Don't throw munis under the bus.

• Author: Esser, Jeffrey L.
• Position: Perspectives - Municipal securities management - Editorial

A recent Wall Street Journal editorial, "The Muni Bond Lobby" opened with this paragraph: "What happens If states and cities with rising pension obligations have trouble finding investors for their bonds? The local politicos needn't worry because Sen. Charles Schumer (D.,N.Y.) is leaning on federal regulators to ease their fiscal pain."

Fortunately, this scenario isn't a real issue. In my October 6, 2014, Wall Street Journal letter to the editor, I pointed out the following.

Accurate data from the Center for State and Local Government Excellence demonstrate that the retirement plans that cover 85 percent of assets and retirement system members are funded at 77 percent. Thanks to the reforms made to these plans in recent years, they now hold some $3.72 trillion in assets (16 times their annual payout). Highly publicized instances of municipal bankruptcies are individualized, not systemic. Over the past five years, when governments faced severe challenges, only six-tenths of 1 percent of all governments sought bankruptcy protection.

In the Wall Street Journal article, regulators are quoted saying "financial data from municipal issuers can be inconsistent and vary in timing." It is worth noting that governments follow the uniform financial reporting guidance of the Governmental Accounting Standards Board, and issuers of...