The Public Purse offers you serious thinking about economic, financial and political trends at the U.S. state and local level with a focus on municipal credit risk
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Ohio Fiscal Emergencies
0 Comments | Posted by Natalie Cohen in Budget and Finance, bankruptcy and default, cities, municipal bonds
I am adding a link to this article that updates Toledo’s fiscal situation. (See prior post.) The city is wrestling with a budget gap and trying to negotiate with unions over compensation. Ohio is a state that has a fiscal emergency program and municipalities may not file for bankruptcy without going through the state. The state’s [...]
2
State and Local Spending Increases 1982-2007
0 Comments | Posted by Natalie Cohen in Budget and Finance, municipal bonds, states
The tables below are for contextual reference as state and local governments face draconian spending cuts. The combination of public policy with the several bubble periods over the last twenty-five years has created a toxic brew. Some state and local governments are valiantly trying to tackle the issues while other legislatures and councils are more interested in [...]
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Flint, Michigan and the bankruptcy discussion
0 Comments | Posted by Natalie Cohen in bankruptcy and default, cities, municipal bonds
Here is an interesting clip from MLive about the debate over Flint’s dire finances. Michigan has a receivership program that has been used a number of times so municipalities cannot just file bankruptcy in federal court without going through the state. The article poses the sensible, if painful and difficult, questions of concessions on salaries and benefits [...]
19
troubles in toledo
1 Comment | Posted by Natalie Cohen in bankruptcy and default, cities, municipal bonds
Looks like the city is making its best effort to try to resolve budget imbalance. Ohio is one of the states that has a strong oversight/receivership program and municipalities may not file bankruptcy without approval of the state. Local governments there do rely on income taxes, which is tough in the current economy, especially in [...]
18
Municipal Bankruptcy
0 Comments | Posted by Natalie Cohen in bankruptcy and default, municipal bonds
Here’s a clip from the California League of Cities concerning AB 155. AB155 (and its parallel, SB88) briefly, would prevent California cities from filing bankruptcy without going through the state – California Debt Investment Advisory Commission (CDIAC). Numerous other states have adopted similar provisions, which puts the state in the middle of helping with a workout [...]
Here’s a good, local clip about the Harrisburg bond/incinerator problem:
16
Rethinking Municipal Guarantees, “look-throughs” and Ratings
0 Comments | Posted by Natalie Cohen in bankruptcy and default, municipal bonds
Harrisburg, Pennsylvania can’t really afford to pay for the Resource Recovery bonds that it guaranteed. Their recently adopted 2010 budget does not include debt service for this guarantee (see prior post with link). It is accepted practice for rating agencies to rate municipally (or state) guaranteed debt off the credit of the guarantor. Unlike bond [...]
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Transportation Shortfalls
0 Comments | Posted by Natalie Cohen in municipal bonds, transportation
This link from a recent release by the Brookings Institution, Robert Puentes comments on the New Jersey and Virgina transportation funds. New Jersey’ transportation trust fund will be spending all of its revenues on debt service by 2011; Virginia’s new governor too, suffers lack of funds for infrastructure improvements. Concerning gas tax as a mechanism [...]
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Harrisburg PA budget does not include debt service
0 Comments | Posted by Natalie Cohen in municipal bonds
See attached item from Reuters: http://www.reuters.com/article/idUSTRE61D27C20100214
Click on article title to get the link (sorry for the clunkiness) Hat tip to Mayraj Fahim.
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State of the States — liquidity is becoming an issue
2 Comments | Posted by Natalie Cohen in Budget and Finance, bankruptcy and default, municipal bonds, pensions, states
Several states are showing scary illiquidity. New Jersey’s governor just yesterday impounded funds the legislature had already appropriated and announced a state of emergency. He stopped short of “declaring” emergency, which would have given him special powers over contracts. New Jersey comes up high on the list of states with big budget gaps, heavy pension [...]