WASHINGTON – Eliminating the tax exemption for municipal bonds over a nine-year period would have cost state and local governments roughly $500 billion in additional borrowing costs, while a cap on the exemption would have cost them about $175 billion, state and local officials here said Tuesday.

Speaking on a panel in the Rayburn House Office Building, they stressed munis are the "primary tool in the toolbox" for funding infrastructure. They said they will resist any efforts to cap tax exemption as part of any comprehensive tax reform plan.

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