Muni Think

"One of these things does not belong" is a catchy slogan — and it comes to mind when looking at the latest tax policy ideas coming from Washington when looking at the municipal bond tax exemption. The exemption is not a result of the growth of a tax code designed to induce or reduce certain behaviors. Rather, it is the foundation for the flow of capital in a $3.7 trillion dollar market required to efficiently finance the nation's infrastructure.

Land isn't the only thing drying up in California, as the drought's economic impacts are dangerously closing in on the state's financial resources.

Why is Proposed Rule G-47 pending approval by the Securities and Exchange Commission, and how will it differ from the existing rule? Why is this well-intentioned and, as some believe, needed rule the subject of an SEC order that has delayed its implementation?

The Securities and Exchange Commission used a combination of its antifraud authority and SEC Rule 15c2-12 in 2013 to raise the bar for issuers' secondary municipal market disclosures.

The first critical step in a municipal workout, whether inside or outside of bankruptcy, is to get all parties, the debtor and the creditors, to accept that they will all have to incur significant losses as a result of the workout process.

There is no easy, single answer to explain why Detroit or San Bernardino or Jefferson County and other local governments have resorted to bankruptcy in recent years.

Discount bonds performed worse because of the dreaded de minimis rule, under which buyers pay taxes on the gain at maturity at the ordinary income rate when the discount is large. But there is a silver lining — taking a tax-loss can ease the pain.

The Government Finance Officers Association supports regulating those professionals who provide "advice" to state and local governments and believes that the Dodd Frank Act and the Municipal Advisor rule will help to ensure that those who provide advice have a fiduciary duty to their government clients.

It is going to be very difficult for the 2 million Puerto Ricans who do not live in poverty to pay $68 billion of principal, plus tens of billions of interest, plus uncertain amounts of swap termination fees, plus billions of unfunded pension obligations. How was it possible for all this debt to have been accumulated?

During October, Puerto Rico bond prices recouped a portion of their late-summer plunge that pushed yields above 10% for certain bonds. The rebound followed efforts by Commonwealth officials to address the island's wide-ranging fiscal challenges, plus speculation that the federal government might step in to assist Puerto Rico.