February 7, 2013 9:29:02 AM
Jeff Clark - [email protected]
A bill that would have allowed county board of supervisors to invest excess funds in delinquent county tax sales has died in committee.
House Bill 439 was written by Rep. Gary Chism, R-Columbus, on behalf of District 1 Supervisor and board president Harry Sanders, who has been a advocate for more flexibility in investing the county's revenue from the sale of the county hospital. Sanders said he has watched the interest rates on the county's $30 million hospital sale money drop from more than five percent to less than one percent, losing the county about $1.5 million in the process.
With delinquent tax sales yielding up to an 18-percent annual interest rate, Sanders said the investment was a safe way to invest interest from the $30 million principal.
"We kind of felt like this bill wouldn't pass," Sanders said Wednesday. "It had some opposition from the Secretary of State and some other legislators. They were afraid we were going to get in the land business and we were going to start purchasing tax liens in other counties, but that's not what we intended to do." Pamela Weaver, spokesperson for Secretary of State Delbert Hoseman said "the Secretary of State's Office took no position on this bill."
Although the bill died, Sanders said he is enthusiastic another bill will give the county more flexibility with the hospital sale money.
House Bills 997 and 998, written by Rep. Jeff Smith, R-Columbus, call for the creation of the Lowndes County Reserve and Trust Fund, with the board of supervisors serving as its trustees. Sen. Terry Brown, R-Columbus, has introduced similar legislation in the Senate.
The bills would allow the county to place the funds in various interest-bearing investments.
"These are the bills we really want and desperately need," Sanders said. "Lafayette County passed a similar bill a couple of years ago and Coahoma County also has a bill going through the legislature. We feel confident Jeff and Terry will get these bills passed."
Chism has also introduced House Bill 379 which calls for the revision of how excess county funds can be invested.
Under current state law, excess county funds can only be invested in limited things such as CDs and U.S. Treasury notes, both of which Sanders said have diminished interest returns. The formation of the Lowndes County Reserve and Trust Fund calls for putting the $30 million in a trust to be overseen by the board of supervisors. The principal may not be spent except in board-determined emergency situations in which five percent of the money could be spent but would have to be repaid.
"We could invest in municipal and state bonds and even invest in a trust that would guarantee college tuition for future students," Sanders said. "It would allow us to make the same investments the state can make."