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Cities, states back off bonds amid budget concerns
Posted: Sep 4, 2011 3:39 PM by Matt Stafford
JEFFERSON CITY, Mo. (AP) - The budget crunch affecting many cities and states has contributed to a steep drop in the number of municipal bonds issued this year - and that means some residents may have to wait longer for repairs to aging streets, water pipes or schools.
Through mid-August, the total value of municipal bonds issued nationwide was down about 40 percent compared with the same period a year ago - the largest decline in about two decades.
Market analysts attribute some of that drop-off to a natural slowdown after last year's rush to issue bonds before a federal stimulus program expired. But another reason is that government budgets are stretched so tight that local officials are not willing - or able - to siphon scarce tax dollars toward additional debt payments.
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