Wendy Sherman: “both parties agree that the tax code should help school districts issue school bonds and build schools. But this bill…”

“both parties agree that the tax code should help school districts issue school bonds and build schools. But this bill provides only half of the tax credits for school bonds that we need. It has weasel words on Davis-Bacon, which means we will get substandard schools built at substandard wages. Worse yet, it allegedly helps our school districts by dealing with the arbitrage provisions. It will not build a school on Elm Street. It will build skyscrapers on Wall Street. It allows and encourages school boards to take the bond proceeds to Wall Street and arbitrage them in risky investments. Is that not how Orange County, California, went bankrupt just a few years ago? We need provisions that provide tax credits so that school boards can issue school bonds and have the Federal Government, in effect, pay the interest on those bonds. What we do not need is a provision that allows school districts to take bond proceeds, encourages them to delay construction, and urges them to go play the market. I know that the bond councils out there dream that they will become investment bankers, but that is not what school bonds are all about.”