CHICAGO - Wisconsin's capital finance director, Kevin D. Taylor, resigned this week, two years after stepping into the position following the retirement of the state's longtime debt manager Frank Hoadley.
"It was time for me to move on," Taylor said in a phone interview Friday. He plans to return to the independent consulting business he operated before taking the Wisconsin job, offering fiscal and credit-related analysis to the buy-side and public clients.
Assistant capital finance director David Erdman, who has been with the state since 1994, will take over Taylor's duties, aided by finance programs administrator Aaron Heintz, who has been there since 2005. Two other positions are expected to be filled next month.
Taylor, 51, added that he was not asked to resign, loved his position, and enjoyed good working relationships with capital finance staff members and members of Gov. Scott Walker's administration.
Taylor's resignation Monday caught market participants who work on Wisconsin bond programs by surprise; state officials described it as "unexpected," according to sources.
The Department of Administration would say in a statement only that "Kevin Taylor is no longer a state employee. Beyond that we are not commenting on a personal related issue."
The state selected Taylor, a former banker and executive director of the Indianapolis Local Public Improvement Bond Bank, over other finalists in a national search after Hoadley announced his plan to retire after 25 years. Taylor started on April 22, 2013.
The office handles disclosure, manages all state debt issuance, and recommends debt policy and legislation to the State Building Commission and governor, and administers finances for the clean water revolving loan fund program.
Several public finance bankers described Taylor as a "consummate professional" who was "very smart on credit issues" and "accessible, innovative, and very open to any financing ideas."
The capital finance officer reports to the state budget director and both offices fall under the purview of the DOA. Walker earlier this year replaced Department of Administration Secretary Michael Huebsch with Scott Neitzel.
Taylor began working for the bond bank in 2008 and left in 2010 to manage City Securities Corp.'s public finance team. He previously worked at AIG Global Investment Group where he was a manager of the insurer's municipal bond portfolio.
He began his municipal career as an analyst at Standard & Poor's and also worked as a trading desk credit analyst for Prudential Securities.
Taylor said he plans to remain in Wisconsin. During his tenure with the state government, he expanded investor outreach and added Kroll Bond Rating Agency to the list of rating agencies that review the state's credits.
Taylor departs at a busy time for the office as Walker has proposed an expansion of transportation revenue borrowing to help pay for mounting transportation funding needs. Walker's budget also includes a revamp of the state's environmental improvement fund program.
Walker has also proposed state-backed borrowing to help pay for a new Milwaukee Bucks professional basketball arena, although a final financing plan is the subject of ongoing meetings between local and state officials.
Financial actions face heightened scrutiny as Walker is expected to make a bid for the Republican nomination for president in the 2016 race. The administration was put on the defensive earlier this year due to a plan to leave $108 million of low-interest commercial paper in place instead of paying off it off in the current fiscal year as planned. The move is providing near-term relief to help close a $283 million shortfall.
Moody's Investors Service recently revised Aa2-rated Wisconsin's outlook to positive from stable. "The state's ability to make progress toward structural budget balance and continued improvement in its fund balances will be important to future credit analysis," Moody's said. The state's GOs are rated at the AA level by Fitch Ratings, Moody's, Standard & Poor's and the Kroll Bond Rating Agency. The other three agencies assign stable outlooks.
