The Municipal Bonds for America coalition warned Friday that a retroactively applied 28% cap on the value of tax exemption would fundamentally alter 100 years of precedent, raise borrowing costs for issuers, limit infrastructure development and constrain economic development, while doing little to help solve the nation’s fiscal crisis.

The group issued the warning in a two-page paper, which also cited an analysis by Citigroup Municipal Strategists that found the value of outstanding municipal bonds could plummet by at least $185 billion because of uncertainty if a retroactively effective cap were adopted.

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