Justin Marlowe

We are proudly sponsored by DebtBook, Nixon Peabody, the Government Finance Officers Association, BAM Mutual, Odyssey Advisors, and MuniPro.

I'm Justin Marlowe, joined as always by my intrepid co-host, purveyor of long stories short, bona fide fiscal policy expert, Liz Farmer.

Liz, welcome back.

Thanks, Justin, and a happy October to you.

So it was, what, about a week and a half ago that the Federal Reserve Board decided to raise interest rates a quarter point.

I had a fascinating conversation with University of Chicago professor Justin Marlowe, He's in the Harris School of Public Policy, directs the Center for Municipal Finance there.

And he said there's going to be an impact here on state and local governments, and the implications are especially significant for Illinois.

He said state and local governments in Illinois are are already borrowing at higher interest rates because of their relatively low credit ratings and concerns about their long-term financial sustainability.

Mayor Brandon Johnson often touts the work that's done following these bond issues, but these bond issues that end up raising the city's debt.

And when you have that low credit rating and you're paying higher rates to begin with, and now the Fed raises interest rates, well, that's going to make these projects even more expensive.

Justin Marlowe said the Fed's interest rate hikes are eventually priced into rates we all pay.

Of course, we see that in everyday life and in the private sector with things like mortgages and car payments.

And they certainly have an obligation to their readers and they want to make sure that their readers are well-informed, but it's not necessarily their job to solicit input, right? It's not necessarily their job to ensure that budget priorities that citizens express are reflected in the budget.

And so then you get into this gray area of like, well, then whose job is it, right? And I distinctly recall Liz Farmer and Justin Marlowe working many years ago on a variety of efforts in this space, explainers, Citizen guides, all sorts of efforts that were meant to sort of fill that gap between journalism and policymaking and to make everybody who's involved in budget policymaking that much more informed.

Those were great.

I think they served their purpose really well.