LIBERTY, MO – March 10, 2009 – (RealEstateRama) — State Treasurer Clint Zweifel and State Representative Tim Flook, R-Liberty, were in Liberty today to promote legislation that will return $10 to $15 million on Missouri taxpayers’ investments, and reinvest $1 billion in the state’s economy. The legislation, HB 883, also expands and streamlines the Missouri Linked Deposit Program.
Treasurer Zweifel has been traveling across Missouri promoting the legislation, having made stops in Cape Girardeau, Joplin and Springfield. Invest in Missouri legislation, filed in the previous week, removes the statutory interest-rate cap that restricts the amount of return taxpayers earn when their money is invested with community banks as state time deposits.
“Our existing law needs to be changed. It is preventing the state from obtaining competitive interest return on our money deposits in Missouri,” Rep. Flook said. “This is a better policy for taxpayers.”
Missouri statute currently ties its time deposits, similar to a 6-month certificate of deposit, to the return of U.S. Treasury securities maturing over a similar period. That yield has been as low as 0.20 percent of late. Removing the restrictive cap would allow the state to receive a yield closer to the rates offered by banks to an individual, business or other government entity in Missouri. The market rate would be about 2 percent, resulting in increased returns to taxpayers of about $10 to $15 million per year.
“We are one of two states in the nation, and the State Government is the only government entity in Missouri, which restricts the interest rate taxpayers receive when their funds are invested in community banks,” Treasurer Zweifel said. “Without this restriction, my office can immediately place another $250 million in Missouri community banks because of better rates and return $10 to $15 million to taxpayers’ investments.”
The Invest in Missouri legislation also expands eligibility guidelines and streamlines the application process for the Missouri Linked Deposit Program. The Linked Deposit Program is designed to place state funds with community banks at below-market rates so the community bank can issue loans to borrowers at a reduced rate. Loan savings are usually 2 to 3 percent to the borrower. The program’s $720 million statutory cap is only about 30-percent utilized. Expanded eligibility guidelines would open up the state’s small business, job creation, agriculture and alternative energy programs to more businesses and farmers. Local government assistance linked deposits are also become available as part of the legislation.
“It is essential we streamline the application process and expand eligibility,” Treasurer Zweifel said. “At this point in our economy is critical we make good government work better to help pull us out of this crisis.”
The legislation has been assigned to the Financial Services Committee in the House, but is not scheduled for a hearing. Treasurer Zweifel said Sen. David Pearce, R-Warrensburg, has filed Senate Bill 542 regarding the Missouri Linked Deposit Program, which has been assigned to the Governmental Accountability and Fiscal Oversight Committee.
“This is a bipartisan issue, and we are seeing great bipartisan support,” Rep. Flook said. “Allowing taxpayers to receive fair market return on their investments is something everyone can agree on, and we are doing it with no new spending and no new programs.”
“These are real ideas we are bringing to the table,” Treasurer Zweifel said. “The responsible decision requires us to act now to reinvest in the state, incentivize job creation and get taxpayers the fair return on their money.”
Invest in Missouri Web site
http://www.treasurer.mo.gov/TreasurersEconomicDevelopment.asp
Missouri Linked Deposit Program
http://www.treasurer.mo.gov/LinkedDeposit.asp
Track HB883 here
http://www.house.mo.gov/content.aspx?info=/bills091/bills/hb883.htm
Track SB542 here
http://www.senate.mo.gov/09info/BTS_Web/Bill.aspx?SessionType=R&BillID=968243
