Reply to Why does Montgomery County government still maintain a monopoly on alcohol distribution?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Revenue can be replaced and they had a massive windfall this year because they got voters to revoke the property tax cap. The real reason is that they prefer MCGEO to whatever union would represent private sector warehouse workers and drivers. [/quote]
I understand the problem in your lack of understanding is because you don’t understand how bonds work.[/quote]

They can retire that debt, refinance it, or a combination. [/quote]

Which which money?[/quote]

The county has a $6.3 billion operating budget this year, which was a $300 million increase over last year. The idea that bonds have bound us to ABS is nonsense, but I can see why an executive who likes the current arrangement (and MCGEO) would try to use debit issuance as a poison pill to try to kill reform. [/quote]
You really should know more about things before “contributing”. Because you’re just wrong. The bonds are issued with a commitment that the coupons are repaid with ABS revenue. This “security” provides confidence to investors and lowers boring costs. Because it’s part of the covenants, removing the underlying revenue will be an event of default because the investors bought a bond backed by ABS revenue with proceeds used for CIP and not a bond backed by general revenues. A bond backed only by general revenues would have been priced differently. The result of the default would mean that the county would be on the hook to immediately repay the principal plus any damages. People that buy such bonds could easily claim damages because they seek duration and predictability. The outcome of all of this unpredictable behavior would certainly be a downgrade of the county’s credit rating. [/quote]

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