Build America Bonds May Be Bad Deal for Cities

Build America Bonds, part of the economic stimulus package that are intended to help cash-strapped cities building roads and schools, have been found to cost cities and taxpayers more over the long-term.

They're supposed to have a more favorable interest rate, with the federal government paying 35% of the interest costs.

"But questions about this multibillion-dollar program are piling up.

For one, Wall Street banks are charging larger commissions for selling Build America Bonds than they do for normal municipal bonds, increasing the costs to the states and cities. For another, the new bonds may be priced too cheaply, enabling quick-footed investors to turn a fast profit as the prices climb, but raising interest costs for taxpayers. "

Full Story: Stimulus Bond Program Has Unforeseen Costs

Comments

Prepare for the AICP* Exam

Join the thousands of students who have utilized the Planetizen AICP* Exam Preparation Class to prepare for the American Planning Association's AICP* exam.
Starting at $245

Essential Readings in Urban Planning

Planning on taking the AICP* Exam? Register for Planetizen's AICP * Exam Preparation Course to save $25.

Create Your Own Paper Block City

Urban Fold is an all-inclusive kit that allows anyone to build the city of their dreams with a few simple folds.
$24.95
Book cover of Unsprawl

Unsprawl: Remixing Spaces as Places

Explore visionary, controversial and ultimately successful strategies for building people-centered places.
Starting at $12.95