Markets In Action

How Bonds Add Up to a New American Infrastructure

Across the country, municipal bonds are providing the funds for paving roads, laying water pipes and building hospitals. But just how much do bonds provide? Find out below:

  • Counties, states and other localities financed $3.2 trillion in infrastructure investment through long-term tax-exempt municipal bonds between 2003 and 2012, reports the National Association of Counties. This is 2.5 times more than the federal investment.
  • Three-quarters of the total United States investment in infrastructure is accomplished with tax-exempt bonds, according to the National League of Cities. The Municipal Securities Rulemaking Board notes that more than 55,000 state and local governments, authorities and agencies issue bonds.
  • $514 billion in financing for primary and secondary school buildings was secured with long-term tax-exempt bonds between 2003 and 2012. Following schools, the next largest infrastructure categories using tax exempt financing were hospitals ($288 billion); water and sewer facilities ($258 billion); roads, highways and streets ($178 billion); public power projects ($147 billion); and mass transit ($106 billion).
  • Education receives a significant amount of infrastructure investment through municipal bonds. A recent report from the National Association of Counties, the National League of Cities and the United States Conference of Mayors found that primary and secondary schools accounted for nearly one-third of state and local infrastructure investment financed by tax-exempt bond issuance between 2003 and 2012.
  • Tax-exempt municipal bonds have financed over four million miles of roadways, 500,000 bridges, 1,000 mass transit systems, 16,000 airports, 25,000 miles of intercoastal waterways, 70,000 dams, 900,000 miles of pipe in water systems and 15,000 wastewater treatment plants in the United States, according to the National League of Cities.
  • Local governments save an average of 25 to 30 percent on interest costs through tax-exempt municipal bonds as compared to taxable bonds, according to the National League of Cities. Additionally, municipal bond investments in infrastructure create opportunities for other economic sectors such as the construction industry.