Investment in Infrastructure and Other Public Capital Facilities
A national consensus has developed regarding the need for increased investment in infrastructure and other public capital facilities. Increased saving and investment is critical if the United States is to rebuild and expand its public capital stock to improve productivity, education and our quality of life; meet health, safety and transportation needs; and move into the twenty-first century on a competitive level with the other industrialized nations of the world.
While state and local governments carry a very special responsibility for building, maintaining, and rehabilitating public facilities, they cannot do it alone. The Government Finance Officers Association (GFOA) recommends a renewed federal commitment to promote, encourage and participate in investment in infrastructure and other public capital facilities. Specifically, GFOA supports the following federal actions to assist state and local governments to finance infrastructure and other public capital facilities, especially federally mandated infrastructure facilities.
- Provide ongoing financial assistance to state and local governments. Such programs should
- expand the state revolving loan fund programs to include financing for all types of infrastructure facilities,
- encourage state and local governments to leverage federal funds to derive the greatest benefit from limited federal resources,
- require a state and local government matching financial contribution, and
- recognize the special needs of fiscally distressed communities by including set-asides for such communities and providing special exemptions from matching and programmatic requirements and cross-cutting requirements that impede participation in such programs. Ÿ Adopt and modify federal tax law provisions affecting tax-exempt municipal bonds, including the recommendations of the Anthony Commission on Public Finance. Such changes should
- remove or modify restrictions affecting the issuance of municipal bonds that are overly burdensome and costly such as the arbitrage rebate requirement,
- recognize a new type of public-purpose, tax-exempt bond or eliminate current law restrictions on tax-exempt financing to permit and encourage public-private partnerships,
- adopt new savings programs to encourage investments in tax-exempt securities, and
- modify existing federal tax policies related to the alternative minimum tax and the bank interest deduction to attract a broader base of traditional investors--individuals, banks and corporations--to the municipal bond market.
- Modify federal tax policies that impede the development and functioning of state bond banks and bond pools and other state credit assistance programs.
- Spend the dedicated federal highway and airport trust fund moneys for the transportation purposes for which they were accumulated.
- Provide full funding for programs established under the Intermodal Surface Transportation Efficiency Act.
Adopted: May 4, 1993