WASHINGTON -- More than 200 state and local officials from across the nation will gather in Austin, Tex., next month to grapple with problems caused by dwindling federal dollars and the resulting increased pressure to issue municipal bonds.

The meeting, hosted by Texas State Treasurer Kay Bailey Hutchison from Dec. 4 through Dec. 6, will represent the first formal annual meeting of the State Debt Management Network, which was formed last spring after a series of organizational meetings attended by debt management and oversight officials across the country.

At the top of the group's list of concerns is how to manage debt to prevent future overcapacity as the retrenching of federal spending forces states to issue more bonds.

"The network was formed recently as a reaction to increased borrowing activity by states nationwide," said Mary Landrieu, Louisiana's treasurer and chairman of the network, in a recent release. "Over the last 10 years, states have been forced into a posture of issuing more debt, more frequently, in order to pay for rapidly growing state programs that seek to fill gaps caused by dwindling federal support."

The group's agenda was reflected in a report designed for Texas policymakers and issued by Ms. Hutchison's office in February. It warned that general obligation debt in the state is increasing "at an alarming rate" and called for a debt management plan to help Texas "avoid future shock."

According to the report, the state's GO debt has increased by more than 200% in the last three decades.

The report called for a "sound debt management plan" to balance Texas' needs for infrastructure and other programs with what taxpayers can afford.

Representatives at the Austin meeting are expected to represent states with wide-ranging levels of oversight for municipal bond issuance.

Only 30% of states have a central approval process for state debt, and even fewer approve issuance of local debt, according to a National Association of State Treasurers' recent report on debt management.

Sessions will focus on determining state debt capacity, investor relations and disclosure, professional fees for financing teams, arbitrage rebate regulations and calculations, lease financings, state and local partnerships, dynamics of bond syndicates, and the need for refundings.

Various state treasurers and bond experts will speak, as well as representatives of institutional buyers, rating agencies, underwriters, and academia. For more information, contact Kathy Tyson at (606) 231-1879 or T. Bradley Keith at (504) 342-0006.

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