Sanchez Bill Would Give Schools a Break on Bonds
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School districts nationwide would avoid repaying interest on bonds sold to fund new schools under a bill submitted Wednesday by Rep. Loretta Sanchez (D-Garden Grove).
Sanchez spokesman Lee Godown said the bill, the Expand and Rebuild America’s Schools Act, will now move to the House Ways and Means Committee.
Sanchez has acknowledged she will have a tough time getting the bill through the Republican-controlled Congress but has remained optimistic that schools might have a new tool to fund construction and cope with overcrowding.
Under the bill, school districts would still have to pass their own bond measures and repay the principal. But the federal government would give bondholders tax breaks equal to the amount of interest they are owed. The federal government would give up about $800 million in tax revenue over the two-year trial period.
On a typical 25-year bond that raises $5 million, a school district has to repay an estimated $8.7 million in interest.
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