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[quote=Anonymous][quote=Anonymous][quote=Anonymous]It passed the house of delegates and now goes to the state senate. I hope Louise can stop it over there.

The key phrase in the financing is :”the full faith and credit”. This is a term of art in public finance which means Youngkin wants to pledge the full faith and credit of Virginia towards payment of the bonds (assuming general obligation bonds). This is VERY important because that essentially means that Virginia is promising to use whatever money it has to pay the debt service on the bonds to bond holders and cannot simply default or refuse to pay should the proposed revenue stream (ticket sales, sales tax, property tax, etc) not raise enough at any time to pay the debt service.

Furthermore, this means Virginia would literally need to go bankrupt as an entire state before those bonds could default. This also means every single Virginia tax payer’s money is on the line, no matter where you live in Virginia. The federal government put its full faith and credit behind Fannie Mae issued bonds in the 2000s, and look how that turned out. It’s the main reason the fed had to bail out the banks.

This is serious, and we have a bunch of elected clowns in both parties who don’t seem to really understand the niche of public finance. [/quote]

Virginia could make monumental indemnifying Virginia a condition of the bonds. They'd still be backed by Virginia, but Virginia would have the right to go after monumental in the event of a short fall. All states should do that when teams offer up ridiculous economic analysis to support new stadiums [/quote]

So then Virginia would own two lackluster franchises that no one from DC or MD would ever attend. Whoopie![/quote]

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