During the 116th Session of Congress, Advance Refunding experienced significant progress and bipartisan support in both chambers. In the House, H.R. 2772, the Investing in Our Communities Act, was introduced by the co-chairs of the House Municipal Finance Caucus, Reps. Dutch Ruppersberger (D-MD) and Steve Stivers (R-OH). In the Senate, S. 4129, the Lifting Our Communities through Advance Liquidity for Infrastructure (LOCAL) Act, was introduced by Sens. Roger Wicker (R-MS) and Debbie Stabenow (D-MI).
- The 2017 Tax Cuts and Jobs Act (TCJA) repealed this critical cost-savings tool for state and local governments and has limited the options to refinance debt, which could free up capital and be put to immediate public works purposes.
- Having the option to refinance debt is a valuable financial management tool especially since interest rates will certainly fluctuate over the lifetime of outstanding governmental bonds (which in many cases is 30 years). Without advance refunding bonds, state and local governments will pay more in interest, a cost that must be paid by state and local taxpayers.
- Urge your Senators and Representatives to cosponsor these important bills and to call on leadership of their respective chamber to include this in any infrastructure or stimulus legislation.
The FLC has produced multiple research and advocacy materials to inform Congress of the impact the loss of advance refunding has had on public finance officers and the communities they serve. Click here for GFOA’s Advance Refunding resource page.