S&P backs down from ESG scores critics called 'confusing'

S&P Global Ratings' announcement that it will not release new or updated environmental, social, and governance credit indicators in public finance comes amid confusion over their impact on bond ratings, as well as an anti-ESG backlash that produced a deluge of legislation this year. The rating agency called its decision independent and analytical, noting its reports will continue to address ESG credit factors. Justin Marlowe, a research professor at the University of Chicago's Harris School of Public Policy, said S&P's decision was rational given there is no clear sense of how to think about the materiality of ESG risks in public finance.??

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After more than 35 years in the public finance industry, the last 15 at Fitch Ratings, Ann Flynn has retired from the rating agency and the board of the Northeast Women in Public Finance. Flynn’s seat on the NEWPF board is now held by Arlene Bohner, Fitch’s head of U.S. public finance, whom Flynn hired. Bohner said she hopes to carry on Flynn’s commitment to the organization’s programming, mentorship program and networking opportunities.

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California Gov. Gavin Newsom's newest policy thrust to reduce homelessness by improving mental health services — including a proposed $4.5 billion bond to add psychiatric beds — is likely to get some pushback from county governments. The Legislative Analyst's Office estimates that Newsom's overhaul of the state's behavioral and mental health system is likely to take nearly $720 million away from services provided by county governments annually. At question is revenue from the Mental Health Services Act, the so-called “millionaire’s” income tax surcharge.

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New York City's economy has proven to be more resilient than previously projected, while a surplus from the last fiscal year combined with savings from a program to cut budget gaps, helped keep the books balanced, according to an analysis released last week by city comptroller Brad Lander.

Check out our most recent Rising Stars and the second class of Muni Hall of Famers.

Municipals were lightly traded and mostly steady Monday while U.S. Treasuries saw losses across the curve. Triple-A yield curves saw a mix of small bumps and cuts by a basis point or two, depending on the curve, while Treasuries saw losses of one to seven basis points with the larger cuts on the two- and three-year. Municipal to UST ratios have richened further on the short end as a result.

Registration is open for The Bond Buyer California Public Finance conference Oct. 18-20 in San Francisco.

Annual tax revenue collection in Massachusetts fell by 4.7% in fiscal year 2023, the State Department of Revenue announced in its yearly report. The state collected $39.2 billion in fiscal 2023, $1.94 billion less than in fiscal 2022 and 1.5% below the state's set benchmark, the report said.

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