President-elect Donald Trump is calling for $1 trillion worth of infrastructure spending that would be financed in part through tax credits to investors and construction companies—potentially supplanting the use of municipal bonds as a popular tool to finance bridges, roads, and other public projects.

States and local governments are also concerned that Trump and Congress may move to tax municipal bonds to pay for credits or tax cuts in other areas.

"Stated simply, state and local governments will want to preserve the existing rule for tax exemption of municipal bond interest because to eliminate it would increase the cost of borrowing," Charles S. Henck, a Ballard Spahr LLP partner who practices in public finance and tax law, told Bloomberg BNA Nov. 28.

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