American Cities Going Bankrupt
by Stephen Lendman
July 19, 2012
In past decades, many US municipalities declared bankruptcy. Since 1981, 42 cases were filed. Ten came in the past four years.
Given hard times getting harder, what’s happening now is unprecedented since the Great Depression.
Cities occasionally declare bankruptcy. In America, they’re coming more often. Others in dire financial straits may follow.
San Bernardino, CA is the latest. On July 11, The New York Times headlined “Third City In California Votes to Seek Bankruptcy,” saying:
Officials have no choice. They can’t meet payroll obligations through summer.
“Faced with a budget shortfall of $45 million and city coffers that have already been drained, the San Bernardino City Council voted on Tuesday to file for bankruptcy.”
Interim city manager Andrea Travis-Miller said:
“I am concerned about our ability to make payroll, not only in the next 30 days but also in the next 60 to 90 days. A major restructuring of this organization is needed.”
California cities have two Chapter 9 bankruptcy options. They can either hire a third-party mediator to negotiate with unions and creditors or declare a fiscal emergency.