The Public Securities Association launched its "Built By Bonds" campaign last week in Baltimore, a fine place to make the public aware of the very visible benefits of tax-exempt financing.

I first visited Baltimore in September 1980 to attend a party celebrating what would have been the 100th birthday of the late journalist H.L. Mencken. The glittering event was held in one of the Hotel Belevedere's grand ballrooms. The hotel had been restored and must have been much as it was in Mencken's own time -- bright and sparkling.

The same could not be said for the rest of the city, however. I went on a ramble, I recall, out to Mr. Mencken's house at 1624 Hollins Street, and over to the Enoch Pratt Library's "Mencken Room," where his collected papers are preserved. I also went to Schellhase's, a downtown restaurant where Mr. Mencken's "Saturday Night Club" met for many years and which still displayed the club's pewter-lidded beer schooners.

I could not help feeling at the time that the Mencken stuff should be evacuated to better quarters. Such was the Baltimore of 1980 -- perhaps not dangerous or threatening, but crumbling, certainly, frayed at the edges, worn and rusty. The place was, I thought as I walked around, very, very quiet, and a bit sad, a bit wan.

I have been to the city many times since, most recently this past June, to see the new Orioles baseball stadium at Camden Yards. I visited with old friends and new, seeing Jon Tumler, whom I first met when he was with the PSA's Washington office, but who is now a banker with Legg Mason Wood Walker Inc., the Baltimore-based brokerage house. I also saw Sam Fales, who is with Legg Mason and also chairman of the PSA's municipal sales and marketing committee.

The Baltimore of 1980 and the Baltimore of 1992 are almost two different cities, and bonds made a big difference. The city of 1980 was shabby, run down, and, to all appearances, slowly dying. The city of 1992, because of the Inner Harbor development and the ballpark and all sorts of little, public amenities that seem to show a city that cares, is vital, and thriving.

There is private development, featuring new office towers and shopping complexes, and public development, in the form of new infrastructure. Public money has gone into the restoration of such sites as Mr. Mencken's home, which you can now visit, Babe Ruth's birthplace and Orioles shrine, and improvements to the Peale Museum.

Then there is the ballpark. I have never been a supporter of public baseball stadiums. Make the owners pay for the stadiums and give them a real stake in their communities. Make the owners pay, and perhaps they will bring down the sizes of the impersonal monstrosities that now house the national pastime.

And yet, I admitted to Sam Fales, Baltimore seems to be a city that did it right. It built a municipal stadium on human scale, old-fashioned but not hokey, comfortable, and even friendly. That the place is sold out regularly is as much a tribute to the stadium's style as it is to the kind of baseball the Orioles have been playing. Baseball fans have come from far away to ogle this masterpiece. As the movie "Field of Dreams" had it, If you build it, they will come. And they have.

This all adds up to genuine contributions to the public good and can make everyone in the municipal bond market, both on the issuer and professional side, proud. The municipal market happens to be a lot more than bond scams and tax dodging and pirates selling worthless bonds to widows and orphans.

Of the 12,000 or so bond issues that will be sold this year, almost all of them will be sold in the usual, quiet, plain vanilla way, and there will be no doubts about their credit quality, or their purpose.

So last week the PSA kicked off the "Built by Bonds" campaign in Baltimore, to make people more aware of what bonds are and what they do and why they should remain tax-exempt.

The campaign, according to a PSA flyer, will "demonstrate that municipal bonds are the most cost-effective and responsible way for communities to finance public needs." It adds that the campaign will "clarify misconceptions such as the belief that all projects financed by municipal bonds are supported by taxpayers, when, in fact, about 70% of the new issue volume each year is paid for by their users."

The campaign will also defend their tax-exempt status. And now is the time to do that, not when the enemy is at the gates. The campaign is a good idea, and Baltimore was a good place to launch it.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.