This year’s budget reconciliation bill has the potential to dramatically alter the fiscal relationship between states and the federal government. Some policymakers have proposed repealing the municipal tax exemption that has been at the heart of state financing for over a century. Others have suggested cutting federal spending by shifting the burden for certain outlays to state and local governments. In this episode, we talk with Emily Brock, Director of the Federal Liaison Center at the Government Finance Officers Association, about the critical role the muni tax exemption plays in local infrastructure investment, how states are adjusting to possible spending cuts from the federal government, and how the municipal bond market is responding amidst the policy uncertainty.