Muni Think

The proposed cap of 28% may be a zero-sum game at best because it could increase costs for nearly all taxpayers. While there are additional arguments against adjusting the municipal tax exemption, the culmination of these factors indicates that such a significant change could alter what has served as one of the most efficient forms of government and infrastructure financing for more than a century.

In the next few years, the Treasury plans to completely "wind down" Fannie Mae and Freddie Mac, and the impact on the pre-refunded and escrowed-to-maturity municipal securities will be devastating.

Instead of repealing the tax-exempt status, we need to rebuild the economy by reinvesting in our infrastructure that will ultimately create jobs. One of the best ways to do this is through low-cost borrowing at the local level.

While NAIPFA disagrees with these participants' statements that Municipal Advisors are wholly unregulated, NAIPFA does agree that the SEC's Municipal Advisor rulemaking should be completed as soon as possible to allow for further development of MSRB rules.

Water seems to be as steady a business as they come. After all, it's an essential service we all need. But the operating environment of water providers is changing, and bondholders should be sure that the issuers whose debt they hold are changing their business models accordingly.

Municipal bonds brought us clean water at the tap. This crucial development is in danger from proposals to eliminate the tax-exemption on municipal securities for essential governmental purposes.

Professional investors who mark to market need to know how their portfolios would perform under various interest-rate scenarios. Such "stress testing" is available in standard analytics systems, but when it comes to munis, the results could be seriously misleading, Andrew Kalotay says.

As the Securities and Exchange Commission's enforcement and litigation activity in 2012 demonstrates, the agency's focus on municipal market enforcement has increased dramatically, and this trend seems likely to continue under the SEC's new leadership.

The New York Times article, "A Stealth Tax Subsidy for Business Faces New Scrutiny," is riddled with inaccuracies of a critical development tool: private activity bonds. The story, sensational and misleading, highlights perceived misuses and abuses, while ignoring the essential public purpose that bonds serve.

The long-term care credit market has stabilized, writes Jon Barasch of Interactive Data Corp. in this commentary.