Could we be looking at a Chicago Cub World Series Championship in October and a fifth star on the flag? Why? The city of Chicago looks to have the beginnings of a fix for its pension problems. The Mayor is close to gaining approval from city council to increase water and sewer fees. The additional proceeds, coupled with an increase in property tax rates last October, could put the pension plan within 90% funded in 40 years. This represents a big step forward for the city, which is why S&P just changed the city’s outlook from negative to stable. Next up, the state needs to start feeling the Cub love!
Bank of America/Merrill Lynch, in lieu of the upcoming election, released a study on whether free education = more educated? Their results show it does not. The study looked at countries around the world, comparing the cost of higher education versus the percent of citizens with higher education degrees. They were no strong correlations found between providing cheap education and more people being educated.
State tax revenue growth continues to slow. Second quarter revenues were down by 2.5%, versus the same time period in 2015. This decrease is led by lower income tax revenues. This, coupled with a recent Pew Charitable Trust study that shows states (on average) have lower general fund reserves than last pre-recessionary levels, is a bit concerning for muni credits.
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