Advocates Endorse Bond-Pooling Program
Advocates Endorse Bond-Pooling Program
WASHINGTON, DC — The National Education Technology Funding Corporation (“Eddie Tech™”) today announced that the nation's leading education-advocacy organizations — the American Association of School Administrators, the National Education Association, and the National School Boards Association — have joined together to endorse and help market Eddie Tech's work to fund the future of schools.
Recognizing that many school districts have been unable to take full advantage of the benefits of the expansion of federal tax-credit bonds, Eddie Tech is working with local public school districts across the nation to assemble bond portfolios that can be packaged and sold into the national capital markets. Eddie Tech’s School Investment Pooled-Securities (“SIPS™”) Program will package bonds into pooled offerings to reduce financing costs for school districts and simplify the process by which school districts can issue and investors can invest in these new financing tools.
“Eddie Tech’s SIPS Program can offer efficient ‘pre-packaged’ issuance mechanisms, reduced transaction costs, and more-efficient pricing for school districts,” said Eddie Tech Executive Director Brett Mandel. “Through the work of Eddie Tech, public school districts can access low-cost financing to invest in America’s schools and create an environment that supports excellence in our classrooms.”
Stepping forward to endorse the effort and ensure that school districts across the nation are aware of Eddie Tech’s efforts and informed of their potential benefits, the American Association of School Administrators, the National Education Association, and the National School Boards Association have partnered to make the bond-pooling program a success.
“The National Education Association has estimated that modernizing the nation’s schools will cost billions so we are very excited to promote Eddie Tech’s program to help school districts finance construction and renovation.” said National Education Association Executive Director John Wilson.
“While we were very pleased to see the dramatic expansion of the tax-credit-bond programs, we were disappointed to hear that many school districts have not been able to take full advantage of cost savings,” said Anne Bryant, Executive Director of the National School Boards Association. “We fully support Eddie Tech’s efforts and believe they will reduce borrowing costs and help our school boards meet their ongoing challenge to invest in schools.”
“Our schools administrators are confronted with the task of preparing the leaders of tomorrow in buildings built for yesterday in the middle of a recession” added Daniel Domenech, Executive Director, American Association of School Administrators. “We endorse Eddie Tech’s program and think that it can help us all meet the challenge of improving our educational infrastructure in the most efficient manner.
Eddie Tech is currently working with the American Association of School Administrators, the National Education Association, and the National School Boards Association to finalize program details and anticipates issuing its first bond pool in the spring of 2010.
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The federal tax-credit bonds created and expanded by the 2009 American Recovery and Reinvestment Act are Qualified School Construction Bonds (QSCBs) and Qualified Zone Academy Bonds (QZABs). These bonds provide a significant financial subsidy for school districts by authorizing the U.S. Treasury to pay “interest” to investors in the form of annual tax credits. However, because there is not yet a mature and established market for these bonds, many school districts across America have found it necessary to pay lenders an additional premium of as much as 3.0% or more per year. This raises the cost of much-needed investment in school safety, acquisition of modern technology, and enhancement of the learning environment.
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The National Education Technology Funding Corporation, “Eddie Tech,” is a non-profit organization, recognized legislatively by Congress in 1996 principally to improve education-technology infrastructure. Today, Eddie Tech is working to help local public school districts utilize federal mechanisms to access more cost-effective financing for school construction and renovation. For more information, visit www.eddietech.org.
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