In this episode of Where Public Finance Works, Justin Marlowe, esteemed faculty member at the University of Chicago’s Harris School of Public Policy, returns to share his insight on important shifts within the municipal market. Following where we left off in Part 1, Justin takes us through the current renaissance in public finance, celebrating the unleashing of expertise across all levels, from CFOs to billing clerks. He emphasizes the expectation for these professionals to not just execute tasks but to actively engage in policy-shaping discussions, highlighting the shift from static fund allocation to dynamic, informed decision-making that impacts policy and community development.
Join our host, Tyler Traudt, as he and Justin discuss the significant role of the Inflation Reduction Act (IRA) in shaping new financial models, particularly in clean energy, and the intricate dance of managing tender offers in municipal bonds.
Justin also sheds light on the pressing workforce challenges within public finance, marking the need for a diverse skill set in the era of AI and technological advancements. He shares valuable insight into innovative approaches to recruitment and development, recognizing the potential of talent with non-traditional backgrounds enriching the public finance workforce.
This episode not only underscores the transformational power of federal funding and the consequent responsibilities but also showcases public finance as a robust, adaptable field, rising to meet the complexities of a changing world. One undeniable trend is the internationalization of state and local public finance when you talk to borrowers today.
“We're looking at detailed, complex, nuanced stories of how money moves through an organization and how we use dollars to try to accomplish the public's objectives. And if you are somebody who's used to doing deep dives into literature, languages, and coming through historical documents, that’s a skill set that works really well to try to be able to do all that work…And I think we could do a lot more to try to recognize that people can come to public finance from different backgrounds and really leverage that.”
- Justin Marlowe, Research Professor at University of Chicago's Harris School of Public Policy
Justin Marlowe is a Research Professor at the University of Chicago’s Harris School of Public Policy. His teaching and research are focused on state and local government budgeting, finance, and financial management. He has published five books – including the forthcoming Public Debt Management: Strategy and Evidence – and dozens of articles on the municipal bond market, infrastructure finance, governmental accounting, and local fiscal policy.
At the Center for Municipal Finance, he has led the development of several innovative research studies and data products designed to help state/local government officials make better decisions about borrowing and investing public money. He also serves as Editor-in-Chief of the Public Budgeting & Finance Journal. He is a Fellow of the National Academy of Public Administration and co-hosts (with Liz Farmer) the popular podcast “The Public Money Pod.”
1. Challenges and Innovations in the Public Finance Workforce: Justin discusses the workforce challenges facing public finance, mainly the difficulty in recruiting and retaining talent due to competitive disadvantages with the private sector. He suggests innovative solutions like tapping into diverse talent pools and leveraging non-traditional backgrounds, emphasizing storytelling and analytical skills as critical components in modern public finance roles.
2. The Transformative Impact of Technology: The episode turns to technology's role in reshaping the municipal market. Separately managed accounts and advanced analytical tools are enabling investors to tailor their portfolios to specific criteria, reflecting a trend towards more personalized and strategic investment practices, which public finance professionals must understand and embrace.
3. Inflation Reduction Act as a Catalyst: Justin details the transformative influence of the IRA, especially its clean energy tax credits, on the public finance sector. He finds this act serves as a financial game-changer, opening up innovative funding models for local governments and altering the course of public investment strategies.