MuniNet Guide Archive
Chapter 9 (Municipal Debt Adjustment) Is Unlike Chapter 11 (Corporate Reorganization)
By James Spiotto IN A CHAPTER 9 IN A CHAPTER 11 • Only the municipality can initiate a Chapter 9 if authorized by state law. • The corporation (voluntary) or its creditors (involuntary) can initiate a Chapter 11 case if the corporation is a moneyed entity (not a...
U.S. Demographic Shifts: Millennials Now Comprise One Quarter of Population
by Mardee Handler Move over, baby boomers, millennials are taking over the country - and not just when it comes to smart phones and social media. The U.S. Census Bureau recently released a report saying that, as of July 1, 2014, millennials number 83.1 million,...
Should Congress Pass HR 870 Allowing Puerto Rico to Authorize Its Municipalities Including Public Corporations to File Chapter 9?
by James Spiotto As had been noted in numerous articles in MuniNetGuide.com and other publications, Puerto Rico and its municipalities and public corporations are facing a significant financial challenge. Last year, as part of Puerto Rico’s response to the fiscal...
Assessing the Credit Quality of America’s Cities – Part Two: The Achilles Heel to the Fiscal Condition of Cities – Public Pensions
In the second part of our series on city credit quality, the spotlight shifts to the Achilles heel for many cities: public pensions. by Richard A. Ciccarone Governmental credit quality is a byproduct of both the underlying economy and the cumulative...
Assessing the Credit Quality of America’s Cities – Part One: Focus on Bond Ratings
How close to the fiscal distress edge are America's cities? This article, the first in a series, Assessing the Credit Quality of America's Cities, examines the financial health of cities against a backdrop of high ratings issued by the three major credit rating...
Educational Attainment Links to Economic Gain
By Mardee Handler As the U.S. population becomes more educated, it appears that education continues to pay dividends. Latest data from the U.S. Census Bureau shows an increasing level of educational attainment among the nation’s population age 25 and older. According...
Illinois Pension Reform Legislation Is Legally Justifiable and in the Best Interest of All
by James Spiotto On November 21, 2014, the Circuit Court for the Seventh Judicial Circuit in Sangamon County, Illinois presiding over the consolidated Illinois State Pension Reform Litigation ruled that the pension reform legislation passed by the State Legislature...
Casino and Political Gaming in Connecticut
by guest contributor Shelley Michelson As casino gaming goes in the State of Connecticut, so go the State’s finances. Since the formal opening of Foxwoods in 1992 and Mohegan Sun in 1996, pursuant to Memoranda of Understanding between the respective native American...
The Great Puerto Rico Debt Machine Gears Up, Again
The French have a saying: “The more things change, the more they stay the same.” That seems quite applicable to Puerto Rico’s current fiscal situation. We are now more than two years into a full-blown debt crisis (to us, the current crisis dates back to April 2012,...
Financially Distressed and Bankrupt Cities: Should Unfunded Pension Obligations Impair Funding of Essential Services?
by James Spiotto The financial health of some municipalities across the nation that are in financial distress is being threatened by unfunded public employee pension obligations that are not affordable and sustainable. When the cost of meeting public pension...
Lessons Learned from the Detroit Bankruptcy
by James Spiotto In July of 2013, Detroit was the first city that was the largest city in the state to seek protection under Chapter 9 of the Bankruptcy Code for municipal debt adjustment. Previously, Chapter 9 had been a remedy used rarely by any city, town, village...
California Takes a Proactive Leap in Local Government Transparency
When California State Controller John Chiang took office in 2007, increasing transparency and accountability were among his top priorities. One of his goals was to increase public access to local government financial data. Fast forward to 2014. Public access to local...
How Does Your State’s Economy Rank?
Most would agree that this is not your typical U.S. economic recovery. The myriad of data tracked continues to provide mixed signals. Gross Domestic Product (GDP), for example, has been on a roller coaster ride, with a sharp dip in 1Q and a nice uptick in 2Q. The...
What May Be in Store for Puerto Rico in Q4
You can go your own way, Go your own way, You can call it another lonely day, You can go your own way, Go your own way ... Fleetwood Mac Just a bit of nostalgia to start this week’s column ... Last night, we were lucky enough to catch Fleetwood Mac’s reunion tour,...
Baltimore Welcomes Immigrant Population
by Mardee Handler The foreign-born population plays an integral role in Baltimore, Maryland’s goal to grow its population by 10,000 families over the next decade. Like many other cities dependent on the manufacturing industry, Baltimore’s economy has been...
4 Ways to Become a More Informed Voter in Your State’s Gubernatorial Election
By Mardee Handler This November, voters in 36 states will cast their votes for a new (or re-elected) governor. Not unlike during other election seasons, TV screens across the nation are already ablaze with political ads that attack the opponent and distort the facts....
BBB-Rated Munis Losing Their Allure
This was truly a momentous week in the global capital markets, on several fronts. First, in its monthly proceedings, the FOMC basically stayed on its cautious tapering course but somehow managed to spook the market into pushing up the expected time frame for rate...
Metro Area GDP Trends Suggest Potential Population Shifts in the Making
By Richard Ciccarone The majority of U.S. metro areas experienced economic growth in 2013, according to recent data released by the U.S. Bureau of Economic Analysis. Gross domestic product (GDP) by metro area, defined as the “sub-state counterpart of the nation’s...
Gambling on Atlantic City’s Future
Last week, we predicted that, in the absence of fresh news from Puerto Rico, the market would shift its attention to the two weakest State GO credits, Illinois and New Jersey. With regard to the Garden State, that already seems to be happening. The rating agencies,...
Gambling on Atlantic City’s Future
The fiscal plight of a high profile local issuer such as Atlantic City has also served to draw attention to New Jersey’s deteriorating credit picture. This oceanside resort, as it were, lends itself quite readily to muni credit analysis 101: it is a classic tale of a one-industry town whose sole industry happens to be in a tailspin.
Whither the High Yield Muni Market?
Muni market participants returning from the Labor Day weekend were greeted by two important market developments: one that could have important implications for future market liquidity, the other the culmination of a ground-breaking credit event. First, even after...
PREPA Gets a Reprieve While Detroit Strong-Arms Its Utility Bondholders
“Reality: what a concept!” The famous quote from the late, great Robin Williams may well be applicable to today’s municipal market. The first reality we all have to face up to? This may be as good as the muni market will get for the rest of the year. The combination...
Critical Access Hospitals at a Crossroads
by Shelley Michelson As a class, the nation’s 1,322 critical access hospitals (“CAHs”) are themselves on the critical list, as are all rural hospitals. Since last year, 22 rural hospitals have closed, according to the National Rural Health Association. Of this total,...
Rhode Island Follows New Jersey with Controversial Tobacco Issue
Market Outlook The Ebola virus is back, and it brings with it other unpleasant memories of the 1990s. As you may recall, that decade was marked by two major bond market debacles, one in 1994, the other in 1998. Risk assets, particularly the high yield sector, did not...
Do Sports Teams and Venues Have a Significant Impact on Local Economies?
by Mardee Handler The economic benefit of major league sports teams, international mega-events and sport venues has become a particularly contentious public finance issue over the past few decades, according to Robert Baade, Ph.D., Professor of Economics and Business...