Part-time employment up in muniland
Incredible shrinking workforces
I’ve read in a few places that state and local governments were reducing the number of full-time employees and hiring more part-time workers. There is a story in the Dayton Daily News that nicely details the trend:
The data show that both the state and local Ohio governments attempted to get the work done by hiring more part-time employees. While local governments shed a little more than 11,000 full-time employees, they added almost 6,000 part-timers, a 4.6 percent increase. The state, meanwhile chopped close to 1,400 full-time workers and added 386 part-timers, a half-percent increase, according to Census data.
Ohio’s government job-shedding put it in the top third of the 50 states, although margins of error from the Census survey data make exact rankings impossible.
“This has been going on for years,” said Stanley Earley, Dayton deputy city manager.
In Dayton, the number of general fund employees, which includes police officers and firefighters, has shrunk from 1,898 people in 2001 to 1,313 people in March 2010, Earley said.
From March 2009 to March 2010 — the period covered by the recent Census survey — general fund employees shrunk from 1,436 to 1,313, he said.
“And we’re continuing to go down,” Earley said.
Rush to issue municipal bonds as rates go lower
Bond markets are really about the ebb and flow between the level of interest rates and the supply and demand of buyers and sellers. As rates go lower issuers want to float bonds and lock in low rates. On the other hand buyers want to buy bonds that have high interest rates. So it’s a dance between buyers and sellers set on a bigger economic stage.
The current low interest rates on municipal bonds are drawing many issuers into the marketplace. It should be meet with good demand as buyers seek assets that promise capital preservation in unruly markets, even at lower rates. It’s likely we will see low rates persist while global volatility continues. From Bloomberg:
The decline in defaults, along with plunging yields, has enabled municipal issuers from California to Massachusetts to borrow this month at costs of a third to half of what they paid in the past two years. States and cities are selling about $23 billion from Sept. 12 through Sept. 30, the biggest three-week total since December, according to Bloomberg data.
Nuns in year’s biggest default
There is something about nuns in a charitible project building luxury retirement condos that doesn’t sit right with me. Oh, and it’s the year’s largest municipal bond default, too. From Senior Housing News (emphasis mine):
The Claire, a luxury senior living facility targeting baby boomers has defaulted on municipal bonds used to finance the 53 story high rise that opened in December 2008 in Chicago’s Gold Coast Neighborhood.
The project was being financed by the Franciscan Sisters of Chicago, a charitable arm that initially looked to be a huge success. With entrance fees that start at about $540,000 for a one bedroom, the project was roughly 85% under contract before the opening. As the real estate market continued to decline, many buyers were forced to cancel because they were unable to sell their home.
@MillerTabak Michael Pietronico expect/respect – with global financial markets volatile we expect a new found respect for the state general obligation from many investors
+ Good Links +
Bond Buyer: Safe Haven or Missed Chance?
National League of Cities: NLC calls for continued tax exempt financing of municipal bonds
Washington Post: Obama to issue No Child Left Behind waivers to states
Government Tech: Where’s Rahm Emanuel? Online Map Tracks Chicago Mayor’s Travels