Nearly $97 billion in Build America Bonds (BABs), created through the federal Recovery Act, have been issued by state and local governments, institutions of higher education and special districts throughout the nation. The U.S. Department of the Treasury notes the number of the bonds issued through the end of April is fast approaching $100 billion. State and local governments have "saved billions of dollars in net borrowing costs from issuing these bonds," said Alan B. Krueger (pictured), Assistant Secretary for Economic Policy and Chief Economist at the Treasury Department.
 
These bonds are being translated into projects that include public and higher education facility projects and water utility and health care facility improvements. Some cities have opted to use the bonds for sewer projects while states are using them for highway and transit improvements.
 
California has issued the most BABs with a total of more than $21.6 billion. New York is a distant second with more than $10 billion. Among the California projects are sewer improvements for the City of Riverside, improvements at the Los Angeles Unified School District and highway improvements for the Bay Area Toll Authority. Some of the New York projects include transit improvements for the Metropolitan Transit Authority, sewer and water utility projects for the New York City Municipal Water Finance Authority and school improvements through the New York City Educational Construction Fund.
 
By using these bonds, government entities are expected to save an estimate $12 billion over what they would have paid for tax exempt bonds. BABs provide lower borrowing costs for new capital projects because the Treasury Department makes a direct payment to the governmental issuer that equals 35 percent of the interest payment on the bonds. Since the program started over a year ago, BABs now make up 21 percent of the municipal bonds market. To view a complete listing of BABs amounts by state and the projects for which they will be used, click here and look under "Recent Reports."

 

 

Stephen Goldsmith (pictured) began his public service career in 1978 when he was elected Marion County prosecutor. He held that post for 12 years and in 1992 was elected mayor of Indianapolis, a position he held until 1999. Upon leaving that post, Goldsmith founded an Internet startup company and later served as domestic policy adviser to then-presidential candidate George W. Bush. He has been serving most recently as the Daniel Paul Professor of Government at the John F. Kennedy School of Government at Harvard University. He has also worked as an adjunct professor at Indiana University and several other universities. Goldsmith was recently named deputy mayor for operations for the city of New York, effective in June. When he begins his new charge, he will oversee the New York Police Department, the Fire Department of New York and other service agencies in the city.