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 [...]

fiscal stress, municipal bonds, Nevada, state and local politics, states

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 [...]

fiscal stress, gas tax, municipal bonds, transportation

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municipal bonds

At this point in the meltdown timeline, municipal bond defaults have not yet occurred in the traditional sectors we think about such as cities, towns, states, utility systems and school districts.  The few notable exceptions include Vallejo, California, currently working through a Chapter 9 bankruptcy and Jefferson County, Alabama sewer system, which is a heavily [...]

Chapter 9, municipal bankruptcy, municipal bonds

Municipal bond defaults over the last two years occur in sectors that tie into the financial crisis: real estate.  Multi-family housing and land development projects that never took off are at the front line.  Special entities – usually a district of some kind, depending on the state – sell tax-exempt bonds to finance infrastructure for [...]

community development district, Florida, municipal bond default, municipal bonds, special district

School districts are often considered the safest investments in the tax exempt markets. They receive from 20-90% of their funding from their state governments, most of the rest from property taxes.  So what to worry? Well, state governments, whose revenues react most quickly to economic changes, are having trouble. (Excellent coverage of state troubles at [...]

California, municipal bonds, school district

Prichard, Alabama, town of about 25,000, outside of Mobile, filed Chapter 9 bankruptcy in 1999 and finally exited in 2002. They look poised for a second round. Their issues seem similar to Vallejo, California – they cannot afford to continue paying their retiree pensions and could run out of money in the next month. We [...]

Chapter 9, municipal bankruptcy, municipal bonds, Prichard Alabama