Municipal bond basics.

• Author: Kinney, Anne Spray
• Position: Editorial

The municipal securities market is highly diverse and, to a large degree, not well understood by the public. This issue of Government Finance Review provides in-depth articles about municipal debt that will help finance officers who do not regularly issue bonds and manage outstanding debt better understand this extremely important area of public-sector financial management.

In "Best Practices Optimize Debt Management," Jonas Biery and Eric Johansen highlight the GFOA's recommended approaches for managing debt. Their article provides guidance for finance officers who must explain the rationale for debt financing to elected officials and taxpayers.

Many of the misunderstandings about municipal debt that have appeared in the press in recent years, especially about the overall safety of the market, can be attributed to the substantial diversity among municipal securities and their varying risks. In "Telling Myth from Reality in MuniLand," Robert Doty explains the types of municipal securities and credits, and the risks each one entails.

Congress periodically revisits the traditional exemption of state and local debt obligations from federal income tax. In "The Renewed Battle over Tax Exemption of Interest on State and Local Government Debt Obligations," James E. Spiotto argues that taxing municipal debt would adversely affect state...