Neal Calls for Return of Build America Bonds Program
Massachusetts Congressman Richard Neal of Springfield is sponsoring legislation to revive the "Build America Bonds" program. A part of the 2009 American Recovery and Reinvestment Act -- OR ARRA -- gave state and local governments the opportunity to raise money for infrastructure projects. Neal toured projects built under the program Friday. New England Public Radio's Adam Frenier reports.
Under the Build America Bonds program, state and local governments could sell taxable bonds to pay for various projects. Under the ARRA, the Federal Government subsidized 35 percent of the interest costs to the body borrowing the money. This lowered the overall cost to the borrower. In Easthampton, Massachusetts, the Hendrick Street Bridge, which provides a vital link to the town's southern section, was replaced in 2011 using these bonds, in conjunction with The state. Easthampton Mayor Mike Tautznik says cities and towns just don't have the money to pay for such projects on their own.
"Cities and towns these days, given the economic climate, we have trouble just making due with the basic services. This infrastructure improvement work is not something we can afford any longer. So we're very dependent on the state and federal government for that kind of assistance and without it, the project would not have been completed".
The legislation calls for the Build America Bonds program to become permanent. The federal subsidy would be covered by eliminating a tax deduction for companies which produce oil. Neal says in addition to providing much needed infrastructure funds, it would also be a way to create jobs.
"The fastest way to get people back to work in an economic downturn is clearly through infrastructure improvements, largely because they have to be done anyway. And the quickest way to get people back to work when you talk to tradesmen and others over the last couple of years, is public investment."
There has been no official word from Republican congressional leaders about the proposal. For New England Public Radio, I'm Adam Frenier.