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with the majority in other industries. If replacement policies are not in place, there will be a cumulative $1.5 trillion loss in gross state products and a $2.6 trillion reduction in business output from 2019 to 2023. States and health care providers will be particularly hard hit by the funding cuts. Tax Reform Municipal Bond Tax Exemption Another top priority for Congress is reforming the tax code, which House and Senate Republicans plan to do through the FY 2018 budget resolution, which is expected to come up this spring. The tax package may, in part, help to pay for an infrastructure package. President Trump and Congress have proposed including significant cuts to income tax rates, keeping rates low on investment, and to eliminate the estate tax. A serious concern for local jurisdictions is a proposal that would eliminate the tax-exempt status on municipal bond interest, which is critical for job and infrastructure creation, and has been on the table in the past and may resurface again. It is estimated that eliminating the tax -exemption would generate approximately $500 billion over 10 years to pay for other tax cuts. The President has previously promised to work to maintain the tax-exempt status. State & Local Tax Deduction The President's tax plan would cap itemized deductions for higher earners, and the Republican tax reform plan would entirely eliminate the state and local tax deduction. New York Governor Andrew Cuomo, and other state and local leaders, have asked Donald Trump not to eliminate this deduction, arguing that the cut would devastate states like New York and California. The deduction is known to disproportionately benefit wealthy individuals and Democratic areas like major cities. Moreover, this provision is among the most expensive for the federal government. The tax reform blueprint released by House Republicans in June 2016 lowers tax rates, but eliminates all itemized deductions, except those for mortgage interest and charitable giving. Quantifying the impacts of doing away with this deduction will be important to advocacy efforts. Transportation/Infrastructure President Trump's pick to lead the Department of Transportation, Elaine Chao, was confirmed by the Senate on January 31. Chao will likely be involved in helping the GOP develop an infrastructure proposal. Chao is the wife of Senate Majority Leader Mitch McConnell (R-KY), and served eight years as Deputy Secretary of Transportation during the George H.W. Bush Administration. Although Trump promised a $1 trillion infrastructure bill in his first 100 days in office, the timing of a plan has been delayed by a full Republican agenda. Moreover, Republican leaders have not yet decided how to pay for the investment nor what types of infrastructure will be included. On the campaign trail, Trump claimed that the bill will be revenue -neutral, use public - private partnerships as a pay -for, and provide tax incentives to leverage private investments, which will be difficult to deliver. This would only work for money -making infrastructure projects, which includes airports and toll roads, but excludes many important modes. The President has also considered creating a national infrastructure bank. Democratic leaders Nancy Pelosi (D-CA) and Chuck Schumer (D-NY) have said that an infrastructure package may be an area where Democrats can work with the new Administration. 0