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Low Cost (Maybe Free) Bond Money
by Jon Greenberg on
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Let's start with free money. Under the stimulus act, ARRA, New Hampshire can tap into $29,784,000 of interest-free bonds for school construction. The bond has to be issued by the state or a local government body and the money must be used to buy land for, build, or renovate a school building. The bond comes interest free because Washington gives investors a federal tax credit in an amount designed to replace 100 percent of the interest payments on the bonds.
The Bureau of School Approval & Facility Management is in charge of this program. You want other details? You can find them here
http://www.irs.gov/pub/irs-drop/n-09-35.pdf
The state, counties and municipalities can dip into another $225,000,000 in two other types of bonds: Recovery Zone Economic Development Bonds (90 million) and Recovery Zone Facility Bonds (135 million). There are significant tax status differences between the two but the bottom line is that these bonds should be used to spur projects in defined economic development zones. The bonds come with a 45% subsidy from Washington. So if the borrower owes $100 in interest, Washington kicks in $45 of that. The principal of course needs to be repaid too.
For more details:
http://www.treas.gov/press/releases/tg168.htm
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With hundreds of thousands of jobless people about to run out of all benefits, congress has moved to extend unemployment benefits by 14 weeks nationwide for those whose relief has run out, and up to 20 weeks in states — 26 currently — where the unemployment rate is over 8.5 percent.
For the moment, the extra 14 weeks is the number that applies in NH.
The legislation also continues the $8,000 tax credit for first-time home buyers for another five months. It creates a new $6,500 tax credit for certain homeowners who want to buy another home.
At a recent talk to the Business and Professional Women organization I focused on two related issues: If this recession was our Katrina, how much damage did it inflict on the economic infrastructure? One thing we don't know is when credit markets will recover.
So it was with some interest that I read this article in the Washington Post. I think it captures our current economic situation, nationally, and points our eyes in the right direction as we look for signs of true recovery.
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