Truly the grande dame of the municipal marketplace, industry veteran Claire Cohen of Fitch Investors Service Inc. this year makes her third appearance on the All-America First Team. Ms. Cohen's category covers all types of general obligation bonds: states, cities, counties, and school districts.

Bill Oliver of Prudential Insurance Co. and Hyman C. Grossman of Standard & Poor's Corp. form this year's second team. Mr. Oliver was a first team All-American in 1991, when the program featured a separate category for city and county GO bonds.

Mr. Grossman, the often-quoted professional from S&P, has consistently led the S&P team in vote tallies. Additionally, he has placed on the second team for the past three years.

Mr. Oliver and Mr. Grossman both finished slightly behind Ms. Cohen, but well ahead of the remaining analysts in the field.

"Over the past year, we've seen states make adjustments as the economic pressure continued and the recovery failed to materialize," Ms. Cohen said, "instead of taking steps that would tide the states over until the economy rebounded."

A True Generalist in Her Sector

Ms. Cohen is a true generalist in the GO sector, able to apply lessons from across the nation to her credit analysis questions. She strongly cautions municipalities that they need to take a more active role in furthering their own interests in Washington. This is a clarion call that many municipal government organizations have adopted in recent years as the threats to municipal bond issuance mount on Capitol Hill.

And even when true disasters threaten like Florida's recent hurricane and major fiscal problems in most East Coast cities, Ms. Cohen usually remains confident about the staying-power of America's municipalities. "I believe they are more resilient than people are giving them credit," she said.

For example, California's deficit problems were foreseeable. "The strong growth hid a lot of problems and the pain will be shared or passed through to local state governments."

Keeping an Open Mind

She didn't buy into the, dare we say "golden" reports about California's strengths as "the ninth-largest sovereign entity in the world."

Nor did Ms. Cohen believe the reports about Massachusetts being as bad a credit as some reported. "I think people see how problems can be worked out."

Typically, working out the problems at the state level means sharing the pain. In cities like Philadelphia, Bridgeport, and Washington, the problems continue to be difficult to resolve on the local level.

Ms. Cohen noted that the resolution of Philadelphia's serious problems isn't easy. "Not everyone wants to step up to the plate and take a cut.," she said. Specifically, the recovery plan for Philadelphia includes union concessions and "there is less money to go around."

Bigger Topics

Under the heading "Bigger Topics," Ms. Cohen mentioned pension funding. There have been a lot of adjustments to pension funding, she noted, with the overall direct impact to reduce direct funding to the pension funds.

"When there is so much pain being spread around with furloughs, no raises, and people working for free one day a week some of the pain could be shared by the pension funds."

Ms. Cohen believes that Gov. Clinton might make a difference if he were elected President, and the change would help state and local governments.

Search for National Solution

For example, Medicaid is really a national problem, according to Ms. Cohen. "But we haven't found a national solution."

Because Gov. Clinton has experience with municipal governments, rather than a career in Washington, he has a higher awareness and involvement with state governments," Ms. Cohen said.

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