Last week, we reported that SB 5188 was scheduled for public hearing in the House Consumer Protection and Business Committee. After lengthy discussion in Committee, it’s now scheduled for a committee vote.

SB 5188 establishes a state public financial cooperative to provide a substantial capital lending program for member jurisdictions. Under the bill, local governments would have the option to join the cooperative through a membership fee. The cooperative would then be able to borrow money and issue bonds based on the strength of their members’ deposits and support a statewide public lending tool for infrastructure.

The bill defines eligible infrastructure projects to include streets and roads, bridges, water systems, storm and sanitary sewage systems, solid waste handling, pollution control facilities, schools, communication systems, docks and wharves, mass transportation facilities and equipment, public housing, fire suppressing and emergency services equipment and facilities, energy generating, conservation, or transmission, and more.

Cities are well-aware of the vast need for reliable, well-preserved public infrastructure. What’s more, cities have experienced a dramatic reduction in state infrastructure funding programs (evident in the continual sweep of the Public Works Trust Fund), and cannot keep pace with the deterioration of public infrastructure systems due to the arbitrary one percent property tax cap.

Given that expenditures continue to outpace revenues, cities’ structural budget deficit prohibits jurisdictions from making critical investments for their communities—including the installation of public broadband, expanding access to public transportation, and providing updates to outdated sewer and wastewater systems. Cities are all too aware that such investments are directly correlated with the economic vitality of their communities.

AWC supports efforts to allocate greater funds for city infrastructure but remains concerned by the costs and potential financial burden imposed on cities, unmitigated risks, and outstanding questions about how a state public cooperative would be structured and funded. The bill was amended in the Senate to include an additional study by the Office of the Treasurer. AWC believes this to be a positive additional step to answering some of the remaining questions about how the financial cooperative would work.

Dates to remember

SB 5188 is scheduled for executive session in the House Consumer Protection and Business Committee on March 25 at 10 am.