A big win that the League has been working on for a couple of years was the passage of the main bill (HB 5550) in the municipal bond debt refinancing package this morning. The other three bills (HBs 5551-5554) were held up for political reasons, but the League is very optimistic that they will be passed in the spring. This package of bills would give local governments the ability to refinance debt to make lower payments and stretch out terms, much like what people do with their home mortgages. Local units of government do not have to get a lower interest rate; they can refinance at a higher rate. Under the legislation, locals must get approval for refinancing through the Department of Treasury and additional public notification must be done before the refinancing occurs. In the tough times we are facing during this unprecedented economic downturn, this financial management tool will help many of our communities ride out this wave. The three bills that did not pass deal with refinancing bonds for certain tax capture entities established before 1994.
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