School Districts Potentially Gain with Infrastructure and Financing Plans

By Marvin Founds posted 05-19-2021 04:18 PM

  

In addition to the proposed American Jobs Plan, which includes funding to upgrade and build new public schools through infrastructure improvement, federal lawmakers are considering a number of options for financing those improvements. However, like the proposed legislation supporting the return of tax-exempt advance refunding bonds that we’ve shared in prior communications, the American Jobs Plan and new financing options have many steps remaining for final approval to be achieved. 

For additional details on the American Jobs Plan for infrastructure improvements, visit the White House’s American Jobs Plan website or click here for the full factsheet overview of the plan, which provides more information regarding the proposed $100 billion to modernize schools with $50 billion in direct grants and an additional $50 billion leveraged through bonds.

Regarding financing options, federal lawmakers are discussing, among other items, a version of the Build America Bonds (BABs) program that was used a decade ago to encourage capital improvement projects coming out of the Great Recession. Like BABs, the proposed financing would include taxable bonds with direct payments to issuers, including school districts. Unlike BABs, the proposed direct pay bonds would be exempt from potentially lower direct pay amounts caused by sequestration.

While details are being debated, school districts may wish to consider whether or not some version of these programs, if approved, could benefit projects at the local level.


Marvin Founds is the Director of Education Finance at Baker Tilly Municipal Advisors, LLP.  614.987.1689 | marvin.founds@bakertilly.com

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