![]() ![]() ![]() ![]() Philadelphia’s school district, the nation’s eighth-largest, faces a $304 million deficit in its $2.35 billion budget, and is seeking $133 million from labor-contract savings to prevent further cutbacks. According to a recent city audit, Oakland has lost $250 million from a 1997 pension obligation bond sale and subsequent investment strategy. Oakland is trying to get out of a Goldman Sachs-brokered interest rate swap that is costing it $4 million a year. Newburgh was cited by Moody’s for “tax base erosion and a weak socioeconomic profile,” with 26 percent of its population below the poverty line and its school district facing a $2 million budget gap. Menasha defaulted on bonds in 2007 it had issued to fund a steam plant which has since closed and left the city permanently in the red and, as of 2011, had $16 million in general fund revenue, but had $43.4 million in outstanding debt. It filed for bankruptcy protection in 2011 over a $3.14 billion sewer bond debt. Jefferson County, home to the city of Birmingham, has been dealing with the collapse of refinancing for a sewer bond. Irvington has a violent crime rate six times higher than New Jersey’s average, with Moody’s citing “wealth indicators below state and national averages and tax-base and population declines due to increased tax appeals and foreclosures.” Harrisburg is at least $345 million in debt, thanks largely to municipal bonds it guaranteed in order to finance upgrades to its problematic waste-to-energy trash incinerator. Here is my worry list, based on bond ratings and other data, of the top 20 cities to watch for financial troubles in the wake of the Detroit story:Ĭompton has teetered on the brink of bankruptcy after it accrued a general-fund deficit of more than $40 million by borrowing from other funds, depleting what had been a $22 million reserve.Ī New York state audit concluded that years of fiscal mismanagement - including questionable employment contracts and illegal payments to town officials - left East Greenbush more than $2 million in debt.įresno had the ratings of its lease-revenue bonds downgraded to junk-level by Moody’s, which also downgraded its convention center and pension obligation bonds due to the city’s “exceedingly weak financial position.”įitch Ratings warned that Gulf County’s predominately rural economy is “narrowly focused,” with income levels one-quarter below national averages and economic indicators for the county also comparing unfavorably to national averages. And there are about a dozen major California cities having systemic problems paying their bills. One is only 25 percent funded, and where the other 75 percent of the money will come from is anyone’s guess. Keep an eye on “too big to fail” cities like Chicago, Philadelphia, and New York.Īccording to an analysis by the Manhattan Institute, several Chicago pension funds are in worse financial shape than the worker pensions in Detroit. The city raced to the financial insolvency finish line before anyone else in its class. This is a giant fiscal sink hole - and because of defined benefit plans, the hole keeps getting deeper.ĭetroit may be the largest city in American history to go bankrupt, but it is not alone. These are legal promises to pay healthcare benefits to municipal workers beyond the employee contributions to finance those funds. These cities have amassed $118 billion in unfunded healthcare liabilities. cities are plagued with the same kinds of retirement legacy costs that sent Detroit into Chapter 9 bankruptcy this summer. That’s because many of the 61 largest U.S. city in a boatload of financial trouble? Think again.ĭetroit’s bankruptcy filing sent shivers down the spine of municipal bondholders, government employees, and big-city urban residents all over the country. ![]()
0 Comments
Leave a Reply. |