http://www.wthitv.com/dpp/news/local/bankruptcy-bill Will your city declare bankruptcy? A new law may allow it Updated: Tuesday, 28 Dec 2010, 6:34 PM EST Published : Tuesday, 28 Dec 2010, 3:00 PM EST * Kate Greene INDIANA, (WTHI) - It's not uncommon to see families or companies filing for bankruptcy, but you could see your own city in the mix. A new bill is being proposed that would allow Indiana cities to fill for bankruptcy. This new bill backed by Governor Mitch Daniels could be local governments way out of financial trouble. The bill would allow cities to file bankruptcy and allow the state to takeover. What this means is local government can seek an "emergency manager" from the state to help cut the budget. If the emergency manager can not do it, then they can file for bankruptcy. It's an emergency action, the state currently does not allow. A few Wabash Valley cities told News 10 it's an option they hope they will never have to face. "I'm not saying it won't happen, but if the state keeps bugging me it might happen," Mayor of Clinton Art Lindsay said. "But as long as I'm around I don't see us filing for bankruptcy in Clinton, Indiana." As for Mayor Duke Bennett, he said although things are tough in Terre Haute, it's no where near bankruptcy He thinks the bill makes sense because it's more likely for cities to go bankrupt today than in years past. However, Mayor Bennett said he's concerned about what it could mean for taxpayers. "It would be a big tab the state would have to pick up which kind of drains some other resources that may come to us through state funding," Terre Haute Mayor Duke Bennett said. "Or that burden's going to come back on individual taxpayers because they'll have to pick up an additional share to bail them out." Mayor Ann Bradshaw of Brazil, Indiana gave News 10 this statement concerning the proposed bill: "I, as a mayor would investigate this to the fullest, it is hard to juggle funds--and to know that again in the next year cuts are mandated down from the state. With these cuts, what are cities to do? Elected officials work hard to accommodate the citizens in their cities. I would work extremely hard to keep our city from going bankrupt." Governor Daniels said he hopes local governments will not seek bankruptcy as an option, but he believes the state needs the law in case it happens.
http://www.marketoracle.co.uk/Article25319.html US Cities at Risk of Bankruptcy Interest-Rates / US Debt Dec 30, 2010 - 05:33 AM By: Submissions Interest-Rates PRESS TV writes: Next to the housing crisis, some economists say cities declaring bankruptcy is the biggest threat to the U.S. economy in 2011 More than 100 cities could go bust in the new year derailing the economy in America. In Michigan, a small city called Hamtramck says it only has funds to operate until March first. City officials have slashed money for boarding up abandoned houses, cutting grass and no money has been set aside to plow snow from the streets. Communities across the country are in a similar situation and have cut city employees work weeks down to four-days and have eliminated parks and senior centers. State officials are fearful if Hamtramck goes bankrupt, it will open the door for 30 other cities in Michigan to go down the same path, including Detroit. Hamtramck has been more dependent on the auto industry than even Detroit, and with the property values going down, the cities tax base is collapsing. 49;29 without a doubt can if you have failure of one large state New York, Michigan , California it could significantly drag down the whole economy The problem throughout most of the cities in the US is when money was rolling in , governments were very generous with benefits and pensions. but now the money has dried up and cities have legal obligations to pay up, or they will have to renegotiate contracts or file for bankruptcy. The problems are worse in areas where there have been a large number of foreclosures, a decline in property values combined with unemployment. It's a recipe for a city to go bankrupt. While the plight of city bankruptcies is getting more attention, the problem is actually systemic in state governments and at the federal level as well.
BANKRUPTCY FOR STATES QUIETLY STUDIED http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html?_r=2&src=busln Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers. Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign...
Now if someone can get a Fed. Judge to allow cities to collect fines on dilapidated Bank Owned properties, they'll be all set!