Infrastructure and Municipal Finance

After decades of underinvestment, we face an extreme infrastructure deficit in the United States. SIFMA and its members are committed to raising awareness and working with public-private and industry partners to address the spending shortfall and the critical need to fund the restoration and improvement of our nation’s crumbling infrastructure.

Municipal bonds finance the bridges, roads, schools, health care facilities, water and sewer facilities, airports and seaports that our communities rely on – it is a critical source of funding for infrastructure projects. Building, maintaining and improving our infrastructure also creates jobs and facilitates economic growth.

The American Society of Civil Engineers (ASCE) estimates that the U.S. needs to invest $4.6 trillion in infrastructure by 2025 to replace failing facilities and maintain the capacity needed for a growing economy and population.

Legislation that includes the necessary financing tools is needed now, more than ever, when state and local governments are facing unprecedented expenses due to the COVID-19 pandemic. President Biden has made infrastructure investment a key component of his agenda. We support these efforts to increase infrastructure spending as well as related economic growth and job creation, and we encourage policymakers to continue to explore funding options to address this crisis.

Bringing a viewpoint that encompasses the breadth of the market with our broker-dealer, investment bank and asset manager members, SIFMA advocates to:

  • Secure the passage of legislation to permit issuers to advance refund their municipal debt on a tax-exempt basis;
  • Authorize a new direct payment bond program on a permanent basis;
  • Expand the volume cap and uses for Private Activity Bonds (PABs); and
  • Increase the annual limit on the number of tax-exempt obligations that may be issued to qualify for the small issuer exception to the tax-exempt interest expense allocation rules.

In addition, we continue to believe that preserving the tax-exemption for interest earned by investors on state and local bonds, which is the financing mechanism for many infrastructure projects undertaken by state and local governments, is crucial.

Our national infrastructure challenges are so complex and large that a single solution is not enough. Infrastructure investment and tax-exempt bonds can also be a key component to green finance. State and local governments are increasingly turning to municipal green bonds to finance projects which align with environmental, social and governance (ESG) goals. For example, the South Davis Sewer District in Utah issued bonds in 2017 for a project to convert organic waste into renewable natural gas for sale to power plants. The $43 million project is expected to generate enough electricity to power 25,526 average U.S. homes and reduce carbon dioxide emissions equivalent to taking 36,515 cars off the road.

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