state and local government projects through the issuance of bonds, the 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 significant groups of purchasers, thereby driving up the cost of financing public service projects, and ÜhÜŒÀ J OÀ WHEREAS, the U.S. Supreme Court overturned a 100©year©old precedent, ruling for the first time that the Constitution does not prohibit the federal government from taxing the interest on state and local government bonds, and WHEREAS, state and local borrowing costs will increase by an estimated 20 to 30 percent if the interest on tax©exempt bonds is subject to federal income tax, and this added burden will be reflected in reductions in public services or by increased state and local taxes, and WHEREAS, shifting the tax burden from the national level to state and local governments is an illusory savings for taxpayers and provides no net tax relief, and WHEREAS, further restrictions on the use of tax©exempt bonds will seriously impair the ability of state and local governments to finance essential services and facilities, including schools, prisons, roads, water, gas, electric, sewer, transportation and other basic functions, to the detriment of all citizens; NOW, THEREFORE BE IT RESOLVED: that The Metropolitan St. Louis Sewer District calls upon Congress and the President to recognize that the state and local burden of maintaining and expanding the national infrastructure and providing citizens with needed basic governmental services cannot be met without tax©exempt bonds, and to resist all further efforts to reduce the use of such bonds to finance governmental projects. The foregoing Resolution was adopted July 24, 1990.