John E. Petersen was GOVERNING's Public Finance columnist for over two decades, with more than 40 years of experience in domestic and international finance conducting research, financial advisory work and teaching. He was a professor at the School of Public Policy at George Mason University. He passed away April 4, 2012.

John E. Petersen
April 30, 2012

Stockton, California’s Debt Problems May Set Precedent

How Stockton's story unfolds could have major consequences for public employee pensions and bondholders nationwide.
February 29, 2012

State Tax Codes in Need of Repair

State tax codes are filled with a legion of special treatments that could very well lead to a state’s fiscal destruction.
December 26, 2011

2011: The Bad Year That Wasn’t

In this Public Finance column, John E. Petersen says that despite dire forecasts, states and localities paid their debts on time and in full.
October 31, 2011

State, Local Finances in a Global Economy

State and local fiscal fortunes are now linked to the ups and downs of markets on every continent.
August 31, 2011

States and Localities Can’t Afford Big Government Projects

The fiscal situation will likely make huge capital projects like the space shuttle program and Boston’s Big Dig a thing of the past.
June 30, 2011

Who's the First to Go?

Public employees are at the front of the firing line, paying the price for widespread voter angst.
April 29, 2011

The Debt Demon

Have states and localities borrowed too much?
February 28, 2011

Is Federal Help Truly a Myth?

History says cities and states can look to the feds for a fiscal rescue plan.
January 1, 2011

The Effect of Federal Budget Cuts on States and Localities

When the federal government starts reducing its deficit, watch out below!
November 1, 2010

The Effects of the Housing Market on Government Finance

Plunging real estate values have devastating consequences for government finance.

Could Credit Default Swaps Undermine the Fiscal Stability of Municipal Bonds?

Could credit default swaps undermine the fiscal stability of state and local bond issuers?

The Similarities Between Sacramento and Athens

Some see California's future in Greece's current woes.
June 1, 2010

Build America Bonds Make a Mark

The new Build America Bonds are having an outsized impact on the way states and localities raise money to build and fix infrastructure.
May 1, 2010

Sinking Ships of State

Deep cuts in state and local spending may exert an undertow on the nation's recovery.

Fairy Tale Pension Projections

Assumptions about return rates and risky investments foreshadow big problems.

Defining State Debt

State borrowing takes on so many forms that it's hard to figure out what the total is.

A Boost for the Muni Bond Market

Build America Bonds are like the cash-for-clunkers program: They bring buyers in.

California: Paying the Price for Indulging Citizens

The Golden State's voters opted for more schools, roads and research, but then refused to pay for them.

Breaking Bonds

A subsection of the federal recovery act may kill off the muni bond as we know it.

Buffett's Bad Bet

The financial genius overestimates the risk of default on insured muni bonds.

Spend Now, Save Later

After the fun and games of a stimulus bump, stringency lies ahead.

Revenue Revisions

States and localities should use the current fiscal trauma to adjust and amend the ways they raise money.

All Systems in Distress

Even if the Wall Street bailout works, state and local governments will have fiscal problems for a long time.

The Big Bill

In Massachusetts, there is an ongoing disconnect between enjoying the good things in life and paying for them.

Bond Bliss

The U.S. Supreme Court expresses its fondness for muni bonds and accepts the way things are.
May 31, 2008

Mayhem and the Markets

It is an understatement to say that the financial markets are in an "unsettled" state. They are in paroxysms of uncertainty. For those in charge...

Rating the Ratings

For many issuers, going to market without insurance is unappetizing. But that may be changing.

A Time of Testing

The municipal bond market is dealing with uncertain times -- not of its own making.

The Hidden Tax

When the collection of revenue is too convenient, it can lead to consequences that may or may not be intended.

Diving into the Hedges

Public pension funds are being drawn like bears after honey to these risky, unregulated but high-reward investments.

Tax and Abuse


Kentucky Fried Bonds

A Supreme Court case on state exemptions of interest income from muni bonds could fire up big changes in the bond market.
July 1, 2007

Property Tax Favorism

America is a nation of majority rule, and one outcome of that is that the majority typically looks out for its economic interests. Take the uneven treatment of property taxes.

Lassoing GASB 45

Texas is leading a charge to get rid of the accounting rule that forces states and localities to tally the future costs of health benefits for retirees.

Fueling a Tax

A drive toward increased efficiency in energy and reduced oil consumption means state revenue systems will undergo wrenching changes.

The Check Is in the Mail

If the economy turns down this year, will the feds rescue the states the way they did in 2003?

The Check is in the Mail

If the economy turns down this year, will the feds rescue the states the way they did in 2003?

Housing Tax Bubble

Rising property values fomented tax reform in South Carolina, but restrictions in the new law may haunt the state.

Seat-Belt Budgeting

There's economic turbulence ahead that state budget and fiscal systems may not weather well.
June 1, 2006

Guide to Municipal Finance

Credit Raters Make Their Mark

Trifecta Financing

Northern Virginia may be on the road to an elaborate but ultimately workable solution to financing a subway to its international airport.

The Big Thaw

Voters may be coming around to the idea that government needs their money to keep public works up to speed.

Hedging Bets

With slow growth from traditional investments, pension fund managers are tempted by the snappy returns of alternatives.

Costing Out Security

The economic burdens of "hardening" transit systems are huge--and raise politically divisive questions.

Bubble Trouble

A puncturing of today's inflated real estate values would have negative and broadscale effects on local governments.

The Oldest State

Gone are the comforts of an era when an ever-expanding economy coupled with growing populations could pay the future freight.

Breaking a Bond

Advanced refundings are on the line as the federal government sees revenue in cutting off some muni bond tax breaks.

No Help From Higher-Ups

The states can expect to bear the fiscal burden of major changes in federal taxes and domestic spending.
November 1, 2004

Borrowers Beware

The SEC is going after muni bond issuers who fail to supply adequate information when their debt goes on sale.
September 1, 2004

Buy Now, Pay Later

The problem in putting a price tag on government is that costs are deferred--buried in borrowed money and out of voters' sight.
July 1, 2004

Retirement Rage

The high costs and rising profiles of public employee pension benefits are raising the public's hackles.
June 1, 2004

Find Me the Money

In an era of uncertainty, states and localities are looking to some unusual options.
May 1, 2004

Debtor's Dilemma

The core problem for states is not structural deficits. It's the polarizing disagreement over what to do about them.
March 1, 2004

Tax Avoidance Inc.

Corporations today believe they owe it to their stockholders to minimize business taxes any way they can.
January 1, 2004

A Leaky Roof

There's an $80 billion gap in what we spend and what we need to spend to maintain our infrastructure as is.
November 1, 2003

Going For Broke

Using the initiative process, Californians have fiscally handcuffed their governor, legislature and local governments.
September 1, 2003

Productivity Pinch

Because of the nature of the services they provide, states and localities find it difficult to increase productivity.
July 1, 2003

Living With Less

No amount of casino gambling, Sunday liquor sales or sky-high taxes on tobacco and booze will close state budget gaps.
May 1, 2003

The Budgetary Abyss

States are pushing a bow wave of operating deficits ahead of them in hopes that fiscal conditions may brighten.
March 1, 2003

Death And Taxes

The demise of the federal estate tax will take with it billions in state revenue--unless states distance themselves from the feds.
January 1, 2003

Rating The Body Politic

A key factor in muni bond ratings these days is the quality of governance or 'political risk' of an issuer.
December 1, 2002

Rethinking the Rules

Tax and spending changes in recent years call into question the wisdom of prohibiting states from running deficits.
October 1, 2002

Of Scandals and Scoundrels

By stupidity or guile, public finance officials--like their corporate peers--can go astray. Fast-buck opportunities are there.
August 1, 2002

States and the Markets

While the federal government remains stymied over corporate misdeeds, state officials have come out with guns blazing.
June 1, 2002

Here's to Your Health

Either we take steps to halt the escalation of health care costs or we make plans for the higher bills to be paid.
June 1, 2002

Guide to Money Management: Searching for Security

Earnings are down, benefits are up. For state and local retirement systems, it's been a year of living very dangerously.
April 1, 2002

Can Enron Happen Here?

Several state and local investment funds took a beating in the Enron debacle. It could have been much worse.
February 1, 2002

Budgets Flying Blind

With economic uncertainties undermining forecasts of future revenue, local budget makers are reluctant to be optimistic.
December 1, 2001

Downturn With a Difference

The present recession, compounded by the war on terrorism, could fundamentally transform the economy.
October 1, 2001

Shelter from the Fiscal Storm

This may be a time for states and localities to keep spending up and, if need be, to borrow money to finance new projects.
August 1, 2001

The Ayes of Texas

Referendums held in special districts permit multimillion-dollar bonds to be issued based on the casting of a single vote.
June 1, 2001

The Management Factor

How well governments plan for, execute and report their financial affairs is becoming a decisive factor in credit ratings.
April 1, 2001

Bet on the Tortoise

With the economy weakening, will the bottom drop out of the real estate market--and property-tax collections--again?
February 1, 2001

Beware the Bouncing Tax Bill

State and local revenues are more exposed to an economic downturn because they're more attuned to nonstop economic growth.
December 1, 2000

All Hail the Dowager Queen

What she lacks in youthful upside potential, she makes up for in mature dependability: The muni bond's heyday is coming.
October 1, 2000

Protecting the Nest Egg

Public pensions are now well funded. But with the buildup in equities, they have taken on more investment risk.
August 1, 2000

Tifs in the Hinterlands

Leveraging future revenues to build urban-like infrastructure is getting special attention in small towns that are growing like Topsy.
June 1, 2000

Balancing Portfolios in a Dot-Com World

It's pretty straightforward. Those charged with investing public money have only four things to worry about: their fund's financial condition and cash flow; the state of the economy; what monetary and other regulators are up to; and how the markets are behaving, which is to say what other investors collectively are thinking about these same things and what they think will happen.
April 1, 2000

The Muni E-Bond Revolution

With computers able to process tons of information quickly, the complicated muni market is a natural for electronic trading.
February 1, 2000

The Not-So-Great GASB

Why should governments calculate value for something that can't be sold anyway? Who's going to buy a city street?