Dueling Revenue Caps and Municipal Bond Yields: The Case of Houston, Texas

22 Pages Posted: 7 Jun 2010

See all articles by Earl D. Benson

Earl D. Benson

Western Washington University - Finance and Marketing Department

Barry R. Marks

University of Houston, Clear Lake - School of Business and Public Administration

Abstract

Two competing revenue cap proposals, one from a citizen's group and the other proposed by the mayor, were on the November 2004, election ballot of the City of Houston, Texas. Both propositions passed, yet the citizen's group had to sue to have their initiative enforced. This study examines the effect on Houston bond yields of the series of events (from June 2004 through March 2006) surrounding these dueling revenue cap propositions. The empirical findings suggest that the budget-related events can have a significant effect on yields demanded by investors in the secondary market for outstanding uninsured tax-exempt general obligation debt.

Suggested Citation

Benson, Earl D. and Marks, Barry R., Dueling Revenue Caps and Municipal Bond Yields: The Case of Houston, Texas. Public Budgeting & Finance, Vol. 30, Issue 2, pp. 112-133, Summer 2010. Available at SSRN: https://ssrn.com/abstract=1620654 or http://dx.doi.org/10.1111/j.1540-5850.2010.00959.x

Earl D. Benson (Contact Author)

Western Washington University - Finance and Marketing Department ( email )

FMDS Department MS 9077
Bellingham, WA 98225-9077
United States
360-650-3375 (Phone)
360-650-4844 (Fax)

Barry R. Marks

University of Houston, Clear Lake - School of Business and Public Administration ( email )

Houston, TX 77058
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
3
Abstract Views
289
PlumX Metrics