How the new fed municipal bond facility capped municipal-treasury yield spreads in the Covid-19 recession.

For over two centuries, the municipal (muni) bond market has been a source of systemic risk, which returned early in the Covid-19 downturn when borrowing from securities markets became costly for many private and public entities, and some found it difficult to borrow at all. Indeed, just before the Fed announced its unprecedented intervention into the muni market, spreads of muni over Treasury yields rose in line with the unemployment rate and appeared headed to levels not seen since the Great Depression, when real municipal gross investment plunged 35 percent below 1929 levels. To prevent such a calamity, the Fed created the Municipal Liquidity Facility (MLF) to purchase newly issued, (near) investment-grade state and local government bonds at ratings-based interest rate spreads over the safe OIS benchmark yield. In general, these spreads were initially about 100 basis points above average spreads under more normal market conditions and were later lowered by 50 basis points in August 2020. Despite a modest take-up, our study documents the MLF prevented muni spreads from rising much above those margins (plus a modest 10 basis point fee) and limited the extent to which interest rate spreads could have amplified the impact of the Covid pandemic. To establish the MLF the Fed needed Treasury indemnification against default losses. There were concerns about whether the creation of the MLF could induce moral hazard among borrowers and could undermine the efficiency of the bond market if the facility had lasted too long. Partly for this reason and because the muni market had settled down by yearend 2020, the Treasury terminated the MLF at that time. Future assessments of these downside aspects will help answer the question whether the program's benefits addressed here exceeded its costs.

Municipal Stormwater Management Spending in California: Data Extraction, Compilation, and Analysis.

Communities in the U.S. fund stormwater management programs to reduce flooding and improve and protect water quality. Few studies have attempted to quantify municipal storwmater management expenditures. This task is important given efforts to meet increasing water quality standards and develop new revenue sources. The purpose of this study was to evaluate trends in municipal stormwater management expenditures across the state of California. The study identified and compiled publicly-available data on reported stormwater expenditures (spending) and budgets for local governments in California. Data were extracted from annual reports for over 160 public agencies. A standardized rubric of activities was developed and used to create a first-of-its-kind database of municipal stormwater budgets and expenditures. The results indicated that there is over $700 million in annual municipal stormwater spending, but this total does not represent all spending due to gaps in publicly-available data. Counties and flood control districts often have the largest total expenditures in a region, but in aggregate cities reported more spending statewide. Available data are not sufficient to adequately evaluate whether current spending meets regulatory requirements. Additionally, publicly-available data are inconsistent across geographic regions regulated by different agencies. The analysis offers a template for improved cost reporting of stormwater programs in U.S. municipalities, which can help answer key questions such as the sufficiency of current funding. Future research can use the method to evaluate spending in other states and regions, evaluate trends over time to improve outcomes, and refine the spending categories based on examples from other states.

Assessing the full costs of floodplain buyouts.

Given projected increases in flood damages, managed retreat strategies are likely to become more widespread. Voluntary buyouts, where governments acquire flood-damaged properties and return the sites to open space, have been the primary form of federally funded retreat in the USA to date. However, little attention has been paid to the cost structure of buyout projects. Using a transaction cost framework, we analyze the costs of activities that comprise floodplain buyouts. Federal data do not distinguish transaction costs, but they do suggest that the cost of purchasing properties often accounts for 80% or less of total project costs. Through a systematic review (n = 1103 publications) and an analysis of government budgets (across n = 859 jurisdiction-years), we find limited sources with relevant cost information, none of which reports transaction costs. The absence of activity-level cost data inhibits more targeted policy reform to support community-driven and efficient buyout programs. Better data collection and reporting can inform more impactful and equitable buyout policy.

IPTU: avaliação de potencial e utilização sob a ótica da teoria dos conjuntos fuzzy / IPTU: evaluación de potencial y el uso bajo la óptica de la teoría de conjuntos fuzzy / Assessment of potential and use of the IPTU tax, based on the fuzzy set theory

Resumo A fim de identificar os determinantes do potencial de arrecadação do imposto sobre propriedade predial e territorial urbana (IPTU) no Brasil, bem como a utilização dessa capacidade, este artigo propõe uma análise comparativa dos municípios brasileiros aplicando a teoria dos conjuntos fuzzy. A aplicação dessa metodologia na área das finanças públicas é pioneira no Brasil, o que proporcionou resultados inéditos em matéria de tributação da propriedade. Os resultados confirmaram o que analistas e até mesmo dirigentes municipais já apontaram há tempos: a maioria dos municípios brasileiros não utiliza todo o seu potencial de arrecadação do IPTU - fato que tende a ser mais crítico nas cidades de menor porte e que dependem mais de recursos de outras esferas de governo. O artigo inova ao mensurar esse potencial a partir de uma análise comparativa entre cidades com semelhantes características.

Resumen Con el fin de identificar los determinantes del potencial de la colección de impuesto sobre bienes inmuebles y territorial urbano en Brasil, así como la exploración de tal capacidad, este artículo propone un análisis comparativo de los municipios brasileños mediante la aplicación de la teoría de conjuntos fuzzy. La aplicación de esta metodología en el área de las finanzas públicas es pionera en Brasil, e ha dado resultados sin precedentes sobre los impuestos de propiedad. Los resultados confirmaron lo que los analistas y líderes municipales incluso han señalado hace algún tiempo: la mayoría de los municipios brasileños no utiliza todo su potencial para recaudar IPTU - hecho que tiende a ser más crítico en ciudades más pequeñas y que dependen de fondos desde otras esferas del gobierno. Este artículo innova para medir este potencial basado en un análisis comparativo de las ciudades con características similares.

Abstract This article proposes a comparative analysis among Brazilian municipalities in order to identify the determinants of the potential and of the ability to collect urban property tax (IPTU) in Brazil. The analysis applied the fuzzy set theory, a pioneer methodological choice in the field of public finances in Brazil, which has provided unprecedented results in terms of property taxation. The results confirmed what analysts and municipal leaders have pointed out for a long time: the majority of Brazilian municipalities do not use their full potential to collect the IPTU — a fact that tends to be more critical in smaller cities, which depend on funding from other spheres of Government. The article breaks new ground in assessing this potential based on a comparative analysis of cities with similar characteristics.