HomeMy WebLinkAboutResolution No. 2256 RESOLUTION NO, 2256
A RESOLUTION OF ERE CITY COUNCIL OF THE CITY OF
DOWNEY EXPRESSING STRONG OPPOSITION TO THE RE-
MOVAL OF THE FEDERAL MUNICIPAL BOND TAX EXEMPTION
WHEREAS, the House Ways and Means Committee has conducted extensive
hearings on the subject of federal income tax reform, including tax
treatment of state and municipal bonds; and
WHEREAS, under the —ise that a few individuals do not pay income
tax, it is now proposed to remove the tax exemption from municipal bonds,
thus shifting an added tax burden from the relatively few municipal bond
holders to the great majority of the tax paying public; and
WHEREAS, interest costs on such bonds would rise dramatically if their
present tax exeolpt status was changed in order to continue to attract
investors. Borrowing costs of local governments thus would increase,
adding further to the burden of local taxpayers; and
WHEREAS, state and local governments would have to depend even more
upon the Federal Government for financial assistance with a consequent
undermining of local fiscal independence and ultimate federal control of
local projects and priorities; and
WHEREAS, to the extent that outstanding bonds are affected, inequitable
capital losses would accrue to to present holders and large scale liquid-
ations would result in further market deterioration; and
WHEREAS, these proposals contravene the doctrine of reciprocal immunity
on tax exemption enunciated more than a century ago by the Supreme Court.
As a result, they raise a serious constitutional issue which could take
years to adjudicate during which time market uncertainty would persist.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES RESOLVE
AS FOLLOWS:
SECTION 1. That this City Council, on behalf of the ninety -seven
thousand people of Downey, does express strong opposition to this unwarranted
action.
SECTION 2. The City Clerk shall certify to the adoption of this
resolution and shall provide for appropriate distribution thereof.
APPROVED AND ADOPTED this 24th day o June 1969.
i. _ .. +l►.r. 0
Mayor
ATTEST:
City Cle ice- /
I HEREBY CERTIFY that the foregoing resolution was duly adopted by
the City Council of the City of Downey at a regular meeting held thereof
on the 24th day of June , 1969, by the following vote:
AYES: 4 Councilmen: Ferri$, Corbin, Morton, Temple
NOES: 0 Councilmen: None
ABSENT: 1 Councilmen; Winton
City Cle ,"