Muni sweeps: Education reform for Illinois

May 13, 2011

Happy Friday all!

Illinois passes landmark education reform

The Chicago Sun-Times reports that the Illinois state legislature has passed a substantial education reform bill. The legislation severely restrains the power of the teachers’ unions:

The measure continues to allow unions to strike in Chicago and the suburbs, but it imposes a requirement that school boards and unions take longer to negotiate and publicly disclose their bargaining positions before a strike can be launched.

In Chicago, no strikes could occur until as long as 120 days after the dispute goes to a special panel — and then, only if the Chicago Teachers Union has given a 10-day notice of a strike and has 75 percent of its bargaining unit members in agreement. Currently, a strike only requires a simple majority of everyone who votes.

The legislation would let the Chicago Board of Education lengthen the school day or school year unilaterally.

It also would empower Downstate and suburban school districts to use performance, not strictly seniority, in determining teacher layoffs and impose first-ever performance benchmarks for teachers to gain tenure.

Under the legislation, tenure would be granted only if a teacher had attained two “proficient” or “excellent” ratings during the last three years of the four-year period required for tenure.

The timeline for dismissing a tenured teacher would be shortened in both Chicago and elsewhere.

MSRB releases Q1 trade data

The Municipal Securities Rulemaking Board (MSRB)  released for the first time market statistics, including Q1 trading data and other figures, for the $2.9 trillion municipal bond market. From the MSRB statement:

  • The par amount traded in the municipal securities market in the first quarter of 2011 totaled $842,088 million, down nearly 8 percent from the $915,207 million traded in the same period last year.
  • Total number of trades of municipal securities during the first quarter of 2011 increased to 2.95 million, compared to 2.55 million trades in the first quarter of 2010.

Muni bond fund outflows trickle off

The Financial Times reports:

Weekly outflows from US municipal bond funds have fallen below $100m, the lowest level since investors began cashing out last November, according to Lipper, the fund tracker.

Cash redemptions from mutual and exchange-traded funds that are focused on the debt of US states, cities and other local bodies have fallen alongside recent gains in the prices of these bonds.

“It looks like people are no longer mass sellers,” said Tom Roseen, a senior analyst at Lipper.

Stock and private equity gains boost Calpers

The substantial rise in global equity markets has repaired large shortfalls at the largest pension fund in the U.S., Bloomberg reports:

The California Public Employees’ Retirement System, the largest U.S. pension, said it earned 18.6 percent for the first three quarters of its fiscal year, led by its stock holdings and private equity.

The $236.6 billion fund said its global equity portfolio returned 29.8 percent through March 31. Private equity earned 17.6 percent, though reporting of the results may be as much as four months behind.

Mini sweeps:

IPREO: Muni Deal Calendar (w/o May 16, 2011)

Bloomberg: California Republicans Propose Closing Gap by Erasing Programs

Bond Buyer: California Market On Hold

Bloomberg: Mitsubishi UFJ Enters U.S. Muni-Bond Market With Focus on West

FT Alphaville: Adventures at the long end of the muni yield curve

Governing: What’s the Matter with the Muni Market?

Morgan Stanley: Characteristics of Municipal Bond Investing

Huffington Post: Finance Professionals Eye Detroit And Other Strapped Michigan Cities For Emergency Manager Takeover

Bond Buyer: Money Funds Reverse Course, Take in $3.33 Billion

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