Local New Jersey governments could experience a double whammy. Not only will the currently passed national tax reforms in the form of the Tax Cuts and Jobs Act of 2017 potentially diminish New Jersey’s tax base of wealthy residents, but a critical arbitration cap that kept municipal costs in line with the government’s revenue is now also gone. Moody’s, for its part, doesn’t like how this situation is playing out for municipal bondholders. JPMorgan’s Michael Cembalest had previously said the state’s bond problem is “not mathematically solvable” graphing the following scary chart: [dalio] Losing arbitration cap is another negative for the…
New Jersey’s Fiscal Situation Just Got Even Worse
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.