Number
090410
Version
ORIGINAL
Reference
Sponsor
ALD. DAVIS
Title
Resolution relating to the City of Milwaukee joining the National League of Cities in support of the creation of a federally-supported mutual bond insurance company.
Analysis
The current economic crisis has resulted in the downgrades of municipal bond insurance companies. The National League of Cities (NLC) has proposed that, in order to return stability to the municipal bond market, the federal government provide $5 billion in capital for the creation of the “Issuers Mutual Bond Assurance Company,” which will be owned by state and local governments as well as state and local government agency municipal bond issuers. This new company will endeavor to replace the 15 commercial municipal bond insurers that were downgraded in 2008 and 2009. Under this resolution, the City of Milwaukee joins the National League of Cities in urging Congress and the Administration to provide the financial support necessary to provide a strong capital base for a new bond insurance company.
Body
Whereas, The municipal bond market has been devastated by the downgrades of every single municipal bond insurance company resulting in many small, infrequent, and lower-rated issuers of municipal bonds no longer having access to the market or only at rates that are significantly higher than they were prior to the downgrades of the bond insurers; and
Whereas, The economic crisis has put state and local governments across the country under great fiscal stress, and this stress imperils essential government services that taxpayers, rate payers and their families rely on and governments’ ability to pay for them such that prudent steps must be taken to alleviate the cost burdens of state and local governments including the cost of tax-exempt borrowing; and
Whereas, There continue to be market conditions that threaten the continuing viability of existing insurers and the ability of new insurers to succeed in the market; a...
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