A day after massive cuts in New Jersey's education spending were proposed in Trenton, U.S. Rep. Bill Pascrell, Jr. (D-NJ-8) today applauded the federal government's announcement of $11 billion to be bonded for the construction of public schools across the nation. New Jersey's share of the bonding is $216 million, with $25.8 million dedicated to building schools in the city of Newark.
"The federal Recovery Act is continuing to keep Americans at work while providing educational facilities for future generations," said Pascrell, a member of the House Ways and Means Committee, which has jurisdiction over taxation. "This is particularly good news for New Jersey, where massive cuts in education spending are being contemplated. It is unfortunate that this funding won't be able to keep teachers in classrooms if these cuts are approved. But we can be heartened by the federal government's commitment to providing quality school buildings for students in New Jersey's public schools. It will keep New Jerseyans working as well as make an important investment that will benefit our children."
Created by the Recovery Act, qualified school construction bonds help state and local governments obtain low-cost financing for much needed public school improvements and construction. Investors who buy these bonds receive Federal income tax credits at prescribed tax credit rates in lieu of interest. These tax credit bonds essentially allow state and local governments to borrow without incurring interest costs.
The Recovery Act provided for the issuance of $11 billion of qualified school construction bonds by states and large local educational agencies in 2009 and $11 billion in 2010. The 2010 allocations include $6.6 billion of bonding authority to the 50 states and the remaining $4.4 billion of volume cap to 103 large local educational agencies under a statutory formula tied to levels of federal education grant funding.