Posted on 02/04/2010 9:45:28 AM PST by blam
It Begins: Cash Strapped Cities Begin To Crumble
John Carney
Feb. 4, 2010, 10:25 AM
Our nascent economic recovery may come too late to save many American cities from bankruptcy, which in turn will deal heavy losses to municipal bond investors and the companies that insure munis.
The latest fright comes from Harrisburg, the capital of Pennsylvania. The city is considering seeking bankruptcy protection—as well as tax hikes and asset sales—to address $68 million in debt service payments due this year.
Harrisburg does not stand a chance at making its payments. The $68 million in debt service payments is four times what the city expects to raise through property taxes and $4 million more than the city’s entire operating budget.
Ironically, the debt burden that is trashing Harrisburg was incurred to build a waste incinerator.
Bloomberg reports:
[snip]
(Excerpt) Read more at businessinsider.com ...
I was there in Sep and on a Saturday I was the only one driving on the road around the city...all deserted. Spooky.
Harrisburg does not stand a chance at making its payments. The $68 million in debt service payments is four times what the city expects to raise through property taxes and $4 million more than the city’s entire operating budget.
The article doesn't even tell you that teachers and state public employee salaries and pensions were the biggest cause of the meltdown.
I thought the same thing. It defined a massive problem, but the reporter and editor just couldn't bring themselves to tell the truth about what caused all of this in the first place. Their research (if they did it completely) would have pointed straight to out of control spending on schools (teacher pay and pensions).
Why is it ironic that the bankrupting factor was a waste incinerator? Because “government waste” has the same word in it as “waste incinerator”? Reaching a bit here?
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