What appeared to be a clear path to passing all the appropriations bills on time is now in jeopardy due to Democratic opposition to Immigration and Custom Enforcement operations that have gone tragically awry in Minneapolis.
"If they don't find a solution, or they decide they don't want to pass the minibusses without Homeland Security in it, then you might see a partial government shutdown or a full government shutdown," said Emily Brock, director of the federal liaison center for the Government Finance Officers Association.
"If I was to speak from my gut, it just seems like it's one of those times of the year and the election cycle where there might be some hand holding that occurs and they lift this across the line."
The comments came during the kickoff of the Debt Committee meeting at the GFOA's winter meeting in Washington D.C. on Monday.
Inclement weather forced many members to attend online but visits to Capitol Hill went on as planned to lobby Congress about perennial pain points attached to municipal bond financing.
"We want to remind you there's this little thing called advance funding out there," said Brock.
"We have plenty of Republicans who are interested in sponsoring and supporting the advance funding initiative."
The advance refunding of tax-exempt bonds was eliminated in the 2017 Tax Cuts and Jobs Act passed during the first Trump administration as a way to help pay for tax cuts.
The muni industry has been trying to bring it back to life and has found Congressional support championed by Reps. David Kustoff, R-Tenn., and Rudy Yakym, R-Ind., who introduced a bill to restore it last
Assuming Congress cannot muster enough support to write and pass a major reconciliation bill before the end of the fiscal year the surface transportation reauthorization bill represents the best hope for bringing advance refunding back.
Restoration requires it to be attached to tax legislation. The transportation bill addresses the fuel taxes that support the underfunded Highway Trust Fund.
Congress is also on the hook to pass a major Farm Bill as the last one expired in 2023 and has been relying on temporary extensions ever since.
"The farm bill is rural and addresses initiatives that are aimed at rural parts of our country," said Brock. "That is certainly a conversation where BQ enters."
The bank qualified rule allows banks to deduct 80% of the carrying costs for bonds from "qualified small issuers" that issue less than $10 million in a calendar year.
The GFOA is supporting raising the cap on bank qualified debt which has been stuck at $10 million since 1986.
The Farm Bill has also been a long-range target for the agriculture sector who is interested in a vehicle for the Modernizing Agricultural and Manufacturing Bonds Act.
MAMBA was reintroduced in the Senate last
Aggie bonds are usually tax-exempt, and the lenders are typically smaller agricultural banks who utilize state development agencies as a conduit.
Below market rates are used to finance land, buildings, livestock, machinery, and refinancing existing debt.
