The Grand Jury of San Diego issued a report of this title yesterday.  Also, at yesterday’s GFOA (Government Finance Officers Association) business meeting, the group voted  that the Government Accounting Standards Board should stay away from the topic of sustainability.  The only conclusion one can draw from the Grand Jury report is: the city of [...]

California, Chapter 9, fiscal emergency, municipal bankruptcy, municipal bond default, state and local politics

See highlighted article about the struggle among a group promoting an initiative to curb costs: covering pensions for new employees’, raising the new employee retirement age and capping the pension formula. The initiative also would prevent the city council from passing retroactive increases (which is what Detroit did in the middle of its fiscal mess).  Looks [...]

ballot initiatives, direct democracy

We have two opposing camps in the muni-market at the moment: those who say it is the next systemic shoe to drop and the rating agencies that are systemically raising ratings.
Which is right?
We have moved from a market that has had heavy intermediation from the bond insurance companies to one where investors are on their [...]

ballot initiatives, bond insurance, community development district, direct democracy, liquidity, municipal bankruptcy, municipal bond default, ratings, state and local politics, 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 [...]

fiscal stress, state and local politics, states

Further to our discussion of Detroit’s pension, we see that Missouri’s public pension is in a lawsuit with State Street Bank over their securities lending program.  These programs are intended to act like demand deposits — but the dollars are huge, so any movement of large blocks of funds are likely to affect liquidity.  What with [...]

fiscal stress, liquidity, securities lending

The city of Detroit does not need another financial setback.  With unemployment topping 17% and ever increasing short term borrowing, the city is under an immediate survival imperative to cut spending or face insolvency.  State revenue sharing is being cut in the recent budget.  Local taxes, including the casino wagering tax are falling. 
The good news [...]

Detroit, fiscal stress, liquidity, securities lending