Trends and Changes in the Municipal Bond Market as They Relate to Financing State and Local Public Infrastructure

摘要

Changes in the structure of the municipal bond market over the past decade have contributed to increased borrowing costs for State and local governments. The key structural changes include--the sharp increase in the volume of municipal bonds sold since 1979 and--a shift in the type of investor in municipal bonds from institutional buyers to household buyers. These increased borrowing costs have contributed to reduced investment in public infrastructure. GAO found that $3.9 billion in planned bond sales were cancelled or postponed in 1982 because of changing interest rates. GAO estimates that of this total $1.9 billion in delayed or terminated financings adversely affected the progress of infrastructure projects. These cancellations and postponements represented about 5 percent of issues actually marketed to finance public capital facilities.