LA Times: House tax plan would mean higher borrowing costs for hospitals, schools, affordable housing

LA Times: House tax plan would mean higher borrowing costs for hospitals, schools, affordable housing
November 17, 2017 Peter

Scripps Memorial HospitalHospitals, university buildings and affordable housing projects could become markedly more expensive to develop if the tax plan approved Thursday by the Republican-controlled House of Representatives becomes law. The plan calls for eliminating a tax break on a type of bond financing used to build those and other projects, prompting worries by hospitals, colleges and housing groups that they could be forced to cut services, raise prices or cancel projects. They’re hoping the Senate tax plan, which does not eliminate the tax break, comes out on top. Nonprofits and affordable housing builders are able to borrow money by selling so-called private-activity bonds, which share a key feature with municipal bonds issued by government agencies to finance public projects: The interest income paid to bondholders is not subject to federal or state income tax.

 

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