Thursday, July 12, 2012

Before Stockton: five other big financial crises for US municipalities

Stockton, Calif., recently became the largest US city in history to declare bankruptcy, and it may not be the last. A perfect storm of a low tax receipts, high retiree obligations, cash-strapped state budgets, and ill-advised fiscal decisions has swamped towns this year, big and small, from coast to coast. The result is an unprecedented number of municipalities up against severe financial difficulties.

Here?s a look at some of the most notable financial collapses and near-collapses for US municipalities over the years.

- Mike Eckel,?Contributor

This October 2006 photo provided by the Birmingham Regional Chamber of Commerce shows the skyline of Birmingham, Ala., whose county in 2011 filed an estimated $4.1 billion bankruptcy, the largest municipal bankruptcy in US history. (Dennis Lathem/Birmingham Regional Chamber of Commerce/AP/File)

1. Jefferson County, Ala.

Home to Birmingham, Alabama?s largest city, Jefferson County sought to reorganize its finances in fall 2011 under Chapter 9 of the federal bankruptcy code. A failed overhaul of its sewer system and other bad decisions left the county reeling under more $4 billion of debt and unable to raise taxes, fees, or payments for bonds issued by Wall Street banks. An earlier decision by the state Supreme Court striking down a local income tax has forced county officials to try to persuade the state Legislature to authorize another tax or warn of new budget cutbacks.

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Source: http://rss.csmonitor.com/~r/feeds/csm/~3/18FcT7JDQ8s/Before-Stockton-five-other-big-financial-crises-for-US-municipalities

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