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New Study Affirms Value of Legislation to Reform Government Building Projects, Taxpayer Group Says

by Courtney Manley / /

A new study from a prestigious research institution is only the latest demonstration of how the Public Buildings Renewal Act (PBRA) can benefit the economy, governments, and the citizens who fund them , according to the nonpartisan National Taxpayers Union (NTU). The legislation would unlock the same type of financial tool for government structures – like schools and first responder facilities – that has allowed Public Private Partnerships to keep other infrastructure projects on time and on budget. The Beacon Hill Institute (BHI) analysis of the legislation found that every dollar of investment enabled by PBRA would boost the economy by $2.80, all while saving taxpayers an average of 25 percent over the lifespan of each project.

“Tax reform and infrastructure reform should be at the top of Congress’s agenda, and this study shows how and why the Public Buildings Renewal Act can play a big part in both these discussions,” said NTU President Pete Sepp. “Especially in areas of the U.S. devastated by recent storms, every single dollar spent on renovating or constructing government facilities has to count. PBRA is up to the job.”

Public Private Partnerships allow efficient and effective management over the life cycle of a project, including not just design and construction, but operation and maintenance as well. Though primarily confined to roads in the U.S., these partnerships are widely utilized for public buildings in other countries, and with great success. The bipartisan PBRA (HR 960 sponsored by Rep. Mike Kelly, R-PA, and S 326 sponsored by Sen. Dean Heller, R-NV,) would generate $5 billion of “private activity bonds” for state and local buildings such as schools, firehouses, and offices. In addition to the research cited above, BHI also found that if PBRA was expanded to include 20 percent of all eligible government building projects, real Gross Domestic Product would increase by more than $8 billion and tens of thousands of jobs would be facilitated.

Earlier this year, NTU organized a coalition of 10 free-market organizations in support of PBRA. A May 2017 open letter to lawmakers from the coalition noted that the Public Private Partnership model, “which is more fully guided by the lifecycle costs of a given project, also has the advantage of transferring the risk of excessive costs or delays from taxpayers to the consortium and its investors.” The signatories also pointed out that the reduced revenue effect of $48 million over 10 years, “already massively outweighed by the savings of [the partnerships] themselves, would be further mitigated in other ways. The pressure on state and local property taxes, and on behalf of ill-advised federal assistance schemes for local construction, would be diminished.”

Sepp concluded that “Beacon Hill Institute’s analysis should be a guiding light for policymakers on both sides of the aisle who understand that taxpayers deserve better value and accountability for public building projects. It’s time to think smarter about infrastructure policy, by passing the Public Buildings Renewal Act.”

NTU is nonpartisan citizen group founded in 1969 working for lower taxes, limited government, and economic freedom at all levels. More information on NTU’s tax and infrastructure policy work, including additional analysis of the Public Buildings Renewal Act, is available at ntu.org. NTU is also a member of the Performance Based Building Coalition, which supports expansion of Public Private Partnerships.