Southwest states notch notable revenue gains in fiscal 2022

Fiscal 2022 brought robust revenue growth for Texas and other Southwest states, leading to record budget balances and calls for tax cuts. State coffers across the United States benefited as increased prices for goods and services boosted sales tax collections, while rising wages and employment lifted income tax revenue. Preliminary data from 45 states showed total tax revenue increased 8.1% in fiscal 2022, which ended June 30 for 46 states, compared to fiscal 2021, according to Lucy Dadayan, senior research associate at the Urban Institute.?

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If you missed our statistics supplement it is live on our website and we feature a story on the decline in underwriting spreads.

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Congressional leaders renegotiating the Federal Aviation Authority's reauthorization ahead of its expiration date in September 2023 should consider removing the passenger facility charge cap to help airports become more flexible to changing behavior and bring down individual costs on consumers. That's according to a policy brief by libertarian think tank Reason Foundation, which advocates stronger airport reliance on PFCs, a congressionally authorized, local airport user fee. This is opposed to more reliance on the Airport Improvement Program, a federal grant program funded through aviation taxes that comes with many more strings attached on how airports spend the money.

And if you missed any of our ESG Week coverage, make sure to check our ESG special section which has all the articles, the podcast and a taped version of the Leaders event.

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Fitch Ratings raised Wayne County, Michigan's rating by two notches, lifting it into the single-A category as a result of its steady fiscal recovery from past distress with eight years of operating surpluses now under its belt. The upgrade marks the third double-notch boost for the county this year after shedding its junk status in 2018 as a restructuring, helped along by the state, allowed the county avoid bankruptcy with its general obligation ratings now all in single-A territory. The Fitch upgrade to A from BBB-plus covers the county's issuer rating, $13.1 million of limited tax GOs, and $21.3 million of stadium-related bonds sold through the Detroit/Wayne County Stadium Authority. The outlook is stable.

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In this commentary, Kevin Bain writes: The rise of ESG investing exemplifies supply meeting demand in the free market, but some conservative leaders seem to have forgotten their Econ 101. Instead of recognizing growth in ESG as an apolitical outcome of free markets, they are attempting to intervene through partisan rhetoric without any rational basis. Their proposals would raise costs for taxpayers while diverting investment from good causes — a double whammy.

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Municipals were little changed to open the first full week of September ahead of a growing new-issue calendar, while U.S. Treasuries were weaker, and equities ended in the black. Even after investors received an infusion of $18 billion of matured and called bond proceeds on Sept. 1, muni prices have continued to weaken, said CreditSights strategists Pat Luby and John Ceffalio. However, they noted, performance improved over the prior week. "The ICE Municipal Bond Index closed down for the sixth week in a row, posting a total return of -0.23%," they said. "For the week ended Friday, the Index returned -0.96%."