Jack Bogdanski offers this thoughtful analysis of Portland's new bond issues. Jack pretty much said everything that needs to be said on this, but it is worth pointing out that one of the bonds is simply going to pay off a line-of-credit from Bank of America to the city. In other words, that money has already been spent on urban renewal projects or corporate hand-outs that, thus far, have not actually generated revenue for the city. This the municipal equivalent of getting a second mortgage to pay off a credit card which you used for a vacation you already took.
Portland could find itself in real trouble on this type of issue if it the credit of its muni bonds are downgraded. This hasn't happened yet, but it is possible.
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