Investing in our communities and critical infrastructure
As the leading voice for excellence in public finance, NAST advocates for legislation that ensures responsible, empowered growth at low costs to taxpayers. Responsible public finance makes critical projects such as transportation (such as roads, bridges and airports), utilities, and education possible and feasible.
By leveraging financial tools, advocated by NAST, state and local governments have saved billions of dollars by allowing them to provide more comprehensive savings at lower costs to their taxpayers.
State Debt Management Network (SDMN)
A Network of the National Association of State Treasurers
Key Legislation
Advance Refunding
Why Advanced Refunding is necessary
Advanced Refunding provisions of S. 1453 and H.R. 1837 would restore ability for states to advance refund their tax-exempt municipal bonds. A refunding occurs when the proceeds from one bond are used to pay off another bond, typically at a lower interest rate. State and locally issued bonds are traditionally used for financing of infrastructure projects.
The use of this tool saves taxpayers’ money and frees up cash flow for additional projects like transportation (such as roads, bridges and airports), utilities, education, and other general purpose bonds. By using this financial tool, state and local governments have saved billions of dollars by allowing them to provide more comprehensive savings at lower costs to their taxpayers.
If these provisions are enacted, this would restore the option to conduct advance refundings of bonds that was eliminated in the Tax Cuts and Jobs Act of 2017. Prior to that law, state and local jurisdictions could issue one advance refunding per tax exempt municipal bond at a lower rate of the original bond. Between 2012 and 2016, bonds totaling approximately $391 billion were issued that were then subject to advance refunding totaling about $12 billion on infrastructure investments; funds that could be used for new projects. By eliminating the ability for state and local governments to issue tax-exempt advance refunded bonds imposed substantial financial costs to them. NAST supports legislation to reinstate this critical financing tool.
NAST Policy Resolution on Preserving, Enhancing, and Restoring the Tax-Exempt Status of Municipal Bonds