By Holly Moon, Newaygo County Treasurer
As a county treasurer, my focus every day is to advocate for the taxpayers I serve. That means being prudent with your money, investing in our local economies, and making our voices heard when it can make a difference in the lives of our families, neighbors and communities. That’s why I’m speaking out now — because we have a real opportunity to protect taxpayers and free up funds for investing in our communities.
During this lame duck session, Congress has an opportunity to protect our communities and taxpayers from the negative impact of rising interest rates. There is bipartisan legislation ready to be voted on that would protect our local governments from higher interest rates and borrowing costs by restoring money market funds as an important source of low-cost capital.
H.R. 2319 in the House and S. 1117 in the Senate would effectively reverse a harmful Securities and Exchange Commission (SEC) regulation adopted a few years ago that increased borrowing costs for local governments, making infrastructure projects and other investments more expensive. This legislation has the support of more than 300 national, state and local organizations, including the Michigan Association of County Treasurers, Michigan Chamber of Commerce, Michigan Association of State Universities, Michigan Association of Counties, and the Michigan Municipal League.
As of result of the SEC regulation, investors shifted $1.2 trillion in assets from money market funds that support local economies to funds that invest strictly in U.S. government debt. According to a recent study by Treasury Strategies, state and local government entities in Michigan lost over $2 billion in funding from tax-exempt money market funds between January 2016 and April 2018.
State and local governments, and the citizens they represent, have in recent years taken the brunt of Washington policy decisions that only seem to benefit the largest and most politically-connected Wall Street firms. Reversing the SEC’s money fund rule is one thing Congress can do to benefit our local communities in Michigan and throughout the country.
That’s why a broad coalition of elected leaders, public- and private-sector finance officers, trade unions and local chambers of commerce are calling on Michigan’s congressional delegation to support H.R. 2319 and S. 1117. This legislation will allow our state and local governments to utilize lower-cost borrowing options, increase investments in infrastructure projects that benefit our communities, and provide increased economic opportunities for our citizens.
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