Albany Makes Ready the Leisure Suits of Celebration: Muni WeekWilliam Selway
Muhammad Ali defeated Joe Frazier in a 14-round Philippines bout, “Saturday Night Live” debuted, two young Arkansas law professors named Bill and Hillary tied the knot and New York Governor Andrew Cuomo’s blue Corvette wasn’t long off the assembly line.
The month was October 1975; it was also the last time Cuomo’s state had as high a credit rating as it does today.
The Empire State tomorrow is selling $1.2 billion of bonds, among the largest offerings of long-term debt this week.
Moody’s Investors Service paved the way: It boosted New York’s credit rating to Aa1. The company cited a rosier outlook: a recovering economy, more money socked away and a pared-back pace of spending more in line with what New York can afford.
The shift wasn’t much of a surprise to investors. A New York general obligation bond maturing in nine years traded for an average yield of 2.19 on June 13 ahead of the change, even less than top-rated bonds at the time.
But hey: No reason for Albanyites not to dust off the polyester leisure suit and celebrate anyway.
Don’t call it a comeback. Not in court, anyway.
On Hudson River’s Rive Droite, New Jersey sees dark financial skies as Governor Chris Christie’s administration fights a legal challenge over pensions.
“Never before in New Jersey’s history has the state experienced such a staggering revenue shortfall so late in the fiscal year,” as state lawyers put it in court papers last week. Another way: “At the brink of disaster...”
Revenue projections left the state with a $2.7 billion shortfall through next June, which Christie made up for by slashing what will be paid into employee retirement plans. Lawyers are to appear in court on June 25 to defend that.
Christie, who once touted a “Jersey Comeback” theme of economic rebirth, is counting on courtroom success. “There are no alternatives,” he told WKXW-FM radio this month.
Municipal-bond yields were little changed last week with 10-year munis at 2.41 percent after Federal Open Market Committee said that it expects interest rates to stay low for a “considerable time.”
States and cities plan to sell about $6.8 billion of bonds this week, down from $7 billion last week, data compiled by Bloomberg show. Among those expected to borrow is Washington state, looking for about $1.2 billion to refinance higher-rate data and pay for construction.
Speaking of Washington, watch the video of Sir Mix-a-Lot with the Seattle Symphony Orchestra -- Google it -- then send a 300 word essay arguing whether this represents a revival for classical music or the death of western culture.
A local revival of Washington’s government shutdown drama closed last week in Richmond, Virginia. The original production wasn’t quite tragedy, the second not quite farce: Governor Terry McAuliffe said he would sign a budget passed by Republicans, after a few tweaks. Without a budget deal by July 1, government could have ground to a halt.
In Pennsylvania, lawmakers are still trying to agree on a budget before the fiscal year begins next week. Republican Governor Tom Corbett, who is up for re-election, has said he won’t consider raising taxes unless there’s also action to cut workers’ pension costs.