DEBT MANAGEMENT.

• Position: Brief Article

Do Debt Policies Make a Difference in Finance Officers' Perceptions of the Importance of Debt Management Factors?

Simonsen, Bill; Robbins, Mark D.; and Kittredge, Bill

Public Budgeting and Finance, Spring 2001, pp. 87-102.

Despite a dramatic rise in debt issues over the past 10 years, formal debt policies are present in only about half of all local governments. Furthermore, many policies do not include factors considered salient to such policies. This article explores the content of local government debt policies based on survey results from U.S. cities and counties that have sold debt. According to the survey, current debt policies seem to be limited in scope. These policies appear to focus on the technical aspects of issuing debt, such as trying to obtain low interest rates. Broader issues, such as disclosure, impacts on low-income groups, and the appropriate use of RFPs, are of secondary importance and are often not included. Inclusion of various factors in debt policies has a great influence on their perceived importance by public managers. According to the survey, more than half of the respondents rated all 20 factors surveyed as a 3, 4, or S (1 meaning "not at all...