U.S. Reps. David Kustoff (R-TN) and Dutch Ruppersberger (D-MD) recently introduced legislation that seeks aid from local and state governments in economic development and job creation.
The Investing in Our Communities Act would restore tax-exempt advance refunding for municipal bonds and enable local and state governments to invest more efficiently in projects throughout their communities.
The legislation is co-sponsored by U.S. Reps. Andy Barr (R-KY), Brian Fitzpatrick (R-PA), Andrew Garbarino (R-NY), Dan Kildee (D-MI), Derek Kilmer (D-WA), and Gwen Moore (D-WI).
“It is crucial that every state and local government has the ability to invest in their future and make their communities a better place to live and raise a family,” Kustoff said. “I urge my colleagues to support this important legislation that will help grow our nation and carry us further into the 21st century.”
Bill proponents maintain advanced refunding allows issuing governments to take advantage of favorable market conditions to reduce their borrowing costs and free up resources for new projects.
“This is a complicated finance issue that has a simple end result – saving American taxpayers money,” said Ruppersberger, House Municipal Finance Caucus co-founder. “By empowering local governments to refinance outstanding bonds for projects such as new roads, schools, hospitals, and fire stations, we reduce their borrowing costs and free up resources for other community improvements. We create even more jobs and, ultimately, reduce the need to raise taxes.”
Securities Industry and Financial Markets Association (SIFMA) President Kenneth E. Bentsen, Jr. said advance refunding permits local and state governments to save billions of dollars in interest costs by refinancing their outstanding debt to a lower interest rate.