Episode summary
Texas Is the Tip of a Melting Muni Iceberg: How a 'Boycott' Led to Higher Costs | Bloomberg...
Bloomberg Businessweek Daily
· · 12 min · Hosts: Carol Massar, Tim Stenovec · Guests: Matt Winkler
Summary
Matt Winkler argues that Texas’s 2021 anti-ESG law, SB13, helped raise borrowing costs for the state and its municipalities by discouraging Wall Street banks from underwriting Texas debt unless they complied with the state’s requirements. He says the spread between Texas and California municipal borrowing has widened by about 30 basis points and that the gap is now structural, not temporary.
Key takeaways
- Matt Winkler says SB13 pushed banks away from Texas municipal debt and helped make California relatively cheaper to borrow from than Texas.
- Matt Winkler cites Bloomberg Intelligence data showing Texas has suffered $1.1 trillion in climate-related expenses over the prior 20 years, more than any other state.
- Matt Winkler says Corpus Christi has been downgraded because it may run out of water by 2027, making climate risk visible in municipal pricing.
- Matt Winkler says Florida is now borrowing a full percentage point more than California, underscoring how climate exposure is showing up in muni markets.
- Matt Winkler argues that firms that abandoned ESG were not rewarded in public markets, pointing to a University of California, Berkeley study.
Notable quotes
“the difference between California and Texas in the municipal bond market suddenly widened and that spread that you ref you referenced uh three uh.3 percentage point 30 basis points is real and it's permanent”
“Texas has an antipathy to science. How do we know that? Well, science tells us that Texas is burning up, literally”
“Money simply is about relative value. And the relative value of Texas is depreciating relative to California”
“Bloomberg Intelligence found in June 2025 that it at$ 1.1 trillion dollars, no state has suffered more in climate related expenses over the prior 20 years than Texas”
“Florida is actually worse than Texas. Florida is now borrowing a full percentage point more than California”
How the episode opens
Bloomberg Audio Studios podcasts, radio, news. — You're listening to Bloomberg Business Week with Carol Masser and Tim Stenc on Bloomberg Radio. — Great to have back in studio with us in our Bloomberg interactive studio, Matt Winkler. He's Bloomberg News editor-inchief joining Emily and me. Let's talk Texas. Why did it first come up on your radar? I'm just curious, did you write a column? Like what is it that led you to that? Is it
Actually it goes back uh several years now. Uh there was a momentous event in Texas and Florida. In Texas, it was called SB13. Mh.
It was legislation that prohibited anyone on Wall Street from underwriting, ensuring anything that had to do with state and local government debt in the state of Texas if they were committed to the so-called net zero banking alliance, which was climate change, uh, zero emissions by 2050, a pledge, uh, transparency in markets, all kinds of actually good stuff, right? But it came under those letters ESG and also DEI. And um the problem uh for the banks was if they didn't uh comply they would lose the business with Texas.
And of course they all folded.
What is interesting about this is since the bill went into effect, it's now several years now. the difference between California and Texas in the municipal bond market suddenly widened and that spread that you ref you referenced uh three uh.3 percentage point 30 basis points is real and it's permanent even with all the help of Wall Street and Texas really has not recovered since. Now what else is going on?
Texas has an antipathy to science. How do we know that? Well, science tells us that Texas is burning up, literally.
And one big example of that is Corpus Christi, uh, a city on the Gulf of Mexico, uh, more than 300,000 people.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- muni bond costs
- texas boycott fossil fuels
- interest rates
- state borrowing
- bond market repricing
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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