Largest US City So Far to Go Bankrupt

Discussion in 'US' started by jumpinjarhead, Jun 28, 2012.

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  1. So what happens when a city goes bankrupt? Repossess all their stuff?
  2. Well when NYC went all but tits up in 74 there were layoffs of Police Fire, EMS, Teachers, Parks, workers, MTA (Bus/Subways workers), across the board layoff and service cuts. Salaries for thse still in city rolls was frozen and the entire classes of the Police Academy and Fire Department graduated and were laid off the same day, turning in Badges and Guns and uniforms.Eventually the Teachers union cut 150Million of its pension fund to buy city bonds and then a fed loan and state loan came in.
  3. What does that have to do with anything? Are you saying if she'd been a Republican this wouldn't have happened?
  4. There are numerous cities, towns, communities in Germany facing the same problem, the background reasons are not entirely the same but there are some of the larger cities with huge debts and very little income. The result is sh1tty roads, schools in dire need of maintenance and undermanned public offices. The requests to State Gvts and the Federal Govt for financial help are on the increase, but the fight for money is bitter and hard. When will the first German big city face Stocktons fate?
  5. From this article it would appear that Stockton was simply having cashflow problems, reduced tax incomes are mentioned and a shortfall of 26 million is mentioned. A minor problem for a city sea port it would seem. The wooly mention that repayments of Government bonds had been stopped gives no idea of the depth of Stocktons problems. Bad drills there the LA times!

    This time last year the city was estimated to be $225 million in the red, on a parr with several european football clubs and balanced against the real estate and tax incomes of a city sea port, all comparatively minor stuff. But where are the hard figures, what are they hiding?
  6. Don't fence sit, name the names, the city state of Bremen should fall first with almost Greek per capita debts of over €27,000 (2010 figures)!
  7. Chapter IX of the Bankruptcy Code is written for the peculiar needs of cities and recognizes that liquidation is not a realistic option. It provides that the bankruptcy may approve modification of employment contracts and pension rights notwithstanding the provisions of state laws designed to ensure that all changes in contracts goes through the unions and are bargained. The trustee and court can order the disposition of city property surplus to the needs of the operation of essential services. They can also delay/defer payments of loan and interest rates on bonds. Of note is that if a few municipal bankruptcies occur it can effect interest rates for municipal bond issues, especially for municipalities with lower credit rating. The interest on state and municipal bonds and notes in the US is generally exempt from federal income taxes so the state and locals pay less interest on their borrowing than a commercial enterprise/corporation would.

    (for those on Arrse who may recall that I am a retired municipal official: DO not worry on my behalf. The city I worked for has an AAA rating from all the major bond rating agencies and is very well run. I am not sitting here biting my nails due to worry that my pension or health benefits will vanish. My only concern is that the dogs breakfast known as "Obamacare" will mess up my health benefits.)
  8. OK Cernunnos virtually every city, town, Kreis in Germany! With Berlin and most of the Kohlenpott as leading favourites.
  9. Excess spending ala Labour governments in Britain and Australia. It happens in local government as well.
  10. Here are the € per capita debts by Bundesland for 2010. I have not found any more recent figures.

    Region 2010
    Bremen 27.129
    Berlin 17.381
    Saarland 14.644
    Hamburg 14.119
    Nordrhein-Westfalen 12.283
    Schleswig-Holstein 10.843
    Sachsen-Anhalt 10.340
    Rheinland-Pfalz 10.316
    Brandenburg 8.788
    Hessen 8.544
    Niedersachsen 8.448
    Thüringen 8.401
    Mecklenburg-Vorpommern 7.426
    Baden-Württemberg 6.044
    Bayern 3.451
    Sachsen 2.432
  11. The German towns and states troubled by debt and tighter credit facilities came up with a cunning plan, if you are in Germany you will notice the flourishing number of "Gemeindenützliche Unternehmen." Companies founded by the community to take on works normally done directly under the aegis of local government. Outsourcing internalised if you like. This is done to limit risk and open new avenues to obtain credit. It sucessfully hides the debt levels of communities as the debts incurred by companies owned solely by the town don't show up in the balance sheets.

    This is a house of cards which can only collapse and German economic collapse traditionally leads to war.
  12. Recently, the patterns been: the schools go to shit, they lay off a fair wedge of the cops, crime goes off the grid and the population simply moves elsewhere starting a death spiral. Reasons: often simple economic shit happens stuff, also failed city business decisions, incompetent amateur night governance, falling tax revenues and decades of deferred spending/debt accumulation, both signs of political cowardice.

    US cities often bowl along on dumb luck propped up by diligent federal pork hunting and often one dodgy large business, Detroit comes to mind, they have always failed occasionally, it's part of the genius of the place.

    In California as a state it's largely because they've legislated for an increasingly complicated and overly representational form of government, very dangerous in a place filled with wide eyed spandex wearing balloons who should never be let near a ballot paper.