MuniLand

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.

American City and County reports on a wonderful photo campaign launched by the Association of Equipment Manufacturers (AEM) to highlight America’s crumbling infrastructure.

I predict the category “One bumpy road” receives a lot of submissions. Here is how it is described by the AEM:

Disintegrating roads are a fact of life for almost everyone. Some have even rewarded us with a flat tire or worse! Send a photo of a decaying bridge or road; show Congress the consequences of their inaction.

Mayors take out the pitchforks

William Alden of Huffington Post writes about a “testy” encounter between mayors and federal officials. The federal dollars for municipalities from the American Recovery Act have basically ended and revenues for state and local governments remain weak. We should expect to see more of this.

The federal officials on stage were speaking in broad, theoretical terms. But the mayors wouldn’t stand for that. They knew what needed to get done, they said. What they wanted from Washington was the dollars to do it.

“We should not be expecting or depending on top-down permission from the White House or Washington to have us advocate for this stuff,” said R. T. Rybak, mayor of Minneapolis, who stood up and addressed the other mayors. Earlier, [Philadelphia] Mayor [William] Nutter had complained about the seeming hypocrisy of federal lawmakers who go to ribbon-cuttings and ground-breakings, even if they never supported the legislation for those projects. Rybak heartily commiserated.

Kentucky sells assets on eBay

The Lexington Herald Leader reports that Kentucky Governor Steve Beshear has put up two aged planes from the states fleet of 15 for sale on eBay.

We laud the governor for rationalizing states assets but think his press conference is a little over the top considering the size of the state’s estimated budget shortfall for 2012 is $780 million.

Lexington Herald Leader says the Smart Government Initiative of the Office of Procurement Services estimates that $7.2 million has been saved through contract renegotiations and rebidding.

We are a nation of states with differing political cultures and leaders.  Loud leaders and quiet leaders.

The loud ones get most of the attention. Do financial markets reward the loud ones too?  Not always it seems.

New Jersey Governor Chris Christie gets a lot of attention for his approach to governing. And has garnered a lot of political interest for his full-on attack on his state’s municipal unions. See the video above for an example.

There has been a lot of speculation about the intensity of municipal mutual fund outflows. Investors have headed for the exit for the last 21 weeks. Does this exodus give us an accurate read on the health of the municipal securities market?

Two charts. Two views.

One is the “dumb money” view and the other is the “smart money” view. [No disrespect to anyone reading this blog.]

On Wall Street retail investors and small pension funds are known as “dumb money”. This is because these investors have less knowledge of the practices of the securities markets and less access to sophisticated information. Mutual funds are usually considered products for “dumb money”.

It’s Friday and America keeps chugging along.

We have no Federal budget, we are possibly shutting down the federal government and our national credit card is nearly maxed out.

And over here in muniland the road is still bumpy. Here is the sweep.

Municipal bond mutual funds continue to experience outflows, general obligation bonds interest rates tick up a little from slack demand and several Senators dust off an old, unpopular idea for taxation of muni bonds.

Transportation for America:    The Fix We’re In For: The State of Our Bridges