Reed Visits Jamestown to Discuss Legislation to save Taxpayers through Expanding Use of Local Bank Qualified Bonds
Today Tom Reed visited Jamestown High School to discuss his Municipal Bond Market Support Act, which would expand the availability of bank-qualified bonds, a cost-effective method of financing widely used by local governments and financing authorities.
Bank qualified bonds save tax dollars,” said Tom Reed. “Using local bonds also keeps the control, financing and benefits of capital improvements right in the local economy. These types of bonds can be used for a variety of improvements to facilities like the one in the Jamestown School District.”
Under the bill, local municipal governments and school districts will see their annual ability to utilize bank qualified bonds increase from $10 million to $30 million. The interest rate on bank qualified bonds can be as much as a half percentage point lower than traditional financing, meaning that taxpayers can save hundreds of thousands of dollars on a single bond issuance by using these bonds.
“Bank Qualified Bonds is another vehicle that can provide access to capital for some of the small to medium sized institutions that have needs for their infrastructures and physical plants,” said Gerald Hector, Vice President for Finance and Administration at Ithaca College. “Given the age and heavy usage of the physical plant on some campuses, there is a growing need to modernize or reconstruct building to meet mission objectives. These bonds keep a viable option open for prudent and calculated investments in the plant to be made when it is needed most. Increasing the amount from the $10 million to the $30 million makes sense because of the various needs that will arise, and the timelines in which those needs must be addressed. Having options that institutions can turn to in those times to access capital is a benefit to the overall process.”
“Increasing the bank qualified debt limit will provide local governments with a critical resource to improve our communities at lower costs than traditional bond issuance,” said Dustin McDonald, Director, Federal Liaison Center, Government Finance Officers Association. “Simply put this bill will help governments build and maintain more schools, roads, public transportation systems, water and power infrastructure, and affordable housing and health care facilities while reducing the costs of these projects to taxpayers.”
"NAHEFFA applauds Representative Reed’s leadership in sponsoring this important, bipartisan legislation,” said Michael J. Stanard, President, National Association of Health and Educational Facilities Finance Authorities and Executive Director, Missouri Health and Educational Facilities Authority. “The bill allows state authorities to issue tax exempt bonds at low interest rates on behalf of small nonprofits and charities such as colleges, hospitals, clinics and similar institutions in both urban and rural settings."