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16 U.S. Cities That Could Face Bankruptcy in 2011

Provided by the Business Insider, Dec. 21, 2010:

2011 will be the year of the municipal default. At least that's what analysts like Meredith Whitney predict, as do bond investors that have been fleeing the muni market.

There are many reasons to be worried. First, the expiration of Build America Bonds will make it harder for cities to raise funds.

Second, city revenues are crashing and keep getting worse. Property taxes haven't reflected the total damage from the housing crash. High joblessness is cutting into city revenues, while increasing costs for services.

The next default could be a major city like Detroit, or it could be one of hundreds of small cities that are on the brink. Did we leave off your ailing city? Let us know in the comments.

San Diego, Ca.

http://finance.yahoo.com/tech-ticker/16-u.s.-cities-that-cou...



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wonder what would happen

if the federal government bailed out just the blue states, and cities mentioned in this article? What would all the republicans do? Didnt something like that cause the civil war?

Not an easy fix - Unions and Arbitration

Municipal unions are a huge road block to cuts. Many of these cities are dealing with 8-16 different unions among their employees. They will fight very hard to maintain their contracts. Many will fail...but

Police and Fire unions CANNOT strike - therefore they are provided a right to Arbitration. The arbitration process is VERY long. While working WITHOUT a settled contract employees receive the salary and benefits of their OLDER/BETTER contract. Real example from my city:

2007 - Police and Fire unions discuss contracts with city
2008 - Police and Fire unions reject all proposals for not meeting their demands
2009 - Police and Fire unions reject all proposals for not meeting their demands - file for Arbitration
2010 - Arbitration talks postponed and dragged out
2011 - Arbitration meetings take place in January
2011 - Arbitration ruling declared in May/June - contracts forced
2012 - Settled contract from Arbitration
2013 - Police and Fire unions discuss contracts with city and reject new proposal - Milk ARBITRATION and old contract AGAIN
Repeat previous steps - 2013 contract talks not settled until 2016/2017

During this time it is LEGAL for the unions to speak publicly at council meetings condemning mayor/council/manager and chiefs of incompetence/lies/placing residents at severe health and safety risks.

During this time it is LEGAL for the unions to ORGANIZE council recalls (even if union employees DO NOT LIVE in the city where they work and circulate the petitions)

The Unions can and will say:
1) Residents - dispose of your representatives because they are making cuts that will kill you

2) Council/Mayor - blood is on your hands and if you do not maintain our funding we will strike fear in your residents / and RECALL you

Who will residents side with? The American Heroes: Police and Firemen or their elected politicians in suits?

Firemen?

Is there even legislation that public firehalls should be mandatory?

The more sprinkler and fire saftety programs there are the more firemen get paid? It is not as if all the structures are made of wood now.

Firemen should have to take a 50 per cent pay cut along with all the other public klowns if they care so much about their bloody towns, villages, and cities.

All they seem to do is ride around all the time cruising for 'ladies' and wasting fuel and wearing down the fire engines. Most of them probably cheat on their wives and boyfriends.

donvino

Like Agenda 21 sneaking into the soils everyday.

“The mechanics of rapid resource extraction in N. America are bribed into place and deceived into your town.” ~ RfL

PS. So many opportunities for fraud. Reduce government!
http://www.usdebtclock.org/

And never forget, “Humans, despite our artistic pretensions, our sophistication and many accomplishments, owe the fact of our existence to a six-inch layer of topsoil and the fact that it rains.”

Did You Notice?

Its the industrialized cities who are mainly on the list? Thats what happens when you move manufacturing to China. I'm thinking it's the giant sucking sound that Ross Perot warned us about.

Municipal Debt

I think people and businesses will be moving from these insolvent jurisdictions.

The city councils of these locales should be prosecuted and thrown in jail imo.

The austerity measures will be too severe and they will eventually become 'ghost towns'.

Repentance is a good start because redemption seems out of the question for now.

donvino

Every person in all the states,city and loacal

governments should make sure before any OKs
on tax increases look at each Comprehensive Annual Financial reports of these government's and our national
government also.

www.cafr1.com

"Freedom is a right that can never be won in war,only by each individual "

They should have

the ENTIRE state of California on there.
It's one DUMB state!

Harrisburg, PA should be on

Harrisburg, PA should be on that list. They elected a mayor who didn't have a clue. She spent money renovating her office, spending money for trips... yea typical big govt type who has other people's money.

Anyways she did "inherit" the mess to an extent, but she is unwilling to fix it, but rather wait for a bailout.

interesting...

...

"First they ignore you, then they laugh at you, then they attack you, then you win!"
GANDHI

"The belief is worthless if the fear of social and physical punishment overrides the belief."

SteveMT's picture

With 48 states in the red, some $Bs+ in the hole,...

I believe that number is a conservative one.

Government Run Prostitution and Gambling - An Oxymoron?

The statement at the bottom about their best hope being the opening a city-run casino seems over-optimistic.

Didn't the government, through the IRS, take over a whorehouse and casino in Nevada and try to run it?

If I recall correctly, the government whorehouse went bankrupt.

What do you think? http://consequeries.com/

That's moral values for you!

Have to pay the debt, no matter what....even though the most unfortunate events as long as that debt gets paid.

fireant's picture

Muni Bond Chart

http://finance.yahoo.com/q/bc?s=MUB&t=2y&l=on&z=l&q=l&c=
Check out the volume recently. Part of it is the rush by cities to sell new bonds before the "Build America" federal program expires next week (the feds pay 35% of interest).

Undo what Wilson did

wow - not good

what do they mean by annualized gap? I think it is the yearly shortfall in per cent of the budget but not sure.

donvino

Continue urban life at your great peril.

When TSHTF all cities will be death traps. If you're staying there for a big-bucks job, you'd better snap up a retreat property in an underpopulated area at once, one with its own water source, and have a helicopter waiting on the rooftop. If collapse is sudden, panic will rule. Highways will be jammed. Roadblocks will be erected. Take responsibility now.

New Hampshire and Ecuador.

There will be no great

There will be no great thunderclap and sound of trumpets announcing the collapse of the cities, the states or the country. As goes most of our dreary lives, these things all happen gradually and messily, but life continues and people just keep doing what they do regardless of laws, government and opinion polls.

Really so certain?

My use of the phrases "when TSHTF" and "if collapse is sudden" serve to qualify my pronouncement whereas yours is given with unwarranted certitude IMO.

You may well be right of course. Certainly in my lifetime change has been mostly gradual. However there are undeniable examples of sudden SHTF events in history (Pompei, Hiroshima/Nagasaki, sacking of Rome) and future dangers such as EMP attack or Carrington event will be instantaneous. Even in economics, ask the Argentinians how much time they had to prepared for the great banking freeze, pension pillaging, and currency trade-in.

In our world of electron-speed transactions the tipping point over the precipice could come very suddenly. Within just a few hours nearly everyone would be aware of the collapse and panic would be at a high pitch.

New Hampshire and Ecuador.

Or the Earth could be

Or the Earth could be destroyed by a large meteor, or half the planet could be wiped out by a sudden gigantic burst of solar radiation. I don't get too worked up about things that are obviously beyond my control, including the scenarios you've described.

That asteroid collision is a bummer alright.

There's some Swiss guy who talks to aliens (he says) and they've told him that the asteroid Apophis is on a course to destroy Europe sometime in the future but if we act soon enough it can be deflected with just a little push (nuclear bomb?). The closer it gets the more energy will be needed to avert catastrophe.

Of course this guy may well be full of beans but the same principles apply to any big rock with our name on it. Tracking and being ready to divert any threatening asteroids is a legitimate defense rationale for tax-funded space programs. It's also a good common ground for international cooperation. The Russians have been hot on this topic for years. The US, who knows? I don't trust them to tell us what they know or what they're doing on our behalf (more likely THEIR behalf).

I do know of some deep earth shelters established by various governments, especially our own with off-budget funding no doubt. I'd build one myself if I were wealthy enough.

Nothing we know of in the universe will last forever. Our sun will explode, Earth be destroyed, our galaxy be sucked into a black hole, etc. As for us, we have genetic lifespan time bombs ticking away inside us that we haven't figured out how to defuse. Species expire on a daily basis and our own will at some point, even if we learn to get along, turn off the biological self-destruct sequence, and expand on to other planets, solar systems, and galaxies.

If our various notions of afterlife are correct, it may not matter when or how our bodies expire. To me, survival is a big game. While others are comforted in surrender to the threat, I like to treat it as a problem I can solve. And if I fail, which I inevitably will, well, I'm on to the next big adventure :-)

New Hampshire and Ecuador.