The Urban Development Bank

I want to discuss with you one proposal among many designed to bring more money to the states and municipalities. In the Johnson Administration we called it the Urban Development Bank, or URBANK. The present administration calls its version the Environmental Financing Authority. There are significant differences between the two, but both raise money through the sale of taxable bonds and lend to public bodies at tax-exempt rates, the difference being met through Congressional appropriations. At the heart of the Urban Development Bank, and perhaps at the periphery of the Environmental Financing Authority, is the goal of improving and expanding the existing municipal bonds market. For next to state and local taxes, the municipal bond market represents the largest source of funds for states and cities.