WASHINGTON — The Joint Committee on Taxation has released revenue estimates for muni bond provisions in President Obama’s fiscal 2013 budget showing a gain of $520 billion over 10 years for the proposed 28% cap on the value of tax-exempt interest and other tax preferences.

The 28% cap is the largest revenue raiser in the president’s budget, according to the JCT’s estimates, which were included in a report released Wednesday afternoon. The committee’s estimate is nearly $65 billion less than the Obama administration’s projection of a $584 billion revenue gain over 10 years.

The proposed 28% cap, which upset the muni market, was first introduced in the president’s jobs bill last fall. That bill failed to gain any traction in Congress. It would apply to single taxpayers with incomes over $200,000 and to married taxpayers filing a joint return with incomes over $250,000, taking effect for taxable years beginning after Dec. 31, 2012.

Muni pros have warned that the 28% cap would hurt the market, increasing borrowing costs for state and local governments and eroding the value of bonds in investors’ portfolios.

All of the revenue provisions in Obama’s budget proposal would cost a total $2.9 trillion from 2012 to 2022, according to JCT estimates. The budget proposes $3.9 trillion in tax reductions, which would partially be offset by $946 billion in revenue raisers.

Most of the revenue losses would come from permanently extending or modifying certain tax cuts enacted in 2001 and 2003, totaling $2.4 trillion.

One such provision would extend through 2013 the issuance of tax-exempt private-activity bonds for qualified education facilities, with annual state volume caps greater than $10 per resident or $5 million. That would result in a revenue loss of $152 million, according to the JCT.

Another provision that would increase arbitrage rebate exception for governmental bonds used to finance qualified school construction from $10 million to $15 million, would cost $73 billion over 10 years.

Indexing the alternative minimum tax for inflation, one of the major tax cuts in the president’s budget, would cost $864.1 billion over 10 years.

Provisions that would simplify arbitrage-investment restrictions and single-family housing mortgage bond targeting requirements, as well as streamline private business limits on governmental bonds, would cost $1.56 billion over the 10-year period, the committee said.

The panel said Obama’s proposal to resurrect and expand the popular Build America Bond program would cost $6.75 billion over 10 years. The BAB program was established under the American Recovery and Reinvestment Act but expired at the end of 2010. BABs are taxable, but the Treasury Department makes subsidy payments to issuers at rates equal to 35% of their interest costs.

The Obama administration also proposed to extend qualified zone academy bonds through calendar year 2013, which would add $235 million to the federal deficit, according to the Joint Tax Committee. The QZAB program, which has been in place since 1997 and permits the bonds to be used for school rehabilitation, received a $1.4 million allocation under the ARRA.

The JCT estimated that to continue certain expiring temporary disaster provisions through 2013, including the Gulf Opportunity Zone Act, would cost $814 million over 10 years. The act expired at the end of 2011, ending the six-year period where Congress gave three Gulf Coast states the authority to issue more than $15 billion of so-called GO Zone bonds.

Obama also proposed to adopt the recommendations the Treasury Department proposed in December to ease restrictions for Indian tribal government tax-exempt bond financing.

The “essential governmental function” standard would be repealed for governmental bond financings and tribal governments would be able to issue tax-exempt PABs for the same purposes as state and local governments under a special national volume cap.

Modifying tax-exempt bonds for Indian tribal governments would cost $323 million over 10 years, the JCT said.

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