State treasurers lobby for advance refunding
State treasurers fanned out on Capitol Hill Tuesday on a mission to educate senators and House lawmakers on the benefits to state governments of restoring advance refunding for tax-exempt bonds.
Oklahoma Treasurer Randy McDaniel acknowledged at midday that he didn’t yet know if his home state’s senior senator, Republican Jim Inhofe, was acquainted with the issue.
“We’re going to meet with them today to find out and see where they are on it,”said McDaniel, who added he also planned to meet with three of the state’s five House members.
“Hopefully we will get a good platform to talk about this issue,” McDaniel said. “I think we are meeting with some people who have a lot of experience so they will be familiar with the general topics. We look forward to talking about any of the details they want to ask us about.”
Oklahoma's junior senator, Jim Lankford, has been involved in bipartisan legislation with Sen. Cory Booker, D-N.J., to end tax-exempt bond financing for sports stadiums used by professional teams.
State treasurers, however, are sticking to a more basic message about the use of tax-exempt bonds to finance public infrastructure and how restoration of advance refunding would lower those costs.
Tuesday marked the third and final day of the annual legislative conference of the National Association of State Treasurers.
Lynne Riley, state treasurer of Georgia, said restoration of advance refunding is “absolutely” the top issue for state treasurers.
“We need to have the conversation,” said Riley. “I think the education of our congressional delegations is important so they can understand the value to keep the costs down in their hometowns.”
Riley said she worked for the election of Republican Sen. David Perdue in 2014 and knows that he already appreciates the value of tax-exempt municipal bonds.
However, Sen. Kelly Loeffler, R-Ga., has served in the Senate only since Jan. 6 following her appointment by the governor to fill the seat vacated by the resignation of Sen. Johnny Isakson for health reasons.
Riley said he had no idea whether her state’s new senator is aware of how the termination of advance refunding has handcuffed the ability of state governments to lower their costs.
“My appointment is in her office later today,” said Riley. “I hope to rectify that.”
NAST President Deborah Goldberg said there appears to be broad bipartisan support in both chambers of Congress for restoring advance refundings.
The problem is finding a legislative vehicle that advance refunding could be inserted into and the most likely candidate is a reauthorization bill for the Highway Trust Fund.
Although the current authorization expires Sept. 30, Congress is likely to enact a short-term reauthorization because the Congressional Budget Office has estimated money in the Highway Trust Fund won’t be exhausted until mid-2021.
The treasurers were told at a briefing by congressional staff that a highway reauthorization this year still has a small chance of happening.
“It sounds to me that if there is excitement around the reauthorization of the highway bill, and topics get brought up, anything is possible,” said Goldberg. “Advance refunding could be in that group because it will really help fund infrastructure.”
Utah State Treasurer David Damschen said he questions whether a restoration of advance refunding can get enacted this year, but it seems doable to him.
“I have questions about what will get done in an election year, but given that there’s good bipartisan support I’m hopeful,” said Damschen.