Our own Mike Cullers was quoted in Law360 on Wednesday in an article about renewed hope for a full restoration of tax-exempt advance refundings of tax-advantaged bonds after their repeal by the TCJA. The article describes the renewed optimism in the muni bond community that tax-exempt advance refundings can be restored, precipitated by the confirmation of Mayor Pete as Transportation Secretary.
As you have probably seen by now, Mr. Buttigieg made clear in his Senate confirmation hearing that he, like Brother Cullers, is a man of refined taste who appreciates the great pleasures of life (fine scotch, advance refundings for debt service savings, etc.). (Other similarities: neither man is a cat.)
At the tail-end of the hearing, in a delightfully deliberate gesture, which you can watch here, Senator Roger Wicker (R-MS), outgoing chair of the Senate Transportation Committee and co-sponsor of a bill in the last Congress that would have brought back tax-exempt advance refundings, asked Mayor Pete if he would support doing so. The new Secretary said he would, and noted that few things gave him more "fiscal pleasure" as Mayor of South Bend, Indiana than tax-exempt advance refundings and the savings that come with them.
The Law360 article is worth a read. It does a good job of surveying the chief players involved in the efforts to fully restore tax-exempt advance refundings. As Mike and the other public servants and lawyers (but I repeat myself!) quoted in the article observe, tax-exempt advance refundings save money in the long run for taxpayers at the federal, state, and local levels, even though there will be a brief period where both the advance refunding bonds and the advance refunded bonds are bearing tax-exempt interest. Although there are ways to address this overlap period without eliminating tax-exempt advance refundings, such as those ably described in recent years by Charlie Almond (R.I.P.) and Steven Gortler in The Bond Buyer, we could all use a bit of pleasure these days. Just bring them back already. We'll give you the name in the headline, free of charge.
Originally published February 11, 2021.
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