A Guide to Utah Muni Bonds and Financial Considerations

Utah muni bonds can be a great investment opportunity for those looking for a stable return. Typically, these bonds are issued by local governments or municipalities to finance public projects.

Interest rates for Utah muni bonds can be attractive, with some bonds offering yields of 3-5%. This is because they are tax-exempt, meaning you won't have to pay federal or state income taxes on the interest earned.

Investors can choose from a variety of bond types, including general obligation bonds and revenue bonds. General obligation bonds are backed by the full faith and credit of the issuer, while revenue bonds are secured by specific revenue streams.

Utah muni bonds are considered a relatively low-risk investment, making them a good fit for conservative investors.

The average household in Utah would pay an additional $68.94 a year in property taxes if the bond is approved by voters.

Businesses, on the other hand, would pay $107.61 a year over a 25-year period. This is a significant consideration for any business owner or investor looking at Utah muni bonds.

The state's Debt Affordability Study is an annual report that informs policymakers on the state's debt obligations and practices. It's intended to provide informed perspectives on the reasonable use of debt.

The study focuses on comparison data from other states and best practices of major credit rating services to aid legislators in making critical decisions about new debt and long-term liabilities.

The bond in question would support the construction of the Justice and Accountability Center, a lower security facility. This center aims to provide wraparound services, including housing support, mental health services, and job training.

The center will specifically cater to individuals who have committed minor offenses and are nonviolent, including many of the county's unhoused population. Mayor Wilson envisions this center as a safe place for people to be held accountable.

More than 800 new jail beds would be added, with some reserved strictly for mental health needs. This would also fund maintenance and facility improvements.

The bond would also pay for closing the nearby Oxbow Jail, which is currently operated out of necessity.

The costs of the proposed bond are a key consideration for many voters.

The average household would pay an additional $68.94 a year in property taxes if the bond is approved.

Businesses would pay $107.61 a year over a 25-year period.

Wilson and supportive county council members argue that this is the most cost-effective way to address the criminal justice issues they've outlined.

The problem is that if we don't spend the money now, we'll pay for it later – both in terms of aging infrastructure and the recidivism that occurs by not addressing the problem.

The Debt Affordability Study is an annual report published by the Office of State Treasurer in Utah, required by House Bill 82. It's intended to inform the legislature, investors, rating agencies, and Utahns on the State's outstanding tax-supported debt obligations.

The study focuses on the State's debt practices and the treasurer's perspectives on prudent debt use, rather than just the legal constraints on debt. This approach is similar to managing personal finances, where focusing on credit card limits isn't the best way to manage a budget.

The study uses comparison data from other states, best practices of credit rating services, and strategic ideas to provide informed perspectives on reasonable debt use. Its goal is to aid legislators in making critical decisions about new debt and long-term liabilities.

The study only considers the tax-supported debt of the State and State agencies, including General Obligation debt and lease-revenue bonds. It also looks at long-term liabilities like pension and OPEB obligations.

Utah's legacy of conservative debt use is maintained through this study, while also acknowledging the critical role of debt in the State's development activities.

Historical Asking Prices can give us a glimpse into how bond prices have changed over time. The prices listed in the table below are for bonds with a 5% coupon and a maturity date of October 1, 2028.

The asking price for bonds with a 2.75% yield to worst ranged from $105.05 to $105.65, depending on the quantity available and the date the price was recorded.

Prices for bonds with a yield to worst of 2.75% were the same for two different dates, May 28, 2023, and April 22, 2023, with an asking price of $105.05.

On the other hand, prices for bonds with a yield to worst of 2.72% varied slightly, with an asking price of $105.35 on May 27, 2023, and $105.65 on April 28, 2023.

Here's a summary of the asking prices for bonds with a 5% coupon and a maturity date of October 1, 2028:

The prices listed in the table above show that the asking price for bonds with a 5% coupon and a maturity date of October 1, 2028, varied depending on the quantity available and the date the price was recorded.