This article was originally published on the local finance board.
The local finance board is a nonprofit corporation that focuses on issues of local government finance in the New Orleans area. They’re not a government agency, just like our government isn’t a government agency. They are not in any way affiliated with the government, and they’re not funded by the government either.
Our local finance board gets a lot of attention for being the place where a new city ordinance would be signed into law. The ordinance would allow local governments to issue bonds to finance projects, giving them a way to borrow money from the community. The goal is to help communities get the most bang for their buck from their public works projects.
The City of New York is a unique government entity because it has no true headquarters. Instead, its offices are scattered around the city, and it is funded by public resources, including private citizens. The New York City Financial Services Bureau, or NFBB, is the agency that issues the city’s official bonds. NFBBs are issued by local cities and are used to fund projects ranging from parks to new construction.
NFBBs are the only form of government in the world where the public retains ultimate veto power. Since the NFBBs in New York City are issued by the financial services bureau of the city, they are a very important part of the city’s financial stability. Because of this, it is vital to get these cities’ official bonds in as many hands as they can, and the best way to do this is to issue them directly to the local communities through NFBBs.
New York City has over 200,000 NFBBs, the most in the world. New York City’s NFBBs are responsible for issuing bonds to various financial services companies. These companies do a lot of the real work of the city, but there are also millions of dollars of bonds that are supposed to be invested by the public in the city’s financial stability.
In 2009, the New York City NFBBs issued their first batch of bonds (called the “Bond of the Year”). When that bond was issued, one of the first things it said was “The New York City Government will provide a bond to the City of New York to help fund the construction of the new Brooklyn Bridge.
There are still a lot of questions about these Bonds of the Year. What exactly are they, and why do they exist? But what we do know is that the bonds are meant to be a public good and that the City of New York (the “City”) is responsible for creating them. The bond is supposed to be paid back to the City in 10 years by the people they’ve invested in it, but it’s a lot of questions to answer.
You could think of it as a tax, and the City would have to spend the money on things like roads and other infrastructure. Or you could think of it as a loan, and the City could borrow it from other people, and the City of New York could lend it to its citizens. It’s probably in both camps.
The bond, and the loan, and the taxing, and the borrowing, and the lending, and the taxing all sort of interweave together in some sort of messy way to create something that feels like a unified institution. So it’s almost like the City of New York has a little bit of everything to be a part of, but they don’t quite have it all figured out.
