Municipal Market Evolution Reflecting the Constitutional Underpinnings of the Law of Public Finance


June 2023

Ann Fillingham, Director of Dykema’s Regulated Industries Department, and a member of the firm’s Public Finance Practice Group, led the author group that penned the article, “Municipal Market Evolution Reflecting the Constitutional Underpinnings of the Law of Public Finance.” The article, which appeared in the June 2023 (Volume 52, Number 1) edition of the American Bar Association’s The Urban Lawyer publication, was co-authored by Fillingham, Sandy MacLennan, Jodie Smith, and Perry Israel, and contains an extensive analysis of the legal evolution of the tax-exempt bond market. Additional research and writing contributors included Banu Colak, senior counsel at Dykema; and Davis Crocker, a law clerk at Dykema.

The production of the article was supported by the National Association of Bond Lawyers (NABL)—each of the co-authors has been a long-time, active member of NABL. The NABL is a non-profit organization established in 1979 to promote the integrity of the municipal market through the education of its members and the public in the laws affecting state and municipal bonds. 

As explored in the article, the structure and regulation of the U.S. sub-sovereign debt market is largely the result of the power-sharing dual sovereignty envisioned by the framers of the U.S. Constitution. Many of the powers, privileges, and protections of municipal entities run deeper than the state laws that purport to define them, are firmly rooted in the Constitutional and common law ground beneath, and have essential attributes of sovereignty that cannot be transferred or encumbered. This history helps explain the different historic growth patterns of the corporate and municipal securities markets and helps to inform future market evolution.

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