Mayor Tom Leppert's in D.C. this morning at the invite of Barney Frank, whose House Financial Services Committee is set to discuss why it's become so danged difficult and cost-prohibitive for cities to issue bonds -- and how Washington can fix it, despite the Fed's "important misgivings" about guaranteeing municipal bonds. The hearing, which kicks off at 8:30 C.S.T. and deals with four pieces of legislation aimed at making it easier for cities to take a swim in capital markets, will be broadcast in its entirety on the committee's Web site; Sam's already got his popcorn ready. But late last night, the committee made Leppert's testimony available -- all 14 pages of it, not one of which says "convention center hotel" anywhere. This brief excerpt by way of introduction:
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At a time when communities are confronting decreased revenue and growing unemployment, local governments have increasingly been unable to access the capital markets due to prohibitive borrowing costs. Local government actions are not to blame for this credit crunch, which has arisen solely as a result of the global financial crisis.
This has a significant impact on our economy at a time we need to create jobs and economic activity, this lack of liquidity is holding back key projects that could have an enormous impact on our local and national economy. Indeed, opening up the municipal bond market could be a major stimulus to the economy. This would have the additional advantage of creating a significant economic stimulus without a Federal outlay of funds. By increasing the support of the municipal bond markets, we will see many projects move forward, creating thousands of jobs.
In Dallas, we have several major projects we would move forward with if the municipal markets return to a more "normal state." Cities and States across the country are in the same position. We have also put several public works projects on hold until the bond market conditions improve. These include the substantial water and sewer infrastructure construction and improvements to Love Field that are mandated by law. We would like to proceed with these projects in order to put people back to work locally and take advantage of reduced construction costs. These are just a few of the many projects on hold in Dallas and many other cities across our nation waiting on market conditions to improve.