‘Tis the Season For… Emergency Refunding Bonds

With advance refunding bonds on the chopping block in both the U.S. House- and Senate-approved tax reform proposals, and “all but dead” according to Bond Buyerno one should be surprised to see a litany of expedited county bond sales in the next few weeks.

Advance refunding bonds allow counties to refinance tax-exempt municipal bonds to save taxpayer money on outstanding debt. Currently, counties can issue one advance refunding bond per municipal bond – saving taxpayers billions nationwide on public infrastructure. All signs point to that ending on December 31.

Queen Anne’s County had planned to do its sale early next year, saving the County’s taxpayers approximately $2 million a year. That no longer looks likely.

Wicomico County posted Tuesday that it plans to hold a special session of the County Council to consider a resolution next week to award up to $24.8 million of Public Improvement and Refunding Bonds for County projects.

Also on Tuesday, Moody’s assigned Howard County’s Consolidated Improvement Refunding Bonds an Aaa rating.  Those bonds – $159.4 million – are expected to go to sale next week. Frederick County plans to sell $29.6 million in General Obligation Public Facilities Refunding Bonds next week, too. (Those may have been planned in advance, but even if so, they were planned with foresight.)

Local infrastructure is about to get even more expensive.