FRANKFORT-Cities, counties, school districts and other local government entities would have new ways to increase investment revenue under a bill approved today by the House Local Government Committee.
House Bill 75 sponsor Rep. Steve Riggs, D-Louisville, said most local governments now rely on investments like securities and certificates of deposit, often at a poor rate of return. HB 75 would allow them to pursue more aggressive investment through mutual, closed-end and exchange-traded funds and through high-quality corporate bonds, all within certain limits and under the guidance of a professional investment adviser.
The new options would help local governments significantly increase revenues at a time when less money is available from the state and federal government, said Riggs.
“And it allows them to increase revenue without raising taxes,” said Riggs.
He said he generally expects local government investment returns to increase “fivefold” under the proposal.
“The idea is that this is an innovative way for local governments who provide services to the public to increase revenue while keeping the pressure off taxpayers,” said Riggs. “And all within certain limits.”
The bill would also tighten requirements for credit rating agencies that rate securities and other investments currently used by local government entities, or may be used by those entities should HB 75 become law.
HB 75 now goes to the full House for its consideration.