Members of House Municipal Finance Caucus Introduce Bill to Strengthen Finance Tool for Community Improvements
May 20, 2019
(Washington, D.C.) – Congressmen C.A. Dutch Ruppersberger (MD-02) and Steve Stivers (R-OH) along with fellow members of the House Municipal Finance Caucus have introduced legislation to strengthen a key tool used by local and state governments to finance new roads, schools, hospitals, fire stations and other public infrastructure projects. The “Investing in Our Communities Act” will enable governments to refinance outstanding bonds for such projects, reducing their borrowing costs and freeing up resources for other community improvements.
The legislation, H.R. 2772, reverses changes made under the tax reform law of 2017, restoring the tax-exemption for advance refunding bonds, which are often used by municipalities to pay off another, outstanding bond. The change enables governments to take advantage of lower interest rates, similar to homeowners refinancing their mortgages. The use of tax-exempt advance refunding bonds saves taxpayers an estimated $2.35 billion a year.
Ruppersberger and Stivers are co-chairs of the bipartisan House Municipal Finance Caucus.
“This is a complicated finance issue that has a simple end result – saving American taxpayers money,” said Congressman Ruppersberger, who is a former County Executive. “We must do everything we can to empower states and cities to invest in infrastructure projects that improve our communities, create jobs and, ultimately, reduce the need to raise taxes.”
“Infrastructure – from roads and bridges to broadband access – improves communities and the daily lives of Americans, and it is the shot in the arm our economy needs to keep growing,” Congressman Stivers said. “It is just commonsense to empower state and local governments to make those critical investments, and help taxpayers save money along the way. I’m proud to work with Congressman Ruppersberger to introduce this bill and to invest in our communities.”
The legislation comes as Congressional leadership engages in talks with the Administration regarding a grand infrastructure package – and how to pay for it. The U.S. currently faces a $2 trillion dollar infrastructure financing short-fall.
The bill is cosponsored by Congresswoman Terri Sewell (D-AL), Congressman Lee Zeldin (R-NY), Congresswoman Eleanor Holmes Norton (D-DC), Congressman Raja Krishnamoorthi (D-IL), Congressman John Garamendi (D-CA), Congressman Derek Kilmer (D-WA), Congressman Henry Cuellar (D-TX) and Congressman Andy Barr (R-KY).
“As a former public finance attorney, I know how important advance refundings are to local governments as a tool for financing critical infrastructure and other community projects. In the past 10 years or so, Alabama advance refunded over $1.4 billion in municipal securities, resulting in savings of approximately $42 million to taxpayers,” Congresswoman Sewell said. “The bipartisan Investing in Our Communities Act will reverse a provision in the GOP tax bill that eliminated states’ ability to advance refund their tax-exempt municipal bonds, making it easier for local communities to support colleges and universities, public health care and transportation infrastructure projects.”
“This legislation will facilitate the continued long-term investment in our country’s infrastructure. Maintaining favorable financing resources for local and state projects ensures that communities across the U.S. can contribute to our national economic growth through access to trade and transport,” said Congressman Cuellar. “My district is home to the largest inland port of entry in the U.S. and serves as a gateway to international trade for our entire country. I have observed, firsthand, the benefits which sustained investment in local and state infrastructure has brought to South Texas. My hope is this bill will provide similar access to other communities across the U.S. I thank my colleague and friend, Congressman Ruppersberger, for introducing this legislation as we seek to provide the means to help rebuild our nation’s infrastructure.”