contributed….

A bill with bipartisan support at the Capitol in Madison would help create jobs locally and help area communities achieve their development goals, according to State Senator Dale Schultz.

The bill would lower the cost of the capital it takes to create jobs.  It would create a statewide commission to provide communities low-cost expertise when bonds are issued to provide financing for community and economic development projects that create jobs.

The projects financed with the bond proceeds could be owned by the private sector or a unit of government.  For private sector projects, all risk is borne by the lender and the borrower and there is no risk to any taxpayers. 

Because the issuer of the bonds is a municipality or county, the bonds are known as ‘conduit bonds’.  Conduit bonds are tax exempt, making them more attractive to the banks and investors that purchase the bonds.

“Bond financing is especially needed for big projects because the recession has frozen much of the credit market,” said Schultz.

The statewide commission created under Senate Bill 399 will help Wisconsin communities more quickly realize job creation potential from $3.8 billion in Midwest Disaster Area (MDA) Bonds and $238 million in Recovery Zone Facility Bond authority recently issued at the federal level.

Two weeks ago, Schultz championed a plan to make more bonding available to a rural area for big development projects that are ‘shovel ready’.

“Projects planning to use the newly available bond financing include a major sports complex in Juneau County and a wind turbine blade manufacturer near Wisconsin Rapids,” said Schultz.

Current state law already lets local governments issue federally tax-exempt municipal bonds for public purposes and conduit bonds for private projects that serve a public benefit.