GFOA is always on the lookout for news items that will be useful for finance professionals, research that might help you do your job better, and legal and regulatory updates you need to know about. Check the GFOA news page for the updates and any relevant GFOA announcements, and see the GFOA Newsletter archive for back issues of our weekly electronic newsletter.
The Municipal Securities Rulemaking Board filed a proposed rule with the SEC that would “govern the core conduct of municipal advisors, including their fiduciary duty to put the interests of state and local government clients ahead of their own,” the Bond Buyer reports.
The SEC’s revised estimates of the compliance burden imposed by its main disclosure rule still contain “gross inaccuracies,” according to a March 27 letter the Securities Industry and Financial Markets Association sent to the SEC. The letter was a response to updated SEC estimates about the amount of time required for market participants to comply with Rule 15c2-12.
This week, the GFOA joined with the National League of Cities, U.S. Conference of Mayors, National Association of Counties, and International City/County Management Association in providing comments to the Senate Finance Committee.
On March 13, 2015, the U.S. Treasury Department announced that it will suspend sales of state and local government series securities until further notice. The suspension is aimed at helping the Treasury manage debt subject to the federal debt ceiling, which the Treasury Department announced would happen on Sunday, March15.
On March 3, 2015, Supreme Court Justice Anthony Kennedy invited a legal challenge over whether states can require out-of-state and online retailers to collect sales taxes. Justice Kennedy’s opinion was issued as part of the Supreme Court’s unanimous ruling in Direct Marketing Association v. Brohl. Kennedy’s comments reveal the court’s awareness of the need for federal intervention that would enable states to collect e-commerce taxes.
What is internal control?
The Municipal Securities Rulemaking Board announced an agreement with Moody’s that will see the credit rating agency post rating updates automatically on the MSRB’s Electronic Municipal Market Access system starting later this year. This is an exciting announcement, as Moody’s is the last of the four major credit rating agencies to agree to post its ratings on EMMA since the official repository for information on municipal bonds came online in 2009.
A misperception persists among some that defined contribution plans save money, when compared with traditional pensions, but several states that switched to DC plans have experienced a much different reality over time, according to a recent study from the National Institute on Retirement Security.
This week the GFOA is circulating a member survey to inquire about your experiences with the SEC’s Municipalities Continuing Disclosure Cooperation initiative. The MCDC initiative was launched by the SEC last March and invited issuers and underwriters to self-report instances of material misstatements in bond offering documents regarding the issuer’s prior compliance with its continuing disclosure obligations.
The Muni Meltdown That Wasn’t, a Bloomberg Brief, discusses the “inexpert testimony” that flew fast and furious during the panic of 2010 and questions why the opinion of non-experts was taken so seriously – especially in light of the fact that none of their dire predictions about an imminent municipal bond market collapse came to pass.
The purpose of the Ask Me Why I Care: Public Service Stories project is to show young people, in this time of virulently anti-government environment sentiment, that government jobs will allow them tackle the most daunting issues in our society and to make a difference in people’s lives.
The GFOA’s Executive Board approved six new best practices and one new advisory at its January 2015 meeting. The board also approved updates to one other existing best practice and two existing advisories. These documents provide recommendations to government finance officers in the areas of budgeting, accounting, retirement benefits administration, debt issuance, and investment management.
Last week Senate Finance Committee Chairman Orrin Hatch (R-UT) kicked off his committee’s work on organizing the Senate’s tax reform plan by announcing five bipartisan working groups to explore the existing federal tax code and identify areas that are ripe for reform. The working groups are: Individual Income Tax; Business Income Tax; Savings and Investment; International Tax; and Community Development and Infrastructure.
On January 15, 2015, the White House announced a new proposal aimed at increasing investment in national infrastructure projects covering surface transportation, water, and broadband. A key component of the program is the Qualified Public Infrastructure Bond program. The program would augment private activity bonds, expanding their scope to include financing for airports, ports, mass transit, solid waste disposal, sewer, and water, as well as for more surface transportation projects.
Despite the best efforts of the state and local community, House Speaker John Boehner (R-OH) was unwilling to bring the Marketplace and Internet Tax Fairness Act to the floor for a vote by the full House of Representatives in the final days of the congressional session. The measure would have enabled state and local governments to compel online retailers to collect and remit taxes from remote sales, and extended the current moratorium on the taxation of Internet access for ten years.
Defined benefit plans are inherently more cost-efficient than defined contribution plans, according to A Better Bang for the Buck, an updated study by the National Institute on Retirement Security. A typical DB plan provides equivalent retirement benefits at about half the cost of a DC plan, and 29% lower cost than an “ideal” DC plan modeled with generous assumptions, according to the study.
Strengthened financial reserves, increased transparency, and an expanded focus on long-term planning are among the highlights of new financial policies approved this week by Houston City Council.
The GFOA joined the State and Local Legal Center and several other national associations representing states and local governments in filing amicus, or “friend-of-the-court,” briefs before the Supreme Court in two important tax-related cases. Decisions in both cases are expected this spring.
As the December 1, 2014, deadline approaches for governments to participate in the SEC Municipalities Continuing Disclosure Cooperation (MCDC) Initiative, the GFOA’s Committee on Governmental Debt Management has released a final alert to provide guidance to governments on the initiative.
Citing an “urgent goal of saving public pensions amid persistent low funded levels and a burgeoning movement to disassemble them, Callan Investments Institute issued talking points “to move the discussion forward around the importance of DB plans.” The research paper cites seven points of discussion, and follows with research, data, and actuarial considerations to back each one.