"Does GAAP Compliance Matter to Municipal Bond Investors?" Under Review.
Abstract: Small municipalities across the United States routinely prepare financial statements on a cash-basis rather than under the generally accepted accounting principles (GAAP) established by the Governmental Accounting Standards Board (GASB). In doing so they trade away visibility into their long-term financial condition for simpler, less costly reporting. Conventional wisdom holds that this information gap will narrow the pool of willing bond investors, reduce secondary market participation, and raise borrowing costs. But that claim is largely untested. Using general obligation bond issuances from Illinois municipalities from 2000 to 2024 linked to State Comptroller administrative data, I find that cash-basis issuers pay roughly three to five basis points more when they borrow, are significantly less likely to attract secondary market investors, and show declining bond market activity in the years after switching away from GAAP. A regression discontinuity at the state’s 800-person threshold for mandatory professional audit confirms that financial oversight increases investor participation. These findings are directly relevant to legislative proposals in several states to relax local GAAP reporting requirements, and suggest that the bond market costs of doing so are real and recurring.
"Why Local Government Treasury Management Matters" (with Jess Artis and Mark Funkhouser). Under Review.
Abstract: We examine treasury management practices among local governments, and how those practices associate with key financial management outcomes. We conducted a national survey of 128 treasury management professionals representing cities, counties, state agencies, higher education institutions, and school districts between February and July 2025. Using agglomerative hierarchical clustering methods, we categorize respondents by the rigor of their treasury practices, and then compare financial outcomes like revenue variance, liquidity metrics and borrowing costs across those clusters. Those results indicate that governments with more formalized treasury policies and disciplined planning practices achieve measurably better financial outcomes, including lower borrowing costs on general obligation bonds of one to fifteen basis points across rating categories. Results from four case studies reinforce those findings and illuminate the organizational dynamics that underpin effective treasury management, including how practitioners manage influence without formal authority and how fiscal constraints drive operational innovation. These findings offer new empirical evidence that effective treasury management is a strategic lever of effective financial management and long-term financial sustainability, not merely an administrative routine.
"Municipal Market Volatility: Measurement, Explanation, and Implications" (with Tom Doe and Sophie Lara). Under Review."
Abstract: Municipal bonds have a reputation as a stable, low-volatility asset class, but that reputation has been tested repeatedly over the past decade by episodes of sharp market dislocation. Using random forest modeling on more than a dozen data sources, we document what has driven this increase in volatility and what it means for issuers and investors. We find that three overlapping forces are responsible: a structural shift in the investor base toward exchange-traded funds and separately managed accounts that amplifies price movements during periods of stress; the growing transmission of Treasury market volatility into municipal prices; and investor sentiment and policy uncertainty that appear to amplify rather than independently drive volatility. These findings matter directly to issuers because elevated volatility raises borrowing costs, and to investors because the municipal market is increasingly sensitive to forces that have little to do with the credit quality of the underlying bonds.
Public Debt Management: Strategy and Evidence (forthcoming 2027). Cambridge University Press
Abstract: Effective public debt management can save millions of taxpayer dollars, ensure that needed infrastructure is delivered in an efficient and equitable way, and bolster trust in state and local government. When done poorly, it can squander taxpayers’ dollars and their goodwill. Given the tremendous complexity and careful scrutiny now surrounding municipal bonds, it’s more challenging than ever for public officials to get it right. As such, the goal of this book is to equip public debt management officials with a base of evidence to guide their strategic, policy, and tactical choices as they navigate the evolving municipal market landscape.
"Physical Climate Risk Creates Challenges and Opportunities in US Municipal Finance” (with Aayushi Mishra, et. al.). Nature Cities 3 (January) (2026): 11-21.
"ESG Factors in Municipal Securities Disclosures: Toward a Materiality Concept." Northern Illinois University Law Review 44(3)(2024): 195-222.
"Diversification and Stability in Illinois Local Government Revenues" (with Wesley Janson). Illinois Municipal Policy Journal 8(1) (2023): 70-89.
"Local Lodging Taxes Before, During and After the Pandemic" (with Tom Hazinski). Municipal Finance Journal 44(1) (2023): 45-64.