The Treasury Department says a bond program funded by the Obama administration's stimulus bill will save state and local governments billions in borrowing costs.

The "Build America Bonds" program lowers borrowing costs for governments building schools, hospitals, transportation and similar projects. The Treasury pays the governments 35 percent of the interest payment on any bonds they issue for these projects.

Treasury says state and local governments will spend $12.3 billion less than they would to issue regular tax-exempt municipal bonds.

Governments in 48 states had raised $90 billion through the program as of Wednesday. The borrowed funds are paid back over time using tax revenue.