Cities declaring bankruptcy: effects on business, retirees (loans, debt, borrowing)

[RiverBird]

Today's Washington Post...not good news http://www.washingtonpost.com/busine...HgL_story.html

"....Harrisburg’s bankruptcy filing comes as a growing number of municipalities across the country are struggling with mounting debt and a decline in revenue in the recession’s aftermath.

Just last month, Alabama’s Jefferson County narrowly avoided being dragged into bankruptcy from a failed sewer financing deal, although a final resolution has yet to be reached. Earlier this year, the tiny city of Central Falls, R.I., went into bankruptcy, clearing the way for deep cuts in the pensions of retired city police officers and firefighters.

If Harrisburg’s bankruptcy filing stands, it would mark the largest municipal filing since Vallejo, Calif., did so in 2008. For years, Harrisburg has been struggling under a heavy debt burden, more than $300 million of which is connected to an incinerator project that turned into a financial debacle...."

Where is this headed? Is it a sign of things to come?

Where will the bailout come from? Will property taxes skyrocket?

[MrRational]

Originally Posted by newenglandgirl

"...as a growing number of municipalities across the country are struggling..."
Where is this headed?

Reduction in municipal/county/state services...
and general refusal to take responsibility for unfunded mandates.

Will property taxes skyrocket?

Unless (or until) income tax revenues are restored... you betcha.

[RiverBird]

Originally Posted by MrRational

Reduction in municipal/county/state services...
and general refusal to take responsibility for unfunded mandates.

Unless (or until) income tax revenues are restored... you betcha.

How is Raleigh doing?

[MrRational]

Originally Posted by newenglandgirl

How is Raleigh doing?

No idea; I don't live there.
Check their paper? News, Sports, Business, Politics - Raleigh, Durham, Chapel Hill | The News & Observer

[bobtn]

All will need to take a haircut.

[RiverBird]

Originally Posted by bobtn

All will need to take a haircut.

Looks like some municipalities will become bald.

[newonecoming2]

Originally Posted by newenglandgirl

Where is this headed? Is it a sign of things to come?

What yo0u are looking at is the end game of moving our manufacturing base to china with it gone we done have the tax base that came with it. The federal government is borrowing 45% of the money it spends. Now if it looked like things were going to improve any time soon that wouldn't so bad, but... Housing is expected to be in a major slump for the next decade at least. This means no home equity loans to pump the economy up with.

Originally Posted by newenglandgirl

Where will the bailout come from? Will property taxes skyrocket?

If you want a bailout then look to the minimum wage. We can get a lot more taxes if we up them minimum wage to $30hr. Bailout main street. Print a bunch of money and give it to everyone.

[Themanwithnoname]

Originally Posted by newonecoming2

What yo0u are looking at is the end game of moving our manufacturing base to china with it gone we done have the tax base that came with it. The federal government is borrowing 45% of the money it spends. Now if it looked like things were going to improve any time soon that wouldn't so bad, but... Housing is expected to be in a major slump for the next decade at least. This means no home equity loans to pump the economy up with.

If you want a bailout then look to the minimum wage. We can get a lot more taxes if we up them minimum wage to $30hr. Bailout main street. Print a bunch of money and give it to everyone.

ANd a Big mac will cost $100

Can't we (just ONCE) learn from history!

[texdav]

The major probelm will be Bond rating to do project which can make huge differences in projects cost like infrastruture. Low rating'huge differences in final cost and higher taxes to pay for the difference.Things like mandated sewer improvements from health hazards can over rule doing projects to attract business and improve neighborhoods.You can actually lose equipment need to maintain abascia service breakdowns by departments.

[jimhcom]

The problem with municipality’s budgets is one that will grow considerably in the next decade due to pension obligations for workers due to retire.
Many municipalities have agreed to lavish pensions and benefits based on over optimistic portfolio projections for their retirement funds.
The shortfalls are going to be huge, and in many cases, the taxpayers are going to be on the hook for the difference.
Politicians are in a position of either facing the wrath of voters if they try to raise taxes, or filing bankruptcy and reneging on their obligations to retired workers.
Very ugly situation.