Private Activity Bonds Are Quarter of All Munis.

• Position: Municipal debt - Brief Article

State and local governments have issued $441.8 billion in tax-exempt private-activity bonds since the Internal Revenue Service imposed tight restrictions on the bonds in 1986. That figure represents about 26 percent of all municipal debt issued over the same period (1986-95). Approximately 40 percent of the new-money, long-term private-activity bonds issued were used to finance 501(c)(3) entities that are exempt from the state-by-state volume caps on private-activity bonds. The volume of tax-exempt private-activity bonds issued reached a high of...