A million here, a million there
Some years ago I had this post, which for entirely unrelated reasons has had a life of it's own on the internet I'll explain in a second. But a deep dive in some of the most esoteric of public finance issues (bond insurance) and the fad of variable rate bonds being used locally. See: About those SEA bonds (2008)
Now look at the news today covered by the Trib: Taxpayers on the hook for $1M more for Consol Energy Center lease.
So then and now.. variable interest rates bonds = bad and as is unsurprising the state is backing up the cost. But the bad is all so complex that it all sounds like it isn't a problem. The state's backing of the Consol arena's bonds is another whole story that has been blogged about here as well. I still believe that if you look at the state's covenants on the deal, the state really is on the hook for the arena bonds should they be at risk of not being paid. If so, why the need to pay for bond insurance? But the actual risk and legalities are lost in translation it seems.
Funny thing is that old blog post from 2008 may be one of the most read blog posts here ever, but not because the long tail cares much about the SEA bonds. In my rambling I reference an old study by investor Bill Ackman who made a fortune pointing out the problems with bond insurer MBIA. In the long tail of the Internet that report seems not to exist anywhere else and has been referenced by many as Ackman has taken on other companies since then. So the search engines of the world land here.