Municipal bonds are still how America gets stuff done
By: TOM DANNENBERG
Photo by Getty Images/iStockphoto
The White House recently announced that President Trump’s Advisory Council on Infrastructure would be disbanded. This Advisory Council would have presented a unique opportunity to tell the story of how the municipal bond market has supported $2 trillion of community-enhancing and job-producing U.S. infrastructure growth over the past decade. But in reality, the municipal market story is not a story best told from Pennsylvania Avenue. It is a story that is told, and lived, on Main Streets across this country every day.
The most effective champions of the municipal market will continue to be the mayors, school boards and private citizens who experience first-hand the benefits of municipal-bond-financed projects. As Washington, D.C. attempts to bring the focus on infrastructure growth onto the national stage, it is imperative that we recognize the ideal mechanism for financing that growth already exists in the form of the municipal bond market.
Across the country, evidence of the municipal bond market in action is everywhere. At a time when many people are frustrated by our economy, and aspects of our government appear to be functioning poorly, the municipal market is actually working – and working well. While the projects that municipal bonds support occasionally seem mundane, they are essential to building the economies of our cities and towns and promoting the safety, productivity and quality of life of our citizens.
One can see the benefits our counties, cities and towns derive from the municipal bond market right here in our great state of Illinois. For example, voters in Geneva recently approved a $21.8 million bond for the construction of a new library, which will replace the original 1908 building with a facility that better meets the needs of the community. In McHenry County, the Community College District issued $9 million in bonds, in part to build a new science center that will support those of its 6400 students studying science curriculum, including health care degree programs. The Skokie Park District issued $2.5 million in bonds to finance the improvement of facilities that it maintains across 49 different park sites that serve some 64,000 residents. And Bourbonnais recently approved a transportation project that will use municipal bonds to enhance the existing roadways surrounding the I-57 interchange. As part of a larger economic revitalization project, this financing will help to support the estimated creation of 10,000 jobs and $700 million in investment over 20 years.
All of these projects demonstrate how municipal bonds provide our communities with tools to maintain public safety, support high-quality education, attract employment, promote economic growth and enhance quality of life. The Advisory Council would have been a great opportunity to showcase these types of local projects on a national stage. Nonetheless, municipal bonds will continue to play their essential role in financing our growth and driving our economy. Local officials and the citizens they represent will continue to be best positioned to address the needs of their own communities. Anyone who doubts that fact can drive down Main Street and see the evidence of a market that works.
Tom Dannenberg is president and CEO of Hutchinson Shockey Erley & Co. in Chicago and chairman of the Bond Dealers of America.
http://www.chicagobusiness.com/article/20170908/OPINION/170909894/why-municipal-bond-markets-matter
