Zweifel Champions Investing in Missouri
Treasurer continues tour promoting statewide $1 billion reinvestment
For Immediate Release
Thursday, March 12, 2009
ST. JOSEPH, Mo. - As Missouri and the country face economic crisis, State Treasurer Clint Zweifel discussed advancing his strategic initiative to create and retain jobs and reinvest $1 billion in Missouri while at the St. Joseph Area Chamber of Commerce today. Treasurer Zweifel has visited every corner of the state as part of his commitment to job creation and community reinvestment.
"Unemployment is at a 25-year high and 650,000 Americans lost their jobs in February," Treasurer Zweifel said. "As state treasurer, it is my job to bring real ideas to the table to move Missouri's economy forward, and that is exactly what Invest in Missouri does."
Invest in Missouri legislation, HB 883, 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. Additionally, the legislation expands eligibility for the Missouri Linked Deposit Program. Between the two statutory changes, Treasurer Zweifel said his office would reinvest $1 billion in the state.
"Our existing law needs to be changed. It is preventing the state from obtaining competitive interest return on the taxpayers' money," said Rep. Tim Flook, R-Liberty, who filed HB 883. "Allowing for a competitive market place and expanding the Linked Deposit Program are the right decisions for Missourians in this tough economic environment."
Missouri statute currently ties state 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 any 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. "Removing this archaic restriction allows my office to immediately place an additional $250 million in Missouri community banks, earn a fair rate and return $10 to $15 million to taxpayers' investments."
The Invest in Missouri legislation also expands eligibility guidelines 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 also become available as part of the legislation.
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. The senate bill is not scheduled for hearing.
"Reinvesting $1 billion in Missouri is a nonpartisan issue," Rep. Flook said. "We are doing this with no new spending and no new programs, which is something Democrats and Republicans can agree on."
"It is critical we make a difference in the lives of those struggling right now," Treasurer Zweifel said. "The responsible decision requires us to act to reinvest $1 billion in the state, incentivize job creation and retention and get taxpayers a fair return on their money."