Making Muni Magic Disappear
Twenty years ago, the municipal bond market was -- believe it or not -- a wild and crazy kind of place. At least, that was ...
Twenty years ago, the municipal bond market was -- believe it or not -- a wild and crazy kind of place. At least, that was the U.S. Congress's take on it, with the result that the Tax Reform Act of 1986 clipped the wings of state and local agencies that issued municipal bonds.
The effects of that act on municipal financing was my first big story for Governing. Issuers could no longer come to the market with bonds for the sole purpose of placing the proceeds in high-return investments. They could no longer issue debt for uses that sorely tested the limits of the tax-exemption privilege. Over the years, I've watched and reported on various federal investigations, SEC fines and additional legislation that have further tamped down that "creativity."
It struck me the other day just how tame -- possibly marginalized -- the muni market has become when SIFMA was born.
SIFMA is the new powerhouse lobbying group that represents a merger of associations representing the sellers of stocks and bonds. The bond half of SIFMA was the Bond Association, an association representing underwriters of corporate, municipal and various other forms of government debt. I received regular email updates from the Bond Association on issues of importance. I had to search for news about muni bonds -- in the emails on their Web site. Which struck me as passing strange since the Bond Association had once been the Public Securities Association. In 1997, the name was changed to reflect a wider-ranging membership -- heavier on corporate than the state and local government debt.
So the Public Securities Association, which had represented underwriters whose meat and potatoes was the muni market, was subsumed into a greater association. And now, that's what's happened to the Bond Association. It's part of SIFMA -- the Securities Industry and Financial Markets Association -- and news of and information about the muni market is even harder to find. And that's so, even though the co-CEOs of the new association are PSA alumni: Marc Lackritz, who had headed up PSA until he moved on to the Securities Industry Association, and Micah Green who then took over the helm of the now all-but-forgotten PSA.
Join the Discussion
After you comment, click Post. You can enter an anonymous Display Name or connect to a social profile.
The Week in Public Finance: Taxes, Drought and a Nod to the Baha Men17 hours ago
How Data Can Improve Transit Efficiency18 hours ago
Fresno Deputy Police Chief Arrested on Drug Charges19 hours ago
States Trying to Figure Out Whether Entertainment Tax Credits Really Work19 hours ago
Chris Christie Rails Against Estate Taxes New Jersey Needs19 hours ago
Public Defender: San Francisco Jail Guards Forced Inmates to Fight Each Other23 hours ago