Rachael's Public Finance Blog

To Gauge Concerns About Brexit, Look at British Bonds This brief article discusses how bonds can help one discern whether or not there will be financial trouble as Brexit approaches. I don't understand the intricacies of bond pricing, but I still was able to gleam the broader points. Interestingly, while rates have dropped, the debt is still better rated than German and US alternatives. It's a good sign to see that investors are still interested, albeit perhaps less so. The author provides clear evidence to support that investors aren't panicked. Before learning about bonds this semester, I didn't think so holistically of them- as signals of investment, financial indicators, and more broad evidence of changing markets. I'm curious to see how the tides will turn as Brexit continues to loom more eminently, and how this will affect the individual communities.

A $2 Billion Question: Did New York and Virginia Overpay for Amazon? It's no secret that in order to secure new business, and as a result, jobs, states and municipalities both offer up various incentives. Recently, the most public example of this has been with cities competing to recruit Amazon's new campus. I found the most interesting element of this article to be the influence of the billion dollar incentives in Amazon's decision- or rather, the lack of it. As the article explains, money didn't talk, but resources did. The decision really came down to where labor was, and where transit is. And hindsight makes it easy to see that this was always what they wanted. While logical, it seems unfair to have put the midsize communities through the ringer, as they spent hundreds of thousands of dollars in courting, only to have never had a chance.

A Big Tax Break for Socially Responsible Investing Opportunity zones have recently been pushed as a development incentive, hoping to spur capital investment in underserved areas. They work in an interesting way- investors use their "embedded gains" by reinvesting the profits into opportunity zone funds. The longer they maintain the investment the larger the tax break that they will receive- from 10%, to tax free if it lasts for 10 years. However, there are risks involved. Some investors hesitate, wondering if they would get money out of the areas in which it was placed. Additionally, there are concerns about tracking the progress in an initiative with no background. Others hesitate based on questioning how it will benefit the community. Those who seek to be socially responsible, in particular, want added layers of diligence in order to be sure that the area is truly low income, or will see a community change for the better. The regulations for these areas are not yet ...

California Midterm Results: Funding for Affordable Housing and a Rent Control Defeat The nation just went through a tumultuous election day, the results of which are still in flux, nearly two days later. However, some things were definitively decided, including ballot measures across various states. In California, some important measures were voted upon regarding housing, including four different bond measures. Proposition 1 was for a $4 billion dollar affordable housing bond. The bill would provide subsidies for 30,000 families, 7,500 farmworker households, and assistance to homebuyers and loans for veterans. The bill would come to $170 million for the next 35 years. Proposition 2 was the Homeless Housing Bond of $2 billion dollars. It would support 20,000 new housing units for those in need, at $120 million a year. Interestingly, this bond would use revenue from a special income tax on millionaires, which already pays for mental health services. Both of the bond measures pa...

Where 'Yes! To Affordable Groceries' Really Means No to a Soda Tax In Oregon and Washington state, several initiatives are up for a vote. These initiatives set out to preemptively ban any taxes on the food and drinks in these states. And while this sounds appealing to voters, there is a shadowy undercurrent- the soda industry. A growing movement for soda taxes across the country- and even internationally- has made many companies nervous, and as a result, they've taken action, insidiously inserting themselves into democracy. Obscuring the issue, and their involvement, millions of dollars in funding have been thrown at these causes. The industry can't stomach the idea of progressive states catching on, and losing huge portions of their market. There's no excusing this lack of transparency, however. Especially in the face of the funding, where in Washington, those against the ballot initiative had raised a paltry $100,000 to the soda companies' $20 million. I...