Municipal/Gov't Bankruptcies

[Joe Common]

There are three local governments considering filing bankruptcy in 2008, and one already filed, so far as I know; but I would appreciate your help in learning of any others either considering bankruptcy or with large deficits.

The three considering it are Jefferson Co., AL; City of McCall, ID; and the City of Vallejo, CA. Gould, AR filed for bankruptcy within the last week or so. Also considering it is West Contra Costa Unified School District, CA.

News agencies are slow to report major deficits, and I believe there are more local gov't entities in trouble than we know. I also think it's going to get worse, as property values are declining and property taxes are not following suit. Governments just keep on plowing ahead with 5-12% increases in spending each and every year. With the housing crisis, their heads are in the sand.

Duluth, MN is an excellent example. They have $300 million of unfunded retiree benefits, a per capita debt greater than any of the cities/county named above, yet they just keep spending. This while their school district is looking at over $400 million in building projects in the next few years.

I'd like to know what's going on with deficit spending in other parts of the country, as I'm intending to write an article on it very soon. Thanks for your help!

[jda303]

Here is a thread I've been maintaining regarding large corporate (chapter 11) and municipal bankruptcies (chapter 9). I have a lot of access to this type of info, so if you need anything else, let me know.

http://www.rr-bb.com/showthread.php?t=35617

[sherrimae]

I live in Jefferson County, Alabama, and there is probably a 100% chance that the county will go bankrupt soon. Several current and former county commissioners and their cronies are under criminal investigation for their actions in getting the county into this mess. Jefferson County can't even make the interest payments due, let alone pay back all the money that was borrowed. There are going to be some people going to prison over this, as they should. The current commissioners aren't much better, and can't agree on what to do.

We are moving out of the county this summer, and it's probably not a moment too soon. There is already a lot of talk about raising taxes.

[Joe Common]

Despite jda's post above, I am interested in learning about gov't entities with financial problems. Please add your posts. Thanks!

[Joe Common]

Late last night, the City of Vallejo approved filing for bankruptcy. The blame was placed largely on union city employees unwilling to renegotiate salary/benefits contracts written when the economy and tax collections appeared to have no end to the upside.

I believe the Vallejo action is the first of many.

http://www.timesheraldonline.com/todaysnews/ci_9177891