“We went fifty years without any municipal bankruptcies in the United States, and now we are going to get dozens of them. The governing class did not get stupid fast.”-Richard Brodsky, former 14-term New York State assemblyman
(Actually, contrary to Brodsky’s statement, I think there was one chapter 9 bankruptcy in 1994, and another in 2008 [both in California]. But the point is that we’ve never seen the numbers we’re seeing now.)
Since 2010 dozens of cities, counties and local service agencies have gone bankrupt, something not seen in at least fifty years! Analysts are predicting dozens more. The reason is simple: Bad economy means less jobs, and most of the jobs that are available pay a pittance (minimum wage, no benefits). That means less tax revenue for state and local governments.
Some stupid local governments try to make up for it by raising local taxes. That shows you how out of touch your local reps are. If tax revenues are down because most people are making less money, then raising taxes will only make things worse (remember what sparked the U.S. Revolutionary War: Unfair taxes).
2010 Local Government/Service Bankruptcies
Lost Rivers District Hospital, Arco, IDAHO
Lake Lotawana Community Improvement District, Lee’s Summit, MISSOURI
Grimes County MUD 1 and Official Committee of Bondholders, Grimes County, TEXAS
The Southern Connector (toll road), Piedmont, SOUTH CAROLINA
2011 Local Government/Service Bankruptcies
Central Falls, RHODE ISLAND
Jefferson County, ALABAMA
Centerton Municipal Property Owner’s Improvement District 3, Fayetteville, ARKANSAS
Harrisburg, PENNSYLVANIA (courts rejected claim)
Boise County, IDAHO (courts rejected claim)
Barnwell County Hospital, SOUTH CAROLINA
Bamberg County Memorial Hospital, SOUTH CAROLINA
Sanitary and Improvement District 512, Douglas County, NEBRASKA
Mendocino Coast Recreation and Park District, Fort Bragg, CALIFORNIA
2012 Local Government/Service Bankruptcies & Defaults
Harrisburg, PENNSYLVANIA (default)
Suffolk Regional Off Track Betting Corp, Hauppauge, NEW YORK (second filing, first was rejected by courts in 2011)
Hospital Authority of Charlton County, GEORGIA
Rural Water District 1, Cherokee County, OKLAHOMA
Sylamore Valley Water Association Public Facilities, Izard County, ARKANSAS
Stockton, CALIFORNIA
Mammoth lake, CALIFORNIA
San Bernardino, CALIFORNIA
Seven local governments are under emergency management in MICHIGAN
Analysts predict many more major U.S. cities to go bust
Washington DC: In debt by $537 per resident
Detroit, MICHIGAN: In debt by $217 per resident
Honolulu, HAWAII: In debt by $110 per resident
New York City, NEW YORK: In debt by $565 per resident
Almost every major city in CALIFORNIA (beware the saying; “As California goes, so goes the rest of the nation.”)
Camden, NEW JERSEY: In debt by $54 per resident
Cincinnati, OHIO: In debt by $181 per resident
And the biggest loser is: Chicago, ILLINOIS: In debt by $2,353 per resident