Just be careful. What you can't put a number on is what is good for an entity's long-term fiscal *resilience.* Locking away future revenue streams can make it harder for future decision-makers to adapt and react to changing conditions (macro, political, etc). It seems this was the gist of what CTW was saying last month about the RPM TIF. Also, I'm not sure that securitization makes the "math easier." The complex level and cost of underwriting and legal analysis for each future issuance start to grow the more of this you have. With that said, if it saves an entity a lot of future debt or, if its existence helps the entity access sources of funds that would otherwise not be there (like a federal grant or a private investment), then it could, in its entirety, be a good thing.
What my hacker brain got out of this is that the city of Chicago should start a positive feedback loop by lowering other forms of tax, raising sales taxes commensurately, and issuing new lower-interest STSC bonds to pay off higher-interest municipal bonds.
These sorts of maneuvers basically undermine the only thing that could possibly put Chicago and various other municipal corporations back on a sound financial footing, namely bankruptcy.
Aaron, spot on. This securitization is like selling your body parts. Future income becomes subject to a mortgage for lenders only, leaving no assets for a fresh start.
Just be careful. What you can't put a number on is what is good for an entity's long-term fiscal *resilience.* Locking away future revenue streams can make it harder for future decision-makers to adapt and react to changing conditions (macro, political, etc). It seems this was the gist of what CTW was saying last month about the RPM TIF. Also, I'm not sure that securitization makes the "math easier." The complex level and cost of underwriting and legal analysis for each future issuance start to grow the more of this you have. With that said, if it saves an entity a lot of future debt or, if its existence helps the entity access sources of funds that would otherwise not be there (like a federal grant or a private investment), then it could, in its entirety, be a good thing.
What my hacker brain got out of this is that the city of Chicago should start a positive feedback loop by lowering other forms of tax, raising sales taxes commensurately, and issuing new lower-interest STSC bonds to pay off higher-interest municipal bonds.
These sorts of maneuvers basically undermine the only thing that could possibly put Chicago and various other municipal corporations back on a sound financial footing, namely bankruptcy.
Aaron, spot on. This securitization is like selling your body parts. Future income becomes subject to a mortgage for lenders only, leaving no assets for a fresh start.