The State plans to expedite its bond sale for the Purple Line, securing a year’s worth of funding for the public-private partnership (P3) before the end of December. Why? Because the House-passed tax reform package would end private activity bonds (PABs) – the preferred tool for funding the P3.
Reports The Baltimore Sun:
The sweeping tax legislation approved by the House this month would end the so-called private activity bonds, a tool local governments have used for transportation projects, affordable housing and student loans. Supporters say the financing mechanism reduces costs, but critics view it as a subsidy to private businesses.
PABs allow tax-free borrowing by private entities for public purpose projects, like the Purple Line, private school construction, and affordable housing. They are a key tool for facilitating P3s and private investment in public services.
The Senate tax reform proposal does not call for termination of the bonds.
Learn more about how the State seeks to fund major capital transportation projects at the Winter Conference session, Workshop: An Overview of the New Transportation Scoring Law. The MACo Winter Conference will be held December 6-8, 2017 at the Hyatt Regency Chesapeake Bay Hotel in Cambridge, Maryland. This year the conference’s theme is “The Power of Partnership.”
Learn more about MACo’s 2017 Winter Conference: