Category Archives: Uncategorized

Muni Credit News September 8, 2025

Joseph Krist

Publisher

GAS

Jacksonville Electric Authority (JEA), the municipal utility for Jacksonville, Florida, plans to spend $1.57 billion to develop a 675-MW combined cycle gas plant, replacing an older unit that will retire in 2031. The new gas plant will be located at the site of the former St. Johns River Power Park, a complex of coal fired generation developed in the early 1980’s to move JEA off imported oil. It would replace a 50 year old unit.

In Texas, legislators conceived of the Texas Energy Fund in the spring of 2023, with the goal of incentivizing and accelerating the construction of more natural gas power plants to support the state’s strained power grid. In the aftermath of the disastrous winter storm experience in 2021, the idea certainly made sense to some. The Fund was authorized to make $7.2 billion worth of low-interest loans and bonus grants to fund gas generation.

That has not resulted in large scale development of gas generation. Only two new proposals have been approved so far through the Fund’s In-ERCOT Generation Loan Program, one of four programs included in the fund intended to motivate energy companies to building new gas power plants. The two loans, both to be paid back over 20 years at a 3% interest rate, would account for $321 million of the $7.2 billion total. The plants would have a capacity to generate 578 megawatts of electricity.

The program is running into a problem. Of the 25 total loan applications that have advanced to the fund’s due diligence review stage, seven have been pulled from consideration by the companies that filed them, citing supply chain issues or forecasts that the projects would not be as profitable as expected. An eighth application was denied funding last fall when there were charges of fraud.

The Electric Reliability Council of Texas (ERCOT), the state’s power grid operator, is predicting energy demand in the state will double by 2030. Legislators this spring extended the deadline for spending the $5 billion they approved in 2023. Under the original legislation creating the fund, the PUC had until the end of this year to distribute the money earmarked for power plant construction loans.

RENEWABLES

The United States added more than 15 GW of new electricity generation resources between January and May this year, according to the Federal Energy Regulatory Commission. Renewables dominated the growth led by 11.5 GW of solar, followed by 2.3 GW of wind and 1.3 GW of gas. Gas still constitutes 43% of the country’s total generating capacity. Coal is 15% and declining; solar is a little over 11%; wind is 11.8%; and nuclear is 7.7%.

Out of 133 GW of “high probability” additions expected to come online by 2028, FERC projects that 84% will be from solar (90 GW) and wind (23 GW). Gas is projected to make up about 20 GW — just 15%. Solar continues to grow as it has been the largest source of new generating capacity added each month for 21 consecutive months, since September 2023. It is estimated that at least 25%-30% of U.S. solar capacity comes from small-scale systems, such as rooftop arrays, that are not included in FERC’s data. In addition to new generation, the grid saw 244 miles of new transmission lines reach completion.

The growth of renewables and the cost effectiveness of those facilities is what makes the federal attitude towards wind seem insane. The recent spate of threats to “de-permit” offshore wind and the infrastructure to support wind threatens way more jobs than the average American thinks. One of the factors supporting the decision to relent on efforts to stop the Empire Wind project off NYC was the 1,000 on-shore jobs that were expected to result from the project.

That economic and jobs impact has not been enough to change the administration’s mind towards wind. Several projects had received federal support in great part because of the jobs potential of supply terminals for the industry. Just this week, the administration’s meat ax was taken to the Sparrows Point Steel Marshalling Port Project, which had been awarded $47.3 million in Port Infrastructure Development Program.

Others on the hit list include the Arthur Kill Terminal, an offshore wind port in New York, which had been allocated $48 million in PIDP funding; and the Humboldt Bay Offshore Wind Heavy Lift Multipurpose Marine Terminal, which had been allocated $426.7 million in Nationally Significant Freight and Highway Projects funding.

These decisions come in the wake of the Department of the Interior issuing a stop work order so that the 700 MW project off the Rhode Island coast could no longer proceed. The administration also intends to revoke the approved construction and operations plan for the 2 GW Maryland Offshore Wind project off the coast of Maryland and Delaware.

SINGING FOR THEIR RATING

The Metropolitan Opera is the largest performing arts organization in the United States. The Met’s annual budget is about $334 million. The loss of attendance during the pandemic began to accelerate trends of declining financial results and attendance. That led to drawdowns on the Met’s endowment is now valued at $232 million, down from $306 million in 2022. That was already considered small for an institution of its size.

Paid attendance is still below prepandemic levels: It was 72 percent of capacity in the 2024-25 season, compared with 75 percent before the pandemic. When the impact of discounting is included, the company took in only 60 percent of its potential box-office capacity last season. One saving grace: it raised an average of $174 million a year over the past three years.

With no real sign in sight of a turnaround in the Met’s outlook and a shrinking endowment, out of the box thinking was required. That has led to an agreement between the Met and the kingdom of Saudi Arabia which calls for the Met to perform there for three weeks each year. The deal is expected to bring the Met more than $100 million. For five years beginning in 2028 the Met will stage operas like Mozart’s “The Magic Flute” and Puccini’s “La Bohème” for three weeks each February.

The infusion of cash can buy some time from a ratings perspective but the Met still faces considerable headwinds. Attendance was significantly down before the pandemic. Changes in the offerings alienated long time attendees without generating increased attendance from younger audiences. Management acknowledges that donations – an always important revenue source – from younger donors has been disappointing.

UNIVERSITY OF CALIFORNIA

Most if not all of the attention focused on the President’s war on academia has been on private institutions, especially the Ivy League. Recent efforts by the administration have been directed at the University of California (UC). UC “receives over $17 billion per year from the federal government — $9.9 billion in Medicare and Medicaid funding, $5.7 billion in research funding, and $1.9 billion in student financial aid per year. “We would need at least $4-5 billion per year to minimize the damage” according to the school president.

Already, more than $500 million in federal grants have been suspended at UCLA. The government is asking for $1.2 billion to restore them. The Governor wants UC to sue but legally it’s not his call. The Board of Regents has that task. As this process plays out, it represents another potential source of pressure on the State’s budget. It is noted that Harvard scored an initial legal victory against its loss of research funding in its parallel dispute with the President.

PASSING ON THE SALT

The Corpus Christi, TX City Council moved to cancel a contract for a seawater desalination plant. The plant was projected to help the city attract additional industrial development. Proposed in 2019, the cost was projected at $160 million. In July, project manager Kiewitt produced an initial design and cost estimate that put the project at $1.2 billion and expected its operations to begin in summer 2028. That was not going to work. It still leaves the city in a very precarious water supply position.

The project was initially planned to begin operations by 2023. Much of the projected industrial expansion materialized but the new water supply did not. The last seven years have seen drought conditions in the city’s water shed. So, an insufficient supply of replenishing rain was accompanied by sharply increased water use by the expanded industrial base.

Initially, the proposed plant would produce 10 MGD. In 2020, the yield projection was doubled and then raised to 30 MGD. That helped to increase costs substantially. At the same time, the city is under pressure from the Governor’s office which said the state would cut all funding to Corpus Christi if it didn’t proceed with the plant.

Without additional water supply, Corpus Christi could face an emergency situation by December 2026, city officials said, forcing a 25 percent reduction of water use by the large industrial users. Corpus Christi intensified its water-use restrictions for citizens this year in March, banning all outdoor water use. Industrial facilities were exempt from drought restrictions under special city rules. The city will explore other water projects, including groundwater import and wastewater recycling. A possible large-scale groundwater import project wouldn’t likely be completed until 2030

CLIMATE RISK

A private study funded by a real estate entity has taken another shot at quantifying the risk to real estate in the U.S. The results provide support for concerns about the potential impact of natural disasters, especially flooding. It’s findings are not really surprising.

The study finds that 26% of U.S. homes are at severe or extreme risk, with flood risks particularly underestimated by the federal government. Nearly 6 million homes ($3.4 trillion in value) face severe flooding in the next 30 years, about 2 million more than FEMA estimates, due to outdated flood maps. Major metro areas like Miami, New York, Tampa, Los Angeles, and Houston collectively hold hundreds of billions of dollars in at-risk property.

Miami-Fort Lauderdale-West Palm Beach leads in total property value at risk of severe flood and wind damage, with all homes in certain metros such as Miami and Houston classified as highly vulnerable. Miami homeowners paying an average of 3.7% of a home’s value in annual premiums—the nation’s highest rate. New Orleans and several Florida metros show the highest share of homes exposed to flood risk relative to overall property value.

California holds nearly 40% of the nation’s total wildfire-exposed property value, some $3.4 trillion, with Los Angeles and Riverside as the hotspots of concern. Outside California, western cities such as Colorado Springs, Colo., and Tucson, Ariz., also face high wildfire-related property threats.

NUCLEAR

The Tennessee Valley Authority announced an agreement with ENTRA1 Energy to develop up to 6 GW of new nuclear power in the largest U.S. small modular reactor deployment program to date. The agreement calls for ENTRA1 to develop and own six “energy plants” across TVA’s seven-state territory. The nuclear company would then sell their output to the federal utility.

The project will utilize small modular reactors developed by NuScale Power. ENTRA1 holds the rights to commercialize, distribute and deploy NuScale’s products and services. The Nuclear Regulatory Commission in May granted approval of NuScale’s 77 MW power module and the company’s design for a small modular nuclear plant with a capacity of 460 MW.

Disclaimer: The opinions and statements expressed in this column are solely those of the author, who is solely responsible for the accuracy and completeness of this column. The opinions and statements expressed on this website are for informational purposes only, and are not intended to provide investment advice or guidance in any way and do not represent a solicitation to buy, sell or hold any of the securities mentioned. Opinions and statements expressed reflect only the view or judgment of the author(s) at the time of publication, and are subject to change without notice. Information has been derived from sources deemed to be reliable, but the reliability of which is not guaranteed. Readers are encouraged to obtain official statements and other disclosure documents on their own and/or to consult with their own investment professional and advisors prior to making any investment decisions.

Muni Credit News August 18, 2025

Joseph Krist

Publisher

It’s time to take some time to enjoy the summer here in the mountains. To that end, we will publish our next issue dated September 1. Enjoy the weather and the long Labor Day weekend!

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CHICAGO

The budget season is officially under way in Chicago as the two major entities – the City and CPS- begin their budget processes. CPS has an earlier deadline for submitting its budget – this month versus mid-October for the City. As things stand in Chicago, a budget gap for fiscal 2026 has been forecast for the City’s budget of $1.1 billion. This most recent estimate comes as the Chicago Public Schools face near term deadlines for the development and enactment of a budget. CPS also faces a significant budget gap but it also is dealing with requests by the City that CPS pick up additional pension costs currently funded by the City.

The funding of those pensions has been a core source of dispute between the Mayor and the City. The last school CPS CEO left after disagreeing with the Mayor’s plan for CPS to issue debt to fund annual pension requirements. So, it came as a bit of a surprise when the replacement CEO also did not want the pension hit on their budget or balance sheet. That major dispute needs to be worked out.

The City faces a range of unsavory choices in taking steps to fill the projected budget gap. Among them are raising garbage collection fees from the current $9.50 a month to as high as $52 could net $296.9 million a year, according to the mayor’s list of ideas. Others include reviving a head tax, under which big companies pay $4 a month per employee, which could raise $25.6 million; reinstating a property tax escalator that pegs annual property tax increases to the rate of inflation.

New items could include charging a professional services tax on things like haircuts, lawn care and car repair which could yield an estimated $305 million for the city. That would require approval in Springfield, making any effort too late for the FY26 budget. The Mayor is considering asking universities, churches and other nonprofits to make a payment in lieu of property taxes (PILOT) which could raise $52 million annually.

WIND

Recently, it was estimated that as much as $317 billion in lost investment could result from efforts by the Trump administration to stop wind generation development. That figure is based on the 790 projects totaling 213 gigawatts that developers plan to build in the years to come — all of which are at risk of delay or even cancellation under the administration’s policies.

One approach is that the US DOT has proposed a 1.2-mile setback in a country with as many highways and railroads as ours would restrict development on a huge swatch of the country’s land. Even just accounting for the Interstate Highway System and the network of U.S. highways, this would go a long way to stopping many projects in their tracks.

The New Jersey Board of Public Utilities delayed offshore wind power transmission infrastructure in the state by more than two years. The BPU said the decision follows President Donald Trump’s move to block plans for offshore wind development. The board also canceled its approval of the Atlantic Shores wind project, a two-phase wind farm between Atlantic City and Barnegat Light. The developer had requested that the contract for the project be cancelled this past June.

Orsted, the large Danish renewable energy developer, said that it would issue new shares worth 60 billion Danish kroner, or about $9.4 billion. The company said it was issuing the new shares because it was unable to carry out plans to sell a portion of Sunrise Wind, a large offshore wind project it is building 30 miles off Montauk Point in New York. Orsted expects Sunrise to begin operations in 2027.

Ørsted originally planned on building three projects serving New England and New York with Eversource Energy, a New England utility. However, Eversource sold its shares in those projects in 2023. Ørsted purchased complete control of Sunrise Wind for $625 million.

The Town of Nantucket has agreed to extend deadlines in its approval process for the Vineyard Wind project. The Town has made 15 demands of the operator after pieces of a wind turbine washed up on shore after an accident. The town’s demands fall into three broad categories: adequate communication, lighting, and emergency response planning.

MTA

S&P Global Ratings raised its long-term rating and underlying rating on Metropolitan Transportation Authority (MTA), N.Y.’s transportation revenue bonds (TRBs) outstanding to ‘A’ from ‘A-‘. The upgrade reflects New York State’s decision to increase the payroll mobility tax for MTA’s capital programs, the initial financial success of MTA’s Manhattan congestion pricing program, ongoing recovery in ridership levels, maintenance of healthy liquidity levels, clarity regarding funding sources of the recently approved 2025-2029 capital program, and manageable projected out-year deficits.

BRIGHTLINE

This week brought the second S&P downgrade of the year for debt issued to finance the Brightline high speed rail project in Florida. S&P Global Ratings lowered to ‘BB-’ from ‘BB+’ its issue-level rating on the unenhanced bonds issued by the Florida Development Finance Corp. for the benefit Brightline Trains Florida LLC (Brightline). Brightline is looking to refinance some $985 million of project debt.

As we go to press, new bonds were offered with a 10% coupon with a mandatory put on June 15, 2026 at $104.25, putting the approximate yield on the put date at 14.891%. The $985 million Aug. 13 redemption is for Brightline Florida’s commuter bonds, which carry an 8.25% coupon and a $104.25 mandatory put on Aug. 13.

That reflects the limited market for the debt as well as the guarded outlook for improved operating results. S&P highlighted several areas of decline relative to its own projections for ridership and revenues. Long- and short-distance ticket revenue fell short of S&P’s previous base-case forecast (April 2025) by about 28% for the trailing-12-month period ending June 2025. The ability to raise prices despite year-over-year ridership increases has stalled, particularly for long-distance trips, which account for 75%-80% of ticket revenue. Year-to-date 2025 long-distance fares have declined by 2.4% compared to the same period for 2024.

The existing right of way which helped this project avoid significant environmental and land ownership issues may now be posing a problem. The Florida East Coast Railway last month sued Brightline saying the commuter service violates existing agreements and threatens its freight operations. The next 12-18 months will be a key period for Brightline to establish reasonable operating results.

TARIFFS AND PORTS

July was the busiest month on record in the 117-year history of the Port of Los Angeles. The Port handled 1,019,837 Twenty-Foot Equivalent Units (TEUs), 8.5% more than last July. Retailers and manufacturers brought in goods at an elevated pace due to concerns of higher tariffs later this year. July 2025 loaded imports came in at 543,728 TEUs, 8% more than last year and the most imports ever in a month at the Port. Loaded exports landed at 121,507 TEUs, a 6% improvement from 2024. The Port processed 354,602 empty container units, 10% more than last year.

Seven months into 2025, the Port of Los Angeles has handled 5,975,649 TEUs, 5% more than the same period in 2024. The most recent 90 day delay in some tariffs on China will help to drive higher than average handlings but we expect some moderate slowdown to reflect the acceleration (especially from China) of shipments to beat the August 1 deadline.

FRACKING AND THE ECONOMY

About this time two years ago, we commented on the results of a report put out by the Ohio River Valley Institute regarding the impact of fracking on the economies of counties in Appalachia. (See 8.28.23) The data from that report showed that the benefits of fracking on local economies are often overstated. The project included 22 counties which produce 90% of fracked gas. The region is nicknamed Frackalachia.

The Institute has now released findings including two additional years of production. It also includes 8 additional counties which allows the report to cover 95% of the production in the area. Frackalachia is now a 30-county region in the Ohio River valley and northeastern Pennsylvania that is home to one of the world’s richest natural gas fields. The Marcellus and Utica shale plays produce nearly a third of US natural gas, an amount equivalent to 3% of global natural gas consumption.

Between 2008, prior to the start of the Appalachian natural gas boom, and 2023, GDP in the 30 principal gas-producing counties of Ohio, Pennsylvania, and West Virginia grew nearly 13% faster than that of the nation. The Frackalachian counties, which are clustered in north-eastern Pennsylvania and in the greater Ohio River Valley, have a combined population of 1.85 million people as of 2024. If Frackalachia were a state, it would rank 39th in population just behind Idaho and ahead of West Virginia.

So that’s been good for residents, no? Apparently not. When measured by growth in population, jobs, and other measures of prosperity, Frackalachia would be one of the poorest and fastest declining states in the nation. The number of jobs based in Frackalachian counties fell by one percent even as it grew 14% nationally. Incomes in the Appalachian natural gas counties grew at a rate that was only three-quarters that of national income growth. The Appalachian natural gas counties’ population declined by 3% while the nation’s population grew by 10%.

The report comes out in the wake of ongoing efforts to push natural gas as the fuel of choice for large industrial uses. Just this year, the Ohio legislature enacted Senate Bill 2 and House Bill 15 4, which encourage the development of gas-fired power generation, particularly in conjunction with the construction of data centers, and reduce the power of local governments to regulate such development.

The Pennsylvania Senate has passed Senate Bill 102, which would prevent any municipality that imposes limits or requirements on natural gas development that are more onerous than those contained in state law from receiving any share of Act 13 impact fee revenues paid to the state by the gas producers. And West Virginia recently enacted House Bill 2014 5, which is designed to encourage the development of data centers powered by coal and natural gas.

When measured by growth in population, jobs, and other measures of prosperity, Frackalachia would be one of the poorest and fastest declining states in the nation. The findings mesh with similar shortfalls in overall economic benefits of energy development in other parts of the country. Increases in drilling in existing traditional oil fields has not increased despite the increased activities. Technological advances have enabled producers to increase production without increasing employment.

NUCLEAR

The U.S. Department of Energy (DOE) announced that 11 advanced reactor projects will participate in the Nuclear Reactor Pilot Program to move their technologies towards deployment. The goal of the Reactor Pilot Program is to expedite the testing of advanced reactor designs that will be authorized by the Department at sites that are located outside of the national laboratories. Each company will be responsible for all costs associated with designing, manufacturing, constructing, operating, and decommissioning their test reactors.

Muni Credit News August 11, 2025

Joseph Krist

Publisher

AUTONOMOUS VEHICLES

A Florida jury last week found that flaws in Tesla’s self-driving software were partly to blame for a crash that killed a 22-year-old woman in 2019 and severely injured her boyfriend. The jury verdict, if upheld on appeal, would require Tesla to pay as much as $243 million in punitive and compensatory damages. The jury found that Tesla bore 33 percent responsibility for the crash, and blamed the driver

for the remainder.

The trial, in U.S. District Court for the Southern District of Florida in Miami, focused attention on the safety of Tesla’s driver-assistance system, known as Autopilot. This was the first federal jury trial stemming from a fatal accident involving Autopilot. Tesla has won at least one similar case filed in a California court and settled several others.

The decision comes just weeks after Tesla began limited testing of autonomous taxis in Austin, Texas. Elon Musk said in a recent conference call with investors that the service could cover half the population of United States by the end of the year. That would be unlikely. Federal safety officials were aware of at least 211 accidents from 2018 to 2023 involving Tesla cars operating with Autopilot engaged, according to evidence presented during the trial.

FEMA AND A DISASTROUS SUMMER

FEMA has been in the news for mostly the wrong reasons whether it be delays in request processing, poor communications and cumbersome processes. Originally, the Trump administration pledged to end the agency at the end of fiscal 2025 in September. That idea was quickly undermined by the magnitude of the Texas flood disaster. It is emerging how unprepared Kerr County was.

FEMA provides two types of aid after a declaration – one program is for individuals and one for local governments. The fund available to localities (Public Assistance) is much bigger. They get reimbursed for debris removal and repairs to public buildings. These grants operate as a cost-share, with the federal government covering a minimum of 75% and localities paying the rest. The program has indeed grown exponentially over time.

In fairness, two of the highest spending years were for costs related to COVID-19 responses. Nevertheless, the trend of annual growth would still be on a steady trend upwards without those “black swan” events. Now, the Trump administration is following through on an earlier pronouncement. FEMA comes to town when damages exceed a certain threshold: a state’s population multiplied by $1.89.

NASHVILLE TUNNEL

Transportation has been a significant issue in Nashville. Prior efforts to expand transit service as well as improve traffic conditions in the city. One project which failed to get voter approval would have involved the construction of a tunnel designed to speed through traffic. It succumbed to issues of equity and cost as well as current political winds.

Now, the state’s Governor seems to have decided that what Nashville needs is not a tunnel to move traffic through town but instead a tunnel to the City’s airport. The Governor seems to feel that cutting the commute to the airport from 15 to 8 minutes warrants a tunnel. He’s been helped to that conclusion by the Boring Co., the Elon Musk entity that digs tunnels to support proposed “hyperloops”.

Despite pitches to cities like San Jose, Nashville and even Dubai,just one of Boring Co.’s public proposals have progressed beyond the planning stage. To date, the company has only begun construction in Las Vegas, and while the city has approved 68 miles of tunnels, Boring has dug about eight miles, with fewer than four miles currently operational.

Given the highly politicized history of mass transit funding and development in Nashville, the approval of a lease of state land and the proposed tunnel has been a driver of opposition. The project was announced on one day and a lease approved later that same week. Then it was found that on July 18, the state issued a temporary license with the company, permitting it to access the three-quarter acre lot to begin work nearly two weeks before the lease was approved.

The company is on the hook for $250,000 if conditions of the agreement are not met, but is otherwise permitted to use the property for free during the 22-month lease.

SOLAR

The Minnesota Court of Appeals ruled that Xcel Energy can retroactively reduce payments to most of the roughly 30,000 Minnesotans who subscribe to community solar gardens. Community solar subscribers pay solar garden operators for the energy produced by their shares and receive corresponding bill credits from their electric utilities. Xcel used the standard cost shift arguments to support their position.

Minnesota cities, school districts and universities warned reducing the credit rate would broadly increase costs to the public. In public comments, the cities of St. Paul, St. Cloud and Burnsville said the change from bill credits based on the retail rate of electricity to a lower “value of solar” formula would cost them each millions of dollars over the remaining years of their 25-year contracts. Minneapolis said 65 of its 80 community solar subscriptions would flip from saving to costing the city money, risking a property tax rise.

In California, the California Supreme Court ordered a lower court to reconsider a state policy that reduced how much utilities have to pay homeowners with rooftop solar panels for the energy that they send to the electric grid. The court did not deem the new net metering policies were illegal but said a State Court of Appeal had erred in affirming the policy without fully reviewing it and by being too deferential to state regulators.

The Los Angeles Department of Water and Power (LADWP) announced the completion of the Eland Solar-plus-Storage Center project. The power generated by both phases of the Eland project will meet 7% of LA’s total energy consumption. The Eland Solar and Storage Center is located across more than 4,600 acres of desert. Eland’s massive facility includes 1.3 million solar panels and 172 storage batteries.

In December 2024, the first phase of the project was completed. The full operational Eland facility can provide more than 1,170 megawatts of renewable energy to Los Angeles, according to the LADWP. All energy generated from the project will be sold to Southern California Public Power Authority participants, including the LADWP under 25 year contracts.

Eland is unique in that it is LADWP’s first utility-scale, integrated solar and battery project. LADWP has over 1,100 megawatts (MW) of utility-scale solar previously installed. two large-scale solar facilities will capture a combined 400 megawatts of solar energy and store up to 1,200 megawatt-hours (MWh) of energy.

CLIMATE LITIGATION

A South Carolina state judge dismissed the City of Charleston’s lawsuit against fossil fuel companies. The judge found that while the lawyers argued the claims were about deception, “they are premised on, and seek redress for, the effects of greenhouse gas emissions.” He said that those issues fall squarely under federal and not state law, and that the court lacked jurisdiction over out-of-state companies. A 2021 U.S. Court of Appeals decision in the Second Circuit in a similar lawsuit filed by New York City against oil companies found that the municipalities could not use state tort laws to hold multinational companies liable for damages caused by greenhouse gas emissions.

At the same time, three state supreme courts that have affirmed lower court rulings against the companies’ motions to dismiss, in cases brought by Boulder, Colo., Honolulu and the state of Massachusetts. The Supreme Court in January of this year declined to hear a challenge to a lawsuit filed by Honolulu against oil companies over their role in global warming.

The Supreme Court in March declined to entertain argument that aimed to restrict states from suing oil companies for financial damage related to climate change.

The argument was brought to the high court by 19 Republican attorneys general, representing states including Alabama and West Virginia, who were trying to prevent other states, led by Democrats, from pursuing lawsuits against the oil industry. Those states include California, Connecticut, Minnesota, New Jersey and Rhode Island.

GEORGIA P3 FEDERAL LOAN

The U.S. Department of Transportation announced a loan of up to $3.89 billion from the Build America Bureau to a public-private partnership between the Georgia Department of Transportation (GDOT), the State Road and Tollway Authority (SRTA), and SR 400 Peach Partners LLC (Peach Partners). The State Route 400 Express Lanes Project will add new lanes in both directions along a 16-mile section from the Metropolitan Atlanta Rapid Transit Authority (MARTA) North Springs Station to one mile north of McFarland Parkway.

The design is intended to facilitate current MARTA and XPress bus connections. Peach Partners will also provide $75 million in future bus rapid transit (BRT) related improvements. MARTA will operate the future BRT system, which is expected to share the express lanes for approximately 12 miles. The USDOT previously allocated up to $3.4 billion in Private Activity Bonds to this project, bringing the total investment to approximately $7.5 billion. This piece of the financing is a TIFIA loan.

The project calls for Peach Partners to provide a $3.8 billion concession fee to GDOT that can help fund other roadway projects as part of the public-private partnership agreement.

WIND STILL BLOWING

The federal government can stop a lot of things on public land and right now those efforts are aimed at renewables especially wind. Whether at sea or on land, the Trump administration will do all it can to slow wind generation deployment. That doesn’t mean that all new projects will be halted in their tracks. Private projects on private land are not in the federal purview.

Minnesota Power has released plans to construct the 200-megawatt Longspur Wind project in west-central North Dakota. The proposed wind farm will consist of 45 turbines and will be located in Morton and Mercer counties, just west of Bismarck and adjacent to the company’s existing Bison Wind Energy Center—a facility with 165 turbines already generating around 500MW of wind power for the region.

The Longspur project will employ the existing infrastructure, including substations and the company’s 465-mile transmission line linking central North Dakota to northeastern Minnesota. Construction is scheduled to commence in 2026, with commercial operations expected to begin by the end of 2027. All this pending required multiple approvals at both state and county levels.

Dominion Energy’s 2.6-GW Coastal Virginia Offshore Wind project is still on schedule for completion by the end of 2026, and should qualify for Inflation Reduction Act tax credits under the new safe harbor deadlines according to company management. Dominion estimates that the new tariffs will make the project more expensive by $506 million, increasing the total cost of the project to $10.9 billion. The added expenses will increase customer bills by an average of three cents a month over the entire life of the project.

CARBON CAPTURE

Archer-Daniels-Midland anticipates resuming injection later this summer at its storage site in Decatur, IL. For more than 10 months, the carbon dioxide injection well which typically sends 2,000 metric tons of CO2 underground per day has been idled. It has gone unused after testing showed evidence of a potential fluid leak. Last year EPA issued a violation order to it, alleging the company had failed to meet the requirements of its Class VI permit and allowed CO2 and other fluids to move into unauthorized zones.

Class VI wells are used to inject CO2 underground for long-term geologic storage.

EPA said ADM needs to complete steps documented in an April letter from EPA to ADM before resuming CO2 injections. EPA has 235 applications for a Class VI now under review. Half of those applications have been submitted over the past 12 months. ADM is in the process of seeking approval from to EPA to add another Class VI injection well.

NUCLEAR

NextEra Energy has filed a request with the US Federal Energy Regulatory Commission seeking to reclaim interconnection rights that were previously transferred from the no longer operating Duane Arnold nuclear power plant in Iowa to a solar energy project. The single-unit 615 MWe boiling water reactor plant was taken out of service in 2020. The plant was the only operating nuclear unit in Iowa and had been producing around 9.2% of the state’s electric generation and 19% of its emission-free electricity.

A year ago, NextEra confirmed that it is looking into restarting the Duane Arnold nuclear power plant. In January this year, the company filed a licensing change request for Duane Arnold with the US Nuclear Regulatory Commission. The company said that instead of developing a solar energy project at the site, it now plans to “reaggregate Duane Arnold’s original interconnection rights to accelerate the recommissioning of the facility”.

In New York State, the Department of Public Service proposed extending the current subsidy program for Constellation’s four nuclear reactors from the current end date of 2029 through 2049. The payments would come from ratepayers. New York was one of the first states to subsidize nuclear power plant operations with direct funding to operators.

SEPTA FUNDING

Like its compatriots in Chicago, California and Seattle, SEPTA the Philadelphia area mass transit agency is facing its own “fiscal cliff”. This week, SEPTA said that the legislature needs to approve new funding by Aug. 14 or it would move forward with its first stage of fare hikes and service cuts. The state legislature is considering a plan which would increase the amount of state sales tax revenue transferred to public transit by 1.75 percentage points.

Transit has been a major obstacle to budget enactment. The commonwealth has roughly $11 billion in financial reserves. This will quickly be pressured as many agencies especially non-profit service providers rely on timely state payments for payroll and operating expenses. Republicans who control the state Senate have argued that more transit funding should be accompanied by a dedicated funding stream, such as taxing slot-like skill games, and more money for roads and bridges.

Neither the state House nor Senate is scheduled to return to Harrisburg for voting sessions until next month. It is possible that as has been the case in past years, lawmakers could adopt a short-term, six-month deal. After a period of timely budgets followed years of delayed ones, the Commonwealth seems to be falling back into its old ways.

Muni Credit News August 4, 2025

Joseph Krist

Publisher

TOURISM – NY LAS VEGAS

Evidence is starting to amass which shows the impact of efforts to restrict immigration is lowering economic activity. The impact is clear in places where tourism is a significant contributor their local economies. Las Vegas has been seeing a decline in visitors and casino handle. According to data from Smith Travel Research, hotel occupancy in Las Vegas fell 14.9% in June. The data worsened in July, with the city posting the sharpest decline in the nation for the week ending July 5, when occupancy fell to 66.7% — down from last year.

A major factor in the decline is fewer international visitors, which dropped more than 13% in June alone. International visitors will soon need to pay a “visa integrity fee” of $250. The fee will apply to all visitors who are required to obtain nonimmigrant visas to enter the U.S. This comes as Las Vegas was already battling with the economic impacts of lower visitor levels. According to the Nevada Department of Employment, Training, and Rehabilitation, the Las Vegas metro area ended 2024 with an unemployment rate of 5.9%, the highest of any large metro area in the country.

New York City expects 2 million fewer international visitors in 2025, a 17% decline with $4 billion in lost tourism spending. It is a problem because foreign visitors make up only 20% of arrivals but account for 50% of all tourism spending. The steepest declines are from Western Europe (Germany down 28%, UK down 14%) and Canada (car trips down 38%, air travel down 24%). The numbers were expected to be positive at the beginning of 2025. The impact has been so pronounced that estimates were significantly reduced in May.

VINEYARD WIND

Vineyard Wind, the offshore wind farm off Massachusetts, is now sending power to the grid from 17 of its planned 62 turbines, and another six are fully installed. This despite the pressures from the effort by the Trump administration to not only stop supporting wind turbine generation but to try to impede the operation of the existing wind generation fleet. A broken turbine blade and its impact on Nantucket is expected to lead to litigation against the project.

In the interim, Nantucket’s select board gave Vineyard Wind two weeks to respond to a list of demands, including that it meet deadline requirements for notifying local officials of emergencies. Violations could result in fines up to $250,000, the town said, although it was unclear how such a policy would be enforced. Fiberglas fragments of a massive wind turbine blade that broke apart off Nantucket began washing ashore last summer during the peak of tourist season after pieces of the blade at the Vineyard Wind project began falling into the Atlantic Ocean in July.

NATURAL GAS

The federal court for the Northern District of New York upheld New York state’s “gas ban” legislation. New York’s legislation is the first statewide law that restricts natural gas use in new buildings, effectively banning gas stoves and other fossil fuel appliances in most new construction starting in 2026. The plaintiffs argued that New York’s legislation is preempted by the federal Energy Policy and Conservation Act (EPCA), which prevents state and local governments from setting their own standards concerning energy efficiency or energy use of appliances.

The court also ruled that New York’s prohibition on the installation of fossil-fuel equipment does not concern the “energy use” of covered products as defined by EPCA and is therefore not preempted.

NUCLEAR

The Nuclear Regulatory Commission issued a series of approvals that allows the owner of the closed Palisades Nuclear Plant in Michigan to continue its process of restarting operations. The approvals allow Holtec to begin the fuel loading process starting in August. The Nuclear Regulatory Commission said that this is the first time a nuclear plant has been granted an operating license after being licensed for decommissioning.

ELECTRIC VEHICLE SALES

A record 607,089 EVs were delivered in the first six months of the year, but sales in the second quarter were still lower than in Q2 2024. A big part of that Q2 decline has to do with Tesla. Tesla doesn’t report its sales, but it delivered an estimated 60,000 fewer vehicles in Q2 compared to a year ago. General Motors sold 46,280 EVs in Q2, more than double its sales in the same period last year. Rivian reported lower deliveries in the second quarter. It reiterated that it still expects to build a new headquarters and an EV factory in Georgia. Smaller EV company Lucid says it delivered 3,309 cars in Q2.

BIG BEAUTIFUL IMPACTS

Cuts to SNAP are coming. The One Big Beautiful Bill reduces federal spending on the program by 15% by 2034. One in five New Mexicans uses SNAP—the highest rate in America. The state reckons that it is set to lose somewhere between $224m and $352m in federal funding in the first year alone. Almost 60,000 New Mexicans are likely to become ineligible for support. SNAP is available to those at or below 130% of the federal poverty line, around $3,400 per month for a family of four.

Previously, the federal government paid for all SNAP benefits, ensuring that even poor people in poor states received support. From 2028, the amount states will pay will be based on the amount of SNAP payments they disburse incorrectly, known as the error rate, on a sliding scale. Those with a low-enough rate can avoid paying entirely, while those that send more than 10% of payments incorrectly will have to pay for 15% of benefits. The national average is 11%

INCOME EXPERIMENT OUTCOMES

The movement to provide guaranteed incomes as a way to improve the lives of lower income Americans has long championed the perceived value of these plans. In some places like Stockton, CA, a guaranteed income program was conducted on a small scale with some positive results. Monthly payments were provided and contrary to the predictions of many, recipients used the money responsibly and the program was seen as a limited success.

Now, a new study of certain guaranteed income programs has challenged those results. Baby’s First Years is the first study in the United States to assess the impact of poverty reduction on family life and infant and toddlers’ cognitive, emotional, and brain development. One thousand eligible mothers were recruited in hospitals at the time of their child’s birth across four sites — New York City, greater New Orleans, the Twin Cities, and the Omaha metropolitan area. Mothers receive a monthly unconditional cash gift of either $333/month or $20/month for the first 52 months of their child’s life. Recruitment of study participants began in May 2018 and ended in June 2019.

What the study found was that after four years of payments, children whose parents received $333 a month from the experiment fared no better than similar children without that help, the study found. They were no more likely to develop language skills, avoid behavioral problems or developmental delays, demonstrate executive function or exhibit brain activity associated with cognitive development.

Children in the families getting the higher cash payments did no better on tests of vocabulary, executive function, pre-literacy skills or spatial perception. Their mothers did not rank them more highly on assessments of social and emotional behavior. And they were no more likely than the children in the low-cash group to avoid chronic health conditions like asthma.

FIRE INSURANCE

Wildfires continue to pressure utilities as they attempt to manage the risk of wildfire associated with poorly maintained equipment and management of the environment susceptible to damage from their equipment. The companies have been seeking a variety of ways to reduce or eliminate their potential for claims for damages from wildfires. The latest iteration of such a financial management strategy is being reviewed in Nevada.

In January, NV Energy asked the Public Utilities Commission (PUC) to allow it to establish a $500 million wildfire self-insurance policy to protect its customers from risk associated with a catastrophic fire caused or exacerbated by the utility’s equipment. the self-insurance policy would see NV Energy collecting funds from customers to cover potential losses, instead of purchasing traditional insurance from a third party insurer. The policy would cover any damages utility customers sustained in a fire if the blaze was found to be started by NV Energy’s equipment — it would not cover damages to the utility’s equipment or facilities.

The average Northern Nevada residential customer would see their bill increase by about $2.40 per month, while an average Southern Nevada residential customer would see an increase of about $0.50 per month (accounting for the higher risk of wildfire in Northern Nevada). By having customers pay into the fund over the next decade, the utility’s total wildfire insurance would exceed $1 billion.

The move comes as the availability and cost of insurance continues to steeply increase. In 2018, NV Energy paid approximately $1.35 million for insurance and received approximately $485 million in coverage, meaning each dollar paid resulted in about $360 dollars in coverage. For coverage this year, the company paid $54.34 million, receiving about $405 million in coverage — despite paying roughly 50 times more, each dollar results in less than $7.50 worth of coverage.

BIG TROUBLE FOR A SMALL UTILITY

The Holly Springs Utility Department serves some 12,000 retail electric customers in and around this small northern Mississippi town. It has provided power purchased from the Tennessee Valley Authority since 1935. In recent years, the utility has gained a reputation as an unreliable provider with opaque finances.

A winter storm in 2023 left some customers without power for two weeks. That and the lack of significant visible efforts to address reliability and/or resilience challenges drove political support to empower the State Public Service Commission to examine the utilities financial and operating issues. Now the findings of the review are out.

“Allowing them any more time would be fruitless as well as disrespectful to the utility’s long-suffering customers. “We believe our report makes clear that the City and (utility department) lack sufficient technical, operational, and management expertise to effectively reverse the downward trajectory this electric system has been on for some time,”

That’s harsh but true. The legislation backing the appointment of the consultant also allows the PSC, if it finds the utility can’t provide “reasonably adequate electric service,” to request a court-ordered receivership for the utility. The state’s consultant found that Holly Springs service falls below that standard. So, the state appoints a receiver and problem solved? Not so fast. The consultant recommends exploring one of the following options: selling the utility to another city or cooperative utility; converting it to a cooperative to open up access to low-interest loans; or eminent domain or condemnation. There was doubt expressed as to whether another entity could be found to manage a receivership.

The Tennessee Valley Authority is suing the city of Holly Springs for breaching a contract by continuing to mismanage its electric department. TVA, which has sold power to north Mississippi city since 1935, alleges Holly Springs breached a power contract between the two parties by taking funds from its utility department when it shouldn’t have, as well as by failing to make timely payments, increase its retail rates to customers, and provide regular financial updates to TVA.

ICE AND THE CALIFORNIA ECONOMY

The actions of federal immigration officers to carry out deportation policies in greater Los Angeles and agricultural areas of the state. There has been much speculation as to the potential economic impact of the reduced pool of labor resulting from ICE efforts at enforcement. The first of what will likely be many studies is out quantifying the impact.

A June report from the Bay Area Council Economic Institute found that, based on their wage contributions to the economy alone, undocumented workers generate nearly 5% of California’s gross domestic product. With 2.28 million undocumented immigrants living in California, they represent 8% of workers in the state. Researchers calculated the state’s agricultural industry would contract by 14% and the construction industry would shrink by nearly 16%.

Early reports from farmers are also not optimistic, with groups reporting severe labor shortages during peak harvesting season for many crops. Local hotels and other businesses that rely on tourism are heavily reliant on the immigrant workforce. Visit California, the state’s marketing agency, in May projected international visits would decline by 9.2% in 2025, due to negative sentiment toward the Trump administration’s trade policies.

MASS TRANSIT

The Los Angeles County Metropolitan Transportation Authority settled a lawsuit over alleged violations of state and federal law and Metro policy related to a multimillion-dollar contract to update subway cars ahead of the 2028 Olympics. The authority agreed to pay $250,000 to settle a lawsuit that alleged it violated state and federal law and its own manufacturing policy related to a multimillion-dollar contract with South Korean Hyundai Rotem to build at least 182 rail cars to replace much of its aging fleet.

Metro said “the delivery timeline has not been impacted” by the lawsuit. The transit agency still expects to receive 42 cars ahead of the Games, as was laid out in the original proposal. An additional 140 cars are expected to be delivered by May 2030.

In New York, the MTA is proposing raising the base transit fare by 10-cents to $3, with no customer paying more than $36 for subway and local bus rides in a seven-day period, according to the MTA. Monthly and weekly commuter rail passes would increase by 4.4% and tolls on bridges and tunnels would go up by 7.5%.

Muni Credit News July 28, 2025

Joseph Krist

Publisher

CHICAGO PUBLIC SCHOOLS

CPS projects a budget of $8.43 billion for FY 2026, with $5.8 billion in personnel costs and $2.6 billion for operations and funding charter schools. The district spends $817 million a year in loan repayments alone. Without cuts and revenue boosts, CPS projects a $1.3 billion deficit by 2030.

Three main factors are driving the deficit, according to CPS: Costs to serve students with disabilities, which have grown by $450 million since 2019. Building expenses that include $14 billion for backlogged repairs, and costs for more engineers and maintenance that have boosted spending by $100 million since 2019. Growing pension payments, including the $175 million CPS took over from the city.

CPS must present a balanced budget to the board by Aug. 28.

PENNSYLVANIA BUDGET

Pennsylvania has become a regular when it comes to being unable to make a budget before the start of the fiscal year. Pennsylvania’s 500 school districts face particular fiscal uncertainty. Cash reserves vary from district to district and may be earmarked for capital expenses like new school buildings, rather than operating expenses like staff salaries and utilities.

Pennsylvania’s Department of Education said it would not be able to make payments for adult basic education and the Early Intervention, Pre-K Counts, and Head Start programs on July 21, which is when payments for these programs are made each month. If there’s no deal by July 31, PDE will also miss payments for special education and community colleges. And if there’s no deal come Aug. 28, more substantial payments will be missed, including for basic K-12 education.

The state’s university system announced its first tuition hike in seven years, citing the unfinished budget. SEPTA, serving Philadelphia and its suburbs, and Pittsburgh Regional Transit, serving Allegheny County — have approved budgets that will reduce service if no deal to raise transit funding comes through. State payments are due in August for county services like child welfare, mental health, and substance use disorder programs.

FIRE

Fire has been on everyone’s mind after the fire disaster in greater Los Angeles to start the year. While the area continues to attempt to recover and/or rebuild, wildfires are becoming a real concern nationally. So far this year, there have been 41,069 wildfires reported in the United States and a total acreage of 2,892,545 has burned. This is higher than the 10-year-average number of fires, but lower than the average number of acres burned.

As this is written, three new large incidents have been reported for a current total of 83 large incidents nationwide. Nearly half of the active fires are in Alaska which had its first heat advisory ever. California, Colorado, Oregon, and Washington all are the site of six fires.

OREGON TRANSPORTATION FUNDING UPDATE

Gov. Tina Kotek will call lawmakers into a special session in late August to take up the issue of road funding in the state. In the meantime, the Governor will delay nearly 500 layoffs at the Oregon Department of Transportation, ensuring 12 maintenance facilities throughout the state remain operational. Those layoffs were scheduled to take effect July 31. (See MCN 7.14.25). They will instead be delayed 45 days.

The current estimated funding shortfall for ODOT for fiscal 2026 is $354 million. A variety of proposals have been offered ranging from expense cuts to a significant gas tax hike. The process is complicated in that the ODOT budget fixes will be part of the state’s overall transportation funding plan. Any increased revenues from a higher gas tax would be shared with cities, counties, transit agencies, and bicycle group.

A 6-cent hike to the state gas tax is estimated to be enough to forestall ODOT layoffs and send money to city and county road departments that are also strapped for cash. a 0.1% tax on Oregonians’ paychecks that goes to public transit. Transit agencies have warned that funding shortfalls will lead to future service cuts if that isn’t increased. Democrats proposed increasing the tax to 0.18% during this year’s session.

MILEAGE FEES

The move to use mileage fees as a base source of user funding for roads is about to receive a potential boost politically. In testimony before Congress, the American Trucking Association said “We’re looking seriously at advocating for a registration fee that applies to everybody – trucks, cars, electric vehicles,”. “You already register your vehicle at the state [motor vehicle agencies], you simply pay for what you normally would pay in fuel costs at the pump. You get rid of the gas tax, the tire tax, and put it in a registration fee.”

There is less unanimity in the industry among the small carrier and owner operator segments. Their trade group supports a registration fee to capture electric vehicles while actually advocating for a rise in the federal gas tax.

HE’S NOT DOING THE WIND THING

The Trump administration has canceled a $4.9 billion loan guarantee for the Grain Belt Express. (See 7.7.25 and 7.21.25 MCN). The Energy Department said Wednesday that its Loan Programs Office has terminated a commitment for the first phase of the Grain Belt Express project. The loan was issued by the Biden administration in November 2024.

When it approved the project, the Missouri Public Service Commission found that Grain Belt would save Missourians $17 billion in lower electric bills. The private developer of the project, Invenergy says it has obtained the vast majority of those easements through voluntary negotiations with landowners. For the rest, the project was granted the right of eminent domain. That is what opponents of the project seized upon to stop the project. As is the case with carbon pipelines, eminent domain has emerged as a primary source of opposition.

We find it interesting that the announcement of the cancellation of the loan highlights that it is at the request of Missouri Senator Josh Hawley. Initially, opposition was driven by the fact that so little of the power being transmitted was to be available to Missouri utilities. Overtime, the project has contracted with 39 municipal utilities in Missouri, including Columbia Water and Light.

PUERTO RICO SOLAR

A private provider has been selected to install and maintain Energy Resilience Hubs in five Puerto Rico communities in 2025. Each site will feature solar generation and battery storage to maintain electricity for essential services during outages caused by natural disasters or grid failure. The 2025 effort is funded through a cooperative agreement with the U.S. Department of Energy and is expected to be completed by September.

For the past two weeks, LUMA Energy, Puerto Rico’s grid operator has relied on tens of thousands of batteries scattered across the island to overcome energy shortfalls and help deliver power. It is the first operational behind-the-meter virtual power plant in Latin America and the Caribbean. In May, Puerto Rico’s Energy Bureau, which regulates utilities, approved an emergency expansion of the “customer battery energy sharing” program in anticipation of a projected generation shortfall during the summer.

The Puerto Rico Energy Public Policy Act of 2019 codified the role of solar and storage in the island’s energy system and set a 100% renewable energy target by 2050. There are about 175,000 households with solar, and at least 160,000 of those also have storage. Puerto Rico’s Republican governor, Jenniffer González Colón

recently expressed support for maintaining the existing net metering system. Unsurprisingly, Puerto Rico Electric Authority opposed that. PREPA is seeking to add a fixed charge to net metering program participants.

LAND PORTS

There has rightfully been emphasis on levels of activity at the country’s marine ports in the ever changing tariff environment. We don’t know how this will all play out by the latest deadline of August 1. We do know where to look for potential impacts on cross border land traffic between the U.S., Mexico, and Canada.

Detroit, Port Huron, and Buffalo are the top truck ports for U.S. freight flows with Canada, while Laredo, El Paso, and Otay Mesa are the top truck ports with Mexico. Detroit, Port Huron, and International Falls are the top rail connection ports for U.S. freight flows with Canada, while Laredo, Eagle Pass, and El Paso are the top rail connection ports with Mexico.

Chicago, Port Huron, and Minneapolis are the top pipeline connection regions for U.S. energy freight flows with Canada. El Paso, Hidalgo, and Laredo are the top pipeline connection regions with Mexico. Port of Boston, Arthur, and Portland are the top water port connections for U.S. energy flows with Canada. Port of Houston, Arthur, and Texas City are the top water port connections for U.S. energy flows on the Southern border.

REBUILDING L.A.

Some 800 homeowners who lost homes in areas affected by wildfires applied for rebuilding permits as of July 7, according to the Los Angeles Times. Fewer than 200 have received the permits, however. The City of Los Angeles takes about 55 days on average to approve a wildfire rebuild, and the broader Los Angeles County takes even longer.

Insurance companies in California have been dropping some of their customers in high fire-risk areas, leaving them no option besides the FAIR Plan, the state’s high-priced, limited-coverage insurer of last resort. As the result of the scale of the fires, the FAIR Plan had to collect levy additional assessments totaling an additional $1 billion from its member companies, a move that will raise property insurance prices.

The realities of the current situation are that a combination of underinsurance, inflated construction costs, competition for skilled workers and pressure on the general unskilled workforce in the region resulting from the immigration crackdown. All of those factors are driving an increased fear that many victims will move rather than rebuild.

COAL

The U.S. Energy Information Administration reports that coal-fired power plants will remain relatively well-stocked through the end of next year. Power plants in the United States had 124 million short tons of coal on-site at the end of June for them to consume that coal at a rate of about 1.3 million short tons per day, meaning they had about 93 days’ worth of fuel on-site.

Days of burn is calculated by dividing coal inventories held at power plants by a seasonal consumption rate. EIA forecasts days of burn will range between about 90 and 120 days between now through the end of 2026, or about a month’s worth of coal more than power plants had on-site between 2019 and 2022. The clear impact of policy changes including the mandated operation of coal generation is showing up.

Coal inventories held at U.S. power plants have fallen since early 2024, coal consumption in the U.S. electric power sector has also fallen since then, so the supply measure of days of burn remains relatively high. Coal shipments to power plants have declined in line with coal consumption in the U.S. electric power sector.

The electric power sector accounted for more than 90% of U.S. coal consumption in 2024. U.S. coal consumption in the first quarter of 2025 was 18% more than in the first quarter of 2024. In its short-term forecast, EIA expects coal’s share of U.S. electricity generation to increase from 16% in 2024 to 17% in 2025 and then decrease to 15% in 2026. It’s clear that the use of coal does correlate with the price of natural gas. As natural gas prices increased in the first quarter of 2025, coal became more competitive driving an estimated 6% increase in 2025 consumption.

Muni Credit News July 21, 2025

Joseph Krist

Publisher

PORTS AND TARIFFS

The Port of Los Angeles handled 892,340 Twenty-Foot Equivalent Units (TEUs) in June, 8% more than last year. It was the busiest June in the 117-year history of the Port of Los Angeles. According to the Port “Some importers are bringing in year-end holiday cargo now ahead of potential higher tariffs later in the year,”. “July may be our peak season month as retailers and manufacturers bring orders in earlier than usual, then brace for trade uncertainty.

June 2025 loaded imports came in at 470,450 TEUs, 10% more than last year. Loaded exports landed at 126,144 TEUs, a 3% improvement from 2024. The Port processed 295,746 empty container units, 7% more than last year. After six months in 2025, the Port of Los Angeles has handled 4,955,812TEUs, 5% more than the same period in 2024. The latest delay in the trade war has extended the period of lower tariffs to August 1.

The negative impacts of tariffs are already being felt in the Port of Oakland. Port of Oakland June container volume declined, as shippers and carriers adjust to softening demand and ongoing tariff uncertainty. The Port handled 168,460 TEUs (twenty-foot containers), down 10.1% from May, and 12.8% from June 2024, when 193,158 TEUs passed through Port facilities. Year-to-date container volume remains higher than the same period last year. Total volume registered 1.14 million TEUs, marking a 0.6% increase over June 2024.

Loaded imports were up 1.5%, while loaded exports experienced a 1.3% decrease. Loaded imports totaled 70,334 TEUs, marking an 11.3% decline from May, and a 16.3% drop from June 2024, when 84,040 TEUs transited Port facilities. Loaded exports registered 59,593 TEUs, marking an 11.5% month-over-month decline, and a 10.3% decrease from June 2024, when the Port handled 66,424 TEUs.

RURAL AMERICA

The ongoing uncertainty with the prosecution of the tariff trade war is taking its toll in many ways on the rural economy. Commodity pricing has not been favorable. Program changes at the federal level are closing long established outlets for commodities especially grain. Input and capital costs are rising. Now with the enactment of the BBB, more changes are coming October 1.

The 2002 Farm Bill created the program now known as REAP; it was given its current name under the 2008 Farm Bill. For over two decades, the federal Rural Energy for America Program has provided grants for solar, wind, energy-efficiency upgrades, grain dryers, biodigesters, and other projects in rural America. The most common use case for REAP grants is helping farmers install solar.

The 2022 Inflation Reduction Act funded REAP with some $2 billion, but those funds will soon run out. Under the Trump administration, A U.S. Department of Agriculture document outlined its Make Agriculture Great Again agenda. Going forward, REAP “will disincentivize funding for solar panels on productive farmland.” The program will likely revert to the lower funding level of $50 million per year ensured by the current iteration of the federal Farm Bill.

VIRGINIA TOLL REBATES

The Virginia Department of Transportation (VDOT) is set to cancel US$36m in unpaid toll debt accumulated by drivers who used the Midtown and Downtown tunnels in the city of Portsmouth, as part of a targeted effort to address long-standing concerns about the potential impact of tolls on working commuters with limited means. The Midtown and Downtown tunnels are operated under a 58-year public-private partnership (PPP) between VDOT and Elizabeth River Crossings (ERC), a private concessionaire owned by Spanish infrastructure group Abertis. The PPP includes tolling, maintenance and operations across both tunnel facilities.

Although ERC remains contractually entitled to pursue unpaid tolls under the PPP, the firm agreed to waive collections in exchange for reimbursement from the state.

The state will cover the full cost of the US$36m debt write-off using funds from its Toll Relief Program, introduced in 2022 under then-governor Ralph Northam to support frequent tunnel users earning less than US$50,000 per year. To qualify, drivers must reside in eligible ZIP codes and make a minimum of eight trips per month through the Midtown or Downtown tunnels.

FOLLOWING UP

In Los Angeles, MTA estimated a ridership count of roughly 23.7 million last month on its bus and rail systems — a 13.5% drop from May and the lowest June on record since 2022, when numbers had started to rebound since the pandemic emergency, according to Metro data. Metro’s numbers fell to its lowest levels of the year in June after the immigration raids throughout Los Angeles County. The large immigration sweeps began June 6.

Senator Josh Hawley, Republican of Missouri, said he had secured a commitment from Energy Secretary Chris Wright to cancel a conditional loan guarantee that the federal agency had granted to the developers of the Grain Belt Express. (See MCN 7.7.25)

The New York State Public Service Commission has terminated its offshore wind transmission planning process due to stalled federal permitting. The commission cited recent federal actions halting new offshore wind leasing and permitting, which it said make short-term project execution unfeasible.

The Maine Governor’s Energy Office was supposed to issue its first solicitation for energy generated by offshore turbines at the beginning of July, according to a 2023 law. But last month the Maine Public Utilities Commission agreed to the office’s request to extend that deadline indefinitely the extension was due to “recent changes in the energy landscape that have caused significant uncertainty in the offshore wind industry, including shifts in federal energy policy and market conditions.”

STADIUM NEWS

The Tampa Bay Rays may be poised to finally play home games in their own stadium in Tampa. A sale of the team had been in the works since talks with the City of St. Petersburg over the replacement of the existing but damaged stadium that had served as the Rays home since their inception. A sale was reported this week to a group led by a Jacksonville developer for about $1.7 billion. It is believed that new ownership would have the team play in a stadium in Tampa.

The battle over the future location of Kansas City’s Royals and Chiefs is heating up. A bipartisan council of Kansas lawmakers voted Monday to extend by six months the deadline for the Missouri-based Kansas City Royals or the Kansas City Chiefs to accept economic development incentives from Kansas for construction of sports stadiums. The 2024 law that established procedures for issuance of STAR (Sales Tax and Revenue) bonds to cover 70% of construction costs for one or both stadiums and support structures had a deadline of June 30, 2025. The statute gave the LCC authority to add another year to the timeline.

Missouri offered to finance up to 50% of the cost to renovate or build new stadiums for the Royals and Chiefs. Missouri’s legislation authorizes bonds covering up to 50% of the cost of new or renovated stadiums, plus up to $50 million of tax credits for each stadium and unspecified aid from local governments.

Muni Credit News July 14, 2025

Joseph Krist

Publisher

NEW ORLEANS 20 YEARS AFTER

Researchers at Tulane University and the Jet Propulsion Laboratory released a study highlighting emerging areas of risk from subsidence in the City of New Orleans. The report comes as the 20^th anniversary of the Hurricane Katrina disaster nears this August. Reductions in ground elevation relative to sea level due to historic and recent subsidence likely not only played a part in levee failure in Hurricane Katrina but also accounted for the extreme post-storm flooding depths in parts of the city. While the US Army Corps of Engineers conducted a significant project to repair and enhance seawalls and levees, there are still risks to the system as the result of natural activities.

Although most of New Orleans is generally stable, rapid elevation loss occurs in parts of the city (up to −20 millimeters per year) and on flood protection walls constructed following Hurricane Katrina (up to −28 millimeters per year). One area of concern with potential credit implications involves the City’s airport. Localized areas of greater elevation loss (<−15 mm/year) are present at the Louis Armstrong International Airport. That area of elevation loss at rates of <−20 mm/year around New Orleans International Airport as due to the soil disturbance associated with construction of a new terminal in 2016–2019.

HIGH SPEED RAIL

The State of California has responded to the effort by the US Department of Transportation to terminate two grants made to finance a portion of the proposed high speed rail line from LA to SF. California officials said the project was in compliance with federal grant requirements and would indeed meet the 2033 deadline to start limited passenger operations within the Central Valley.

The federal government claims that the state had made only minimal progress on construction. Across an initial 119 miles of construction, 54 structures and 70 miles of rail bed — 59 percent of the total — had been completed. The state also notes that an electrified rail system between San Francisco and San Jose was also in place, with infrastructure currently used for the commuter rail system but intended for future high-speed operations. And it noted that environmental reviews

were now complete for the entire expanse between the Bay Area and Southern California.

On the funding side, the project has used up nearly all of a $9 billion bond approved by voters in 2008. There is an estimated $4 billion in funds remaining from the project’s share of greenhouse gas fees that the state collects. It will continue to collect $1 billion per year in those funds, leaving the state with an estimated $6 billion to $8 billion to continue construction over the next three years.

CARBON CAPTURE

In June (6.2.25 MCN) we commented on legislation under consideration in Illinois to prevent carbon sequestration to limit impacts on an aquifer serving some 800,000 with drinking water. In 2024, legislators enacted a two-year moratorium on new carbon sequestration pipelines through the SAFE CCS Act, which also addressed loopholes in federal regulations. Now, a new bill also requires that the state conduct a five-year study on carbon sequestration to determine any additional risks. It awaits the Governor’s signature.

ROAD FUNDING IMPACTS

In Oregon, the state legislature considered but did not pass increased transportation funding. The money was needed to close a $300 million budget shortfall in the Oregon DOT. Now, the lack of increased funding is having a direct effect. Some 483 Oregon Department of Transportation employees will be laid off in what is being called the largest round of layoffs in the state government’s history.

The layoffs are the first of two rounds of cuts. They include road maintenance crews, technical support staff and operations staff. The Department has estimated that the total of layoffs could be 700. 100 more employees could lose their jobs in a second round of layoffs expected to take place in early 2026, absent legislative action. Planned and existing infrastructure projects will be canceled or delayed. The agency is also eliminating 449 vacant positions. In total more than 900 positions at the state transportation agency will be gone.

In Illinois, a bill proposing a pilot program for a mileage-based tax on drivers failed to pass the state senate. The trial would have tested the reliability, the ease of use, cost, and public acceptance of technology and methods for counting miles. The program would have looked at the enforceability of the road usage charge and considered how drivers could have evaded or manipulated the fee. Illinois has the second highest gas tax in the U.S.

MASS TRANSIT FUNDING

The major mass transit agencies have been dealing with the fiscal impact of the pandemic and its aftermath. Now, they have to operate in an environment of hostility to federal financing for mass transit. This state budget cycle saw the issue of aid to mass transit move to the fore. The responses across the country have varied.

New York’s early budget cycle saw the State harden its stance against efforts by the US DOT to somehow stop congestion pricing. The federal opposition focused attention on mass transit funding which resulted in a new plan for state monies to cover the costs of the ongoing capital needs of the MTA. The agency had been looking at a significant financing shortfall given federal hostility to funding. We will see if pending lawsuits can be settled to remove any uncertainty about congestion pricing.

In California, the state budget includes more than $1 billion in funding and a $750-million loan for Bay Area transit. The loan is interest free. The funding intended to support current service levels at BART and the SF Muni system until a more permanent funding source can be established.

Existing law creates the Metropolitan Transportation Commission as a local area planning agency for the 9-county San Francisco Bay. Legislation is pending to establish the Transportation Revenue Measure District with jurisdiction extending throughout the boundaries of the Counties of Alameda and Contra Costa and the City and County of San Francisco.

The legislation would authorize a retail transactions and use tax applicable to the entire district to be imposed by the board of the district or by a qualified voter initiative for a duration of 10 to 15 years, inclusive, and generally in an amount of 0.5%, subject to voter approval at the November 3, 2026, statewide general election.

In Massachusetts, the budget authorizes $470 million for the Massachusetts Bay Transportation Authority in fiscal 2026. The MBTA will also receive some $548 million from fiscal 2024’s Fair Share revenue. That is a “millionaire’s tax”, an additional tax imposed on those with incomes over $1 million. Those funds were applied to fund a portion of the T’s budget gap. In June, the agency’s board of directors approved a $3.24 billion budget for the 2026 fiscal year, narrowing its deficit from $307 million in 2025 to a projected $168 million in 2026.

In Illinois, the legislature was not able to solve the riddle of funding the mass transit system serving greater Chicago. The issue of control is the primary impediment to resolving funding issues in the legislature.

SOVREIGN IMMUNITY TEST

The US Supreme Court agreed to hear two cases involving NJ Transit, which is being sued in Pennsylvania and New York state court after its buses allegedly hit people outside the borders of its home base of New Jersey. At their core, the two suits are basic personal injury suits. The SCOTUS gets involved because in 2019, it ruled 5-4 that one state cannot be sued in another state’s courts without the first state’s consent.

The ruling did not directly address the issue of which state entities get such immunity, leaving open a question about things like state hospitals, student loan servicers and public transit providers. The plaintiffs argued NJ Transit isn’t actually entitled to a state’s immunity, even though the transit agency was created by the state. NJ Transit said lawsuits should be brought against it in New Jersey state court because that’s where it is based.

NJ Transit, which considers itself an arm of state government, argues that it is protected from lawsuits in other states because of sovereign immunity. It won a sovereign immunity argument in the Pennsylvania Supreme Court. In another state the New York Court of Appeals, that state’s highest court, said immunity didn’t apply and allowed another man to sue NJ Transit after he said he was hit by a bus crossing an intersection in Manhattan.

NUCLEAR

TerraPower, the company founded by Bill Gates to develop new nuclear generation plants was notified that the Nuclear Regulatory Commission will follow the shorter time line for approvals backed by the Trump administration. The Commission intends to complete its environmental and safety review process by December 31 of this year.

TerraPower was the first ever to submit a construction permit application for a “commercial advanced reactor” in March 2024. The approval process was expected to extend into mid to late 2026. The $4 billion project, backed by $2 billion from the Department of Energy, was already under a streamlined review process through the NRC’s Advanced Reactor Demonstration Program. The NRC did admit that there may be “unresolved items” related to any “substantive” public comments to address after the December deadline.

The plant will be operational in 2030, according to TerraPower. The proposed reactor will use liquid sodium for cooling, which requires less water and provides more energy efficiency. The plant will also use a different type of radioactive fuel referred to as high-assay, low-enriched uranium (HALEU), which is more potent than traditional nuclear fuels. The NRC did admit that there may be “unresolved items” related to any “substantive” public comments to address after the December deadline.

ELECTRIC VEHICLES

Ford Motor said this week that a $3 billion plant it is building in Marshall Mich., to produce batteries for electric vehicles will still qualify for federal tax credits. Some last minute language in the BBB eliminated language in earlier versions which would have excluded the project because it will use technology licensed from a Chinese company, Contemporary Amperex Technology Ltd., known as CATL. Ford has already begun hiring for the factory and expects to employ 1,700 people there.

The factory will produce batteries whose principal ingredients are lithium, iron and phosphate, referred to as LFP. Most of the electric cars produced in the United States use batteries made of lithium, nickel, cobalt and manganese, or NCM. LFP batteries are heavier than NCM batteries, but substantially less expensive and less likely to catch on fire.

Nissan announced a delay in the launch of two new electric crossovers scheduled to be built at its Canton manufacturing plant in Mississippi. Nissan cited a recent slowdown in electric vehicle demand in the U.S. as a key reason for the postponement. The company is now targeting November 2028 for the Nissan crossover and March 2029 for the Infiniti version. The Canton facility, which has been operational since 2003, currently builds gasoline-powered vehicles but is slated to be a major hub for Nissan’s U.S. EV production.

Panasonic Holdings will postpone its plan to bring its new U.S. electric vehicle battery plant to full capacity by March 2027 as Tesla, its main customer, is experiencing sluggish sales. The Kansas plant, Panasonic’s second large-scale battery plant in the United States after one in Nevada, is scheduled to start mass production soon.

SMALL COLLEGE PRESSURES CONTINUE

Allegheny College, founded in 1815, is one of the nation’s oldest private liberal arts colleges and is located in western Pennsylvania. The college has several unique programmatic characteristics, including a senior project and a requirement for students to declare a minor from a different division of knowledge than their intended major. Moody’s has downgraded Allegheny College’s (PA) issuer and revenue bond ratings to Ba1 from Baa3.

The downgrade of the issuer rating to Ba1 is driven by persistent operating deficits. The rating reflects the college’s difficult student market and the hurdles of a highly competitive landscape and unfavorable demographics. Financial operations remain unbalanced, and student demand remains strained. poses further a with suppressed pricing power. While first-year enrollment in Fall 2025 is expected to rise, total FTE will decline. Failure to improve operating performance and meet fall 2025 enrollment targets could lead to credit pressure.

Moody’s has affirmed the Caa1 issuer rating and revenue bond rating of Hartwick College (NY). Hartwick College is a small, tuition-dependent private liberal arts and sciences college with fall 2024 enrollment of 1,070 full-time equivalent students and fiscal 2024 operating revenue of $43.5 million. The affirmation of the Caa1 issuer rating reflects the college’s structurally imbalanced financial operations, challenging student market conditions and very thin liquidity profile.

Sizable operating deficits over a multi-year period have created a reliance on elevated endowment distributions to support operations.

Muni Credit News July 7, 2025

Joseph Krist

Publisher

BIG BUT NOT SO BEAUTIFUL

The Big Beautiful Bill has stumbled across the finish line and as far as municipal credit sectors are concerned, two stand out especially. The first is higher education which was already facing demographic headwinds. Now a combination of culture war politics and immigration law are combining to result in some serious hits to revenues. The sector really under the gun will be healthcare. The expected loss of medical insurance by some 12 million people is incredibly negative. Many of those were enrolled under the ACA in time to receive care during the pandemic.

Then there is the issue of Medicaid provider taxes. These taxes the state levies on various health care providers, such as hospitals, nursing homes, managed care organizations and even ambulances. Cutting the rate of the tax is good, right? These taxes are considered to be a contribution to a state’s total spending on Medicaid. The federal government matches state spending at a rate between 50% and 80%, with no upper limit, higher provider taxes can mean higher state spending, which results in a higher federal contribution. That money can then ultimately go back to providers in the form of increased Medicaid payment rates.

By cutting the rate of the tax, the Federal government effectively makes a smaller payout to the state. That means that Medicaid reimbursement rates will decline while now uninsured patient numbers will likely increase. The math simply does not work if you want to strengthen balance sheets and liquidity. The rules date back to the Reagan administration. States have been taxing health care providers since the 1980’s to pay for the non-federal portion of Medicaid programs. Congress restricted the use of these taxes in 1991, establishing rules still in place today for how states implement them.

The must apply equally to all providers equally within a specific class, such as hospitals or nursing homes. States also must not directly or indirectly guarantee that the money will go back to providers — a concept referred to as “holding harmless.” However, the federal government currently exempts states from the hold harmless requirement on taxes up to 6% of revenues from treating patients. That limit is called the “safe harbor” limit and 38 states have provider taxes higher than 5.5%. Georgia is the only state with provider taxes below 3.5%, and Alaska is the only state that has no provider taxes.

The other component of the healthcare funding issue is the role of the industry as a major employer. Healthcare writ large is the largest source of employment in the U.S. going from 9 percent of the total workforce in 2000 to 13 percent today. In 38 states, the industry is now the biggest employer. In big cities, healthcare is a major entry level job provider to immigrants and non-college graduates. In rural areas, hospitals and physician practices are often the largest employers.

GRAIN BELT EXPRESS

The Grain Belt Express would carry electricity produced by wind farms in Kansas across Missouri and Illinois all the way to Indiana. The Missouri attorney general opened an investigation into Grain Belt Express and requested that the state’s Public Service Commission reconsider its approval. The AG claims that developers of the transmission line fraudulently inflated the number of jobs it would create, overstated cost savings to consumers, and misled landowners. He said his intention was “ultimately killing this project.”

The Biden administration in November offered a $4.9 billion conditional loan guarantee to help finance the project. And Invenergy awarded $1.7 billion in contracts to construction firms, saying work would begin next year.

CALIFORNIA

The California Environmental Quality Act, or CEQA, requires government agencies to review and disclose the environmental impact of any public project, including new housing developments. It is often cited as a significant contributor to the State’s housing shortage. Now several factors have come together to drive the legislature to approve the first major reform of CEQA after some four decades of its impact. The Los Angeles fires were just a final straw that turned CEQA into an obstruction to development.

This time, the Governor tied his signing the budget to the approval of the legislation required to relax CEQA rules. Those bills reduce the number of documents that projects must provide for their environmental reviews; eliminates the reviews entirely when cities rezone neighborhoods to meet their state-mandated housing goals, as well as for building farmworker housing, sewer systems in disadvantaged communities, broadband internet, public parks and trails, rural health clinics, food banks, advanced manufacturing facilities, day care centers and stations for the high-speed rail project.

ROAD USAGE FEES

The Hawai‘i Department of Transportation implemented its Hawaiʻi Road Usage on July 1. On the next registration renewal received after July 1, eligible EV owners will have the option to pay a state per-mile road usage charge (RUC) of $8 per 1,000 miles, capped at $50, or a state flat annual state RUC of $50. Both options replace the state’s current $50 EV registration surcharge. By 2028, the state per-mile RUC will become mandatory for EVs, and by 2033, the program is expected to expand to all light-duty vehicles.

NEWARK AIRPORT

Air traffic control problems that plagued Newark Liberty Airport were blamed for a 20% reduction in passenger volume this May than in May 2024. The reduction at Newark drove down the overall volume number at the three metro airports handled by the Port Authority. “May passenger volume at the airports overall was 7% below May 2024 which was driven by a sharp monthly decline at Newark Airport”.

The Federal Aviation Administration (FAA) ordered reduction in flights at the airport in May. The FAA mandated flight reduction brought the total to 56 flights an hour until a scheduled major runway repaving was completed. John F. Kennedy airport “broke a record set last year” for the busiest May on record at 5.54 million passengers, the PANY/NJ said. JFK topped the 2024 number by 1%. Volume at LaGuardia airport was “extremely strong” but slightly below the 3.01 million record set in May 2024.. May 2025 was the third busiest May on record at the airport.

CHICAGO PUBLIC SCHOOLS

Interim CPS CEO Macqueline King adjusted the district’s estimated deficit last week to $734 million, $200 million more than it was under her predecessor. CPS announced it was laying off 161 employees, including 87 crossing guards, and cutting 209 open positions. CPS enrollment has dropped from 402,000 in 2010 to about 324,000 today in 634 schools. About 150 of those schools are half-empty and 47 operate at less than one-third capacity. A current CPS’ closure moratorium lifts in January 2027.

Chicago Public Schools’ budget for the 2025-26 school year, normally released in June, is delayed until at least late July. The district’s new fiscal year starts on July 1 and schools received their budgets for the coming school year in May, based on the assumption that the district would have just a $229 million deficit to close. It was assumed the school district would receive an additional $300 million in new revenue that did not materialize from the state and has not yet come from the city. Those projections also assume that the district will not reimburse the City $175 million to fund part of a City pension payment that covers some school staff.

Muni Credit News June 30, 2025

Joseph Krist

Publisher

NEW YORK CITY

The results of this week’s mayoral primary in New York have the press hyperventilating over the potential for the City to have a socialist mayor. In the midst of all of the tumult, it is important to emphasize some of the security features supporting the City’s general obligation debt. Those features were adopted in the wake of the City’s 1975 financial crisis.

Primary among them is the procedure for securing the property tax revenues supporting general obligation bonds. Property tax revenues are accumulated monthly and can only be applied to general obligation debt service before any other use. Collections of those taxes are annually well in excess of the City’s annual general obligation debt service requirements.

The City could also lose control of its financial operations in the event that balanced budgets are not adopted. Should the City budget for a deficit of $100 million or more, a control board can be established by the State to oversee the City’s budget. There are powerful incentives for the City to keep its fiscal house in order and for a Mayor to keep control.

This will be one of the weirdest elections for Mayor the City has seen for some time. Currently, there are four candidates for the November ballot including the current mayor Eric Adams. How serious all of the candidates are is subject to debate. The next four months provides an opportunity for candidates like the socialist candidate to explain how they would implement policies consistent with their politics.

At the same time, the tumult around the election could create a buying opportunity. The situation is reminiscent of the first bond issue under the Dinkins administration. Many of the same concerns expressed then are being expressed now. When the City sold bonds in February, 1990 those concerns generated an 8% coupon on thirty year general obligations callable in ten years. The resulting 8% plus annual return over ten years from those bonds until they were refunded looked good in one’s portfolio.

ELECTRIC VEHICLES

Ford Motor said that it was committed to completing and opening a battery plant in Michigan, even if Congress and President Trump make the project ineligible for tax incentives. The $3 billion plant, in Marshall, Mich., 100 miles west of Detroit, is planned to use battery and manufacturing technology that Ford licensed from a Chinese company, Contemporary Amperex Technology Ltd., known as CATL. The announcement comes as Congress considers a budget plan which would eliminate or severely slash tax incentives of electric vehicle production.

If the credits survive, they could offset about a quarter of the cost of the plant. The House version of the Republican bill would eliminate credits for plants that were built with materials or technology from China, Iran, North Korea or Russia. In Georgia, U.S. battery plants use technology from suppliers based in South Korea or Japan, which are not targeted by the bill. The Michigan plant is scheduled to start production next year and is supposed to create 1,700 jobs. The plant has already been affected new tariffs that Mr. Trump has imposed. The manufacturing machinery for the plant is in transit from China and will be subject to higher tariffs.

This week, LG Energy Solution, a division of the major Korean battery manufacturer, is now producing battery cells for grid-scale energy storage at a site in Holland, Michigan. The company spent $1.4 billion to expand the factory, which previously made electric vehicle batteries. Lithium iron phosphate chemistry (LFP), offers fire-safety benefits, durability, and lower costs compared to the typical electric vehicle chemistries.

Until now, American battery customers had to rely on Chinese suppliers.. LG’s facility appears to be the largest giga-scale LFP production in the U.S. Japan’s AESC recently launched LFP production at its factory in Smyrna, Tennessee. The company initially intended to install these manufacturing lines in Arizona, but by shifting the LFP equipment to the space in Holland, LG could open commercial production a full year earlier than originally planned. The Holland manufacturing space covers the area of 42 football fields, and will employ 1,700 people when fully staffed.

NUCLEAR REVIVAL

Governor Kathy Hochul announced that New York is planning to build a nuclear power plant which would produce half as much power as the Indian Point complex north of New York City that was shut down four years ago. Since then, that power has been replaced largely by natural gas as New York no longer has operating coal generators. New York derives about one-fifth of its electricity from three nuclear plants operated by Constellation Energy on Lake Ontario.

The plan articulated by the Governor is short on basic details – cost, schedule, location. The New York Power Authority will manage the project but the expectation is that it will be built through private entities. In January, Constellation and the New York State Research and Development Authority sought federal funding for their effort to obtain permits for one or more advanced reactors at the Nine Mile Point Clean Energy Center in Oswego.

The U.S. Supreme Court, by a 6-3 vote, reversed a federal appeals court ruling that invalidated the license granted by the Nuclear Regulatory Commission to a private company for the facility in southwest Texas. The licenses would allow the companies to operate the facilities for 40 years, with the possibility of a 40-year renewal. It is estimated that some 100,000 tons of spent fuel, some of it dating from the 1980s, has been held at current and former nuclear plant sites nationwide and growing by more than 2,000 tons a year.

The NRC granted the Texas license to Interim Storage Partners, based in Andrews, Texas, for a facility that could take up to 5,500 tons (5,000 metric tons) of spent nuclear fuel rods from power plants and 231 million tons (210 million metric tons) of other radioactive waste. The facility would be built next to an existing dump site in Andrews County for low-level waste such as protective clothing and other material that has been exposed to radioactivity.

STADIUM DEALS

It has been a busy Spring in the world of stadium deals as governments use the budget process to create financial support for professional sports stadiums. The legislation comes as two Major League Baseball teams play in minor league stadiums. One, the Tampa Bay Rays, may be sold to interests which may or may not wish to keep the team in greater Tampa Bay. In the interim, repairs to the existing stadium in St. Petersburg are underway with the hope of being ready in Spring 2026. The other, the A’s, broke ground on a new $1.75 billion stadium in Las Vegas, expected to be completed in time for Opening Day 2028.

The Arizona Diamondbacks (MLB) are in position to secure up to $500 million with extensions to existing state taxes to help fund renovations to Chase Field.

The Arizona legislature voted to approve the recapture of sales taxes from the stadium and other adjacent buildings over the next 30 years to update infrastructure at the retractable roof facility which has been home to the D-backs since 1998 and is owned by the Maricopa County Stadium District. The Diamondbacks say they will also contribute $250 million of the team’s money to help fund renovations.

Missouri lawmakers enacted legislation that includes hundreds of millions of dollars of financial aid intended to persuade the Chiefs and Royals to remain in the state. Lawmakers in Kansas voted to authorize bonds for up to 70% of the cost of new stadiums in their state. The Royals have bought a mortgage for property in Kansas. The offer from Kansas is scheduled to expire June 30. The Chiefs and Royals currently play at the Truman Sports Complex where Arrowhead Stadium and Kauffman Stadium share parking facilities. Their leases with Jackson County, Missouri, expire in January 2031.

The Royals property acquisition comes in the wake of Jackson County voters’ defeat of a sales tax extension that would have helped finance an $800 million renovation of Arrowhead Stadium and a $2 billion ballpark district for the Royals in downtown Kansas City. That opposition led to the inclusion of items not related to stadium finance in the legislation. When Kansas Gov. Mike Kehoe called lawmakers back into session earlier this month to consider stadium legislation, he agreed to allow an amendment requiring most counties to put a hard cap on increases in property tax bills.

In 75 counties, tax bills would not increase more than 5% per year from a base amount, or the rate of inflation, whichever is less. In 22 others, no increase in the basic bill would be allowed. That has raised questions as to the constitutionality of the plan as the Missouri Constitution requires that property taxes be “uniform upon the same class or subclass of subjects.” That may require reconsidering of the plan in the legislature this fall.

Then there is the situation in Cleveland. When Cleveland was awarded a franchise to be reestablished as the Browns, state legislation was enacted which included provisions limiting where the franchise could relocate in the future out of its stadium. The Art Modell Law (he moved the original Browns to Baltimore) keeps the Browns from moving out of downtown Cleveland or so it was thought. The Browns are in the midst of purchasing a suburban Cleveland site for an enclosed stadium. There is pending litigation over exactly what the limits were under the law. Now, the state budget includes provisions which establish the law allows Ohio pro sports teams who play in tax-supported facilities to move within Ohio when their leases expire.

And oh yes, the legislation included $600 million in funding from the state for the Browns new stadium by creating a new Sports and Culture Facility Fund through the escheatment of $1.7 billion from the state’s unclaimed property fund, which has grown to $4.8 billion in size. The plan leaves an additional $1.1 billion for future stadium construction asks from Ohio’s other pro sports franchises.

The Hamilton County commissioners voted to approve the framework of a new lease keeping the Bengals downtown in Cincinnati through at least 2036. The new agreement calls for a $470 million renovation of Paycor Stadium, of which the county will contribute $350 million and the Bengals/NFL will contribute $120 million, as well as agreeing to begin paying rent for the first time. They will pay $1 million over the next three years and then $2 million each year of the final eight years of the agreement, as well as for any extension years. The improvements are expected to take two to three years and currently involve no state funding.

Muni Credit News June 23, 2025

Joseph Krist

Publisher

PORT OF LOS ANGELES

The first tangible evidence of the impact of tariffs on international trade comes in the form of operating data from America’s busiest port. The Port of Los Angeles processed 716,619 Twenty-Foot Equivalent Units (TEUs) in May, 5% less than last year. After 10 straight months of year-over-year growth, overall cargo volume slowed due to the impact of tariffs on both imports and exports. Imports dropped 19% compared to April. May 2025 loaded imports came in at 355,950 TEUs, 9% less than the previous year. Loaded exports landed at 120,196 TEUs, a 5% drop from 2024. The Port processed 240,472 empty container units, 2% more than last year. After five months in 2025, the Port of Los Angeles has handled 4,063,472 TEUs, 4% more than the same period in 2024.

The Los Angeles Harbor Commission approved a 2025/26 fiscal year (FY) budget of $2.7 billion for the Port of Los Angeles, a 3.1% or $82.5 million increase over the previous fiscal year’s adopted budget. The proposed budget for FY 2025/26 anticipates cargo volumes of 8.2 million TEUs, a decrease of approximately 9.9% over the previous fiscal year’s adopted budget. In the FY 2025/26 budget, operating revenues are forecast at $657.6 million. Approximately $470.3 million of those revenues are expected to be generated by shipping services at the Port. Operating expenses are estimated at $427.1 million.

The Port of Long Beach experienced a significant 8.2% decline in cargo throughput in May, processing 639,160 TEUs as tariffs continue to impact global trade flows. At Long Beach, imports fell 13.4% to 299,116 TEUs, while exports decreased 18.6% to 82,149 TEUs. The only positive movement came from unused containers being sent back to exporting countries, which saw a modest 3.2% increase to 257,895 TEUs.

Following the Trump administration’s implementation of a 145% tariff on Chinese goods in April, many retailers had suspended or canceled orders. However, activity has resumed after tariffs were reduced to 30% with a 90-day pause extending until August 12. Similar temporary pauses on reciprocal tariffs with other nations will last until July 9. Looking ahead, the National Retail Federation’s Global Port Tracker forecasts a mixed outlook for U.S. containerized imports. While June through August should see increased activity as importers take advantage of the tariff pause, volumes are expected to decline sharply in the latter part of 2025. September imports are projected to fall 21.8% year-over-year, with October showing a 19.8% decrease.

CARBON CAPTURE

The Iowa House approved a request to call a special session to override Governor Kim Reynolds veto of eminent domain legislation. Each house needs a two thirds majority. It seems as though the required two thirds of the Senate may not be achieved.

We have been highlighting the many targets of cutbacks announced by the U.S. Department of Energy in May. The agency cancelled some $3.7 billion of grants to a variety of public and private entities. The latest example is on in Wyoming. There a $49 million grant was made under the Biden administration for a “large-scale” carbon capture pilot project at the Dry Fork Station coal-fired power plant north of Gillette, WY.

It’s not clear whether there is support for private funding for the project. In 2020, the state passed legislation which was designed around the idea of keeping coal-burning power plants open by retrofitting them with carbon capture technologies. Electric utilities Black Hills Energy and Rocky Mountain Power, the only two Wyoming coal plant operators subject to the mandate, have indicated it could cost between $500 million and $1 billion to retrofit just one of several coal units subject to the state law.

They unsurprisingly support recent efforts to repeal the carbon capture mandates.

FLORIDA BUDGET

After one of the more politically contentious budget sessions in many years, the Florida legislature passed a FY 2026 budget totaling $115.1 billion. That is some $500 million less than the governor’s proposed budget, and $3.5 billion less than last year’s adjusted total. A long debate over tax cuts was at the core of the squabbling which forced the legislature into a special session. All of this conducted in front of a backdrop of potential scandal and a looming election for Governor in 2026.

The debate before the special session was mainly over whether to cut property taxes or sales taxes. The approved budget does neither. Instead, it eliminates the state’s business rent tax. The budget also includes tax cuts for several specific interests including casinos, airlines and NASCAR.

The legislature advanced a proposed constitutional amendment that would set aside $750 million a year — or an amount equal to up to 25% of the state’s general revenue, whichever is less — into a reserve fund that lawmakers could only use for emergencies. The measure has to be approved by 60% of Florida voters to be implemented.

On the spending side, lawmakers set aside $4 billion for scholarships for private and religious education, two years after the Legislature expanded the state’s voucher program to make all K-12 students eligible, regardless of family income. Some 2,200 vacant positions are effectively eliminated. At the same time, state workers will receive an across-the-board 2% raise, while state law enforcement officers and firefighters will get a 10% total raise, and a 15% raise if they’ve been on the job for at least five years.

MTA UPGRADE

It may often appear to be all doom and gloom for New York’s MTA but that’s not true when it comes to its debt ratings. Moody’s has upgraded to A2 from A3 the rating on the Metropolitan Transportation Authority, NY’s (MTA) $17.1 billion of outstanding Transportation Revenue Bond (TRB), and revised the outlook to stable from positive. Those are the bonds effectively paid from the farebox. The upgrade comes amidst MTA’s ongoing battles with the federal government over operating and capital support and the effort to halt congestion pricing.

That did force the State legislature to confront the need to fund the ongoing capital needs of the Authority. The results were positive and led to an upgrade. According to Moody’s “The upgrade of MTA’s TRB rating reflects increased political and financial support from New York State (Aa1 stable) and New York City (Aa2 stable) for the system’s substantial operating and capital needs.

The state’s recent payroll mobility tax (PMT) increase for MTA filled a significant gap in the $68.4 billion 2025-2029 capital program which will accelerate asset investment, protect service quality and support future revenue growth. The new PMT increment will generate $1.4 billion annually, is dedicated to capital projects and will allow MTA to borrow $23 billion, in addition to $10 billion supported by the operating budget, with only moderate growth in leverage metrics and fixed costs.”

CBO ON IMMIGRATION

The number of people entering the United States increased sharply starting in 2021 and peaked in 2023 before slowing in 2024. All told, the surge in immigration that started in 2021 added an estimated 4.4 million people to the U.S. resident population in 2023. The surge continued beyond 2023, but it slowed starting in June 2024, when an executive order suspended the entry of most noncitizens at the southern border, and has slowed further in 2025.

This week the Congressional Budget Office released estimates of how the surge in immigration that began in 2021 affected state and local budgets in 2023. The surge led to a direct increase in revenues of $10.1 billion, primarily from sales taxes, and a direct increase in spending of $19.3 billion, chiefly for public elementary and secondary education, shelter and related services, and border security. The result was a direct net cost of $9.2 billion in 2023, amounting to 0.3 percent of state and local spending (net of federal grants-in-aid).

In addition to estimating the direct effects of the surge, CBO calculated an alternative measure that includes the potential broader or longer-term effects and costs that were borne without adding to spending—such as crowding in public schools and public transportation systems. By either measure, the surge imposed a net cost. By that measure, the surge in immigration had the potential to increase revenues by $18.8 billion and spending by $28.6 billion, resulting in a potential net cost to state and local governments of $9.8 billion in 2023.

FLOOD INSURANCE REALITIES

The majority of flood insurance policies are provided by the federal government, through an arm of FEMA called the National Flood Insurance Program, or NFIP. Only 6% of Americans hold it. The experience in the wake of Hurricane Helene has drawn attention again to the need for and cost of flood insurance. Across Western North Carolina counties, only about 6,500 total policies from NFIP were in place.

The NFIP can cover up to $250,000 in home structure losses and $100,000 in home contents losses. Usually, people only have a policy if their mortgage requires it. That’s often because that property has received federal assistance for flood-related damage before. But 43,700 paid losses were associated with Helene, accumulating to $1.8 million total paid out by NFIP. The average paid loss came in at $40,709.

The Heritage Foundation’s Project 2025 calls for the dismantling of the NFIP and advocates for flood insurance to go private. The problem is that the private insurance industry has essentially stopped covering flood risk. During the first Trump administration, he planned a new system which changes the way the NFIP calculated rates, bringing models up to date. This new system would have increased rates, so Trump abandoned it during his bid for reelection. The Biden administration implemented the new rating system, raising flood insurance rates for 75% of flood insurance holders.

IS THERE A DOCTOR IN THE HOUSE?

On May 27, the Trump administration suspended new interview appointments for foreign nationals applying for J-1 visas. The visas, for participants in cultural or educational exchange programs, are used by most medical residents arriving from overseas. They did this just in time to put enormous pressure on hospitals to recruit doctors to begin work on July 1, the traditional staring date for new residents.

One in five U.S. physicians was born and educated overseas, according to the Association of American Medical Colleges. New doctors from other countries account for one in six medical residents and specializing fellows at U.S. teaching hospitals. Many of the 6,653 noncitizen doctors accepted for residency positions in the United States this year this year had already secured visa appointments before May 27. Those from banned countries who are already in the country are able to remain.

Hospitals and clinics in rural areas of the country already rely heavily on international graduates. This year, there were about 40,000 residency positions offered through the national match system, but only 28,000 graduates of U.S. medical schools. It was always a bit risky to go to an emergency room on the Fourth of July weekend given the brand new status of the residents. Now there may not even be enough of them.

NUCLEAR

The Supreme Court rejected Texas’s bid to overrule federal approval of a nuclear waste storage facility. In a 6-3 decision, the court upheld the Nuclear Regulatory Commission’s decision to issue a license to a company that wanted to store nuclear waste off site from a power plant. The opinion said that Texas, as well as private company Fasken Land and Minerals, did not have the right to sue over the license.

“Under the Hobbs Act, only an aggrieved ‘party’ may obtain judicial review of a Commission licensing decision,”. “Texas and Fasken are not license applicants, and they did not successfully intervene in the licensing proceeding. So, neither was a party eligible to obtain judicial review.” The case in question concerns a license issued in 2021 to Interim Storage Partners (ISP) that would have allowed it to store nuclear waste for 40 years in West Texas.

The question in the underlying case was about whether the Nuclear Regulatory Commission should be allowed to license private off-site nuclear waste storage sites. That question itself was not at issue in the case.