Still buying municipial bonds?

US Cities Face Half a Trillion Dollars of Pension Deficits

As I mentioned back in March…

municipal debt mostly in the form of unfunded pensions is going to become a monster issue over the next 18 months or so.  You are going to see cities going bankrupt or getting bailouts.  As bad as it is for the cities.. it’s nothing compared to the 3 trillion in similar unfunded debt held by the states… or the roughly 100 trillion in unfunded federal liabilities.

Another issue impacting cities is going to be property revaluations.  CharMeck has been holding it’s breath and pushing off property tax rate increases but by law they are required to revalue property every few years.. and we are getting overdue.  Usually that means more revenue.. but in this environment property values.. including commercial values.. have been falling since valuations were last done. That’s going to mean lower revenue and probably higher tax rates trying to keep the revenue up. Those higher rates will also become a drag on our local/regional recovery.