Ruppersberger, Stivers Introduces Bill to Strengthen Finance Tool for Community Improvements
(Washington, D.C.) – Congressmen C.A. Dutch Ruppersberger (MD-02) and Steve Stivers (R-OH) today reintroduced legislation to strengthen a key tool used by local and state governments to finance community projects – which will be especially important as they continue to recover from the COVID-19 crisis. The “Investing in Our Communities Act” enables governments to refinance outstanding bonds for projects such as new roads, schools, hospitals and fire stations, reducing their borrowing costs and freeing up resources for other community improvements.
The legislation 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. “County and state governments have served on the frontlines of the COVID-19 pandemic, facing historic revenue losses amid unforeseen costs, while still cutting paychecks to our teachers, law enforcement and public health workers. We must do everything we can to help them invest in projects that improve our communities, create jobs and, ultimately, reduce the need to raise taxes.”
“Municipal financing makes so much of daily life possible; from highways to telecommunications towers, municipal bonds allow for the delivery of services and connections for millions of Americans,” Congressman Steve Stivers said. “By enhancing the status of tax-exempt bonds, we’re empowering state and local governments, and saving taxpayer money along the way.”
The legislation comes as Congressional leadership engages in talks with the Administration regarding a national 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 John Garamendi (D-CA), Lee Zeldin (R-NY), Brian Fitzpatrick (R-PA), Andy Barr (R-KY), Joyce Beatty (D-OH), Terri Sewell (D-AL), Julia Brownley (D-CA), Eleanor Holmes Norton (D-DC), Earl Blumenauer (D-OR), Cindy Axne (D-IA), Andrew Garbarino (R-NY), Daniel T. Kildee (D-MI), James P. McGovern (D-MA), Henry Cuellar (D-TX), Haley Stevens (D-MI), Gerry Connolly (D-VA), Judy Chu (D-CA), Jimmy Panetta (D-CA), Derek Kilmer (D-WA), Dean Phillips (D-MN) and Fred Upton (R-MI).
“Allowing our cities and towns to refinance their outstanding bonds will save our communities, and our constituents, money,” said Congressman Dan Kildee, a former County Treasurer. “These savings can be reinvested directly into our communities to help support public safety, fix local roads, fund libraries and provide other vital local services. The Investing in Our Communities Act will help to support our neighborhoods and the people that live there.”
“It is critical that we ensure states and local governments can finance infrastructure projects, from roads and broadband to ports of entry, to support our country’s economic recovery and create long-term growth,” said Congressman Henry Cuellar. “This legislation will allow these entities to refinance their debt to achieve lower interest rates, saving tax payer dollars and freeing up funding for critical infrastructure investments. As the representative of the busiest land port of entry, I am committed to improving our nation’s infrastructure to create jobs and boost long-term productivity and competitiveness.”
“Our great nation is in dire need of infrastructure investment; an investment in our roads, bridges, and energy grid is an investment in our nation, our economy, and our families,” said Congressman Brian Fitzpatrick. “This timely bipartisan legislation will empower states and cities across the country and municipalities and townships across Pennsylvania to invest in infrastructure projects that will improve our communities and reinvigorate our economy. I am proud to join my bipartisan colleagues as we seek to provide state and local governments with the financing tools they need to invest in their communities, while simultaneously saving American taxpayers money.”
“Congress must ensure our state and local governments continue to have access to financing tools necessary to support investments in public infrastructure, including our schools and hospitals. The Investing in Our Communities Act will ensure municipal bond financing remains a viable option for our communities,” said Congresswoman Julia Brownley.