Stockton, CA: Judge clears way for city to file for bankruptcy protection, April 1, 2013.
A judge accepted the California city of Stockton's bankruptcy application on Monday, making it the most populous city in the nation to enter bankruptcy.Stockton, CA: goes to bankruptcy court Monday (this Monday, next? does it matter?). California's 13th largest city; more than a billion dollars in debt. Every city employee-retiree was given health for life and for one dependent. Will be the country's largest city to "successfully" enter bankruptcy. First made the list about a year ago. March 27, 2013.
Chicago, IL: I think this says it all -- as being reported by CBS Chicago:
“I don’t see any Caucasians being moved, bussed, or murdered in the streets as they travel along gang lines, or stand on the steps of a CPS school,” said activist Wendy Matil Pearson as opponents of the school closing plans protested outside Horatio May Elementary Community Academy in the Austin neighborhood.What does "Caucasians not getting murdered" have to do with school closings?
Chicago, IL: buzz on the street; 50 Chicago schools slated for closure; March 21, 2013. Update, March 22, 2013: President Obama must have told the mayor, "You are on your own on this one. No money from Washington. Sorry, buddy. But, hey, we're still sending money to the Palestinians. Heh-heh-heh."
San Bernardino, CA: is this crazy or what? Pleading for bankruptcy protections; votes to increase pay of public employees:
The bankrupt city of San Bernardino, California, approved over $1 million in payincreases for police and firefighters despite claims it canbarely make payroll, let alone afford the salary hikes.
Monday night's pay increases, for a city that appears before a federal judge again this week to plead for bankruptcy protection, are a result of its charter. It mandates that pay for safety workers must be tied to salary levels for 10 similar- sized California cities, all of which are wealthier than San Bernardino. March 19, 2013Detroit, MI: the new financial overseer, a bankruptcy lawyer, tells Detroit unions "don't force me to go to a bankruptcy judge: you won't like it. We will do better if we work together."
Detroit is saddled with a $327 million budget deficit and more than $14 billion in long-term debt - a morass that developed slowly during the decline of the auto industry, the exodus of a quarter million people from 2000 to 2010 and outright mismanagement at City Hall.
At the height of its manufacturing boom, in 1950, Detroit was home to 1.8 million people. The 2010 census put the population at 713,000. Some estimates now place it below 700,000. [$14 billion/700,000 = $20,000/person; or about $100,000 per four-person household. Of course that still leaves the deficit and daily operating costs to run the city.]Detroit, MI: governor appoints bankruptcy attorney as financial overseer of Detroit; the attorney says the city's issue can be resolved in 6 weeks if all parties cooperate. I hope he has several body guards. WSJ is reporting. March 14, 2013.
Detroit, MI: in the last update below, we were told that Detroit's debt was $14 billion. It is now being reported there is an additional $7.2 billion that was never counted nor tallied. This is just a story of an audit by a state-sponsored review team; it does not update any information on who is now in charge of the city or what the next step is. The state is on the hook for a huge bill. March 12, 2013.
Atlanta, GA: "Detroit of the South," as Atlanta's suburbs leave Atlanta. March 10, 2013.
Detroit, MI: two weeks. Where have we heard that before? Within two weeks decision to be made: state-appointed manager vs bankruptcy. Now, debt is $14 billion. ($12 billion back on December 22, 2011). February 26, 2013.
Detroit, MI: one last mayoral presentation before being taken over by the state; if new city financial manager hired opts for bankruptcy, it would be the biggest ever Chapter 9 municipal bankruptcy in the United States, February 18, 2013 (linked story published February 13, 2013).
Baltimore, MD: $750 million budget shortfall over next ten years, February 18, 2013.
Detroit, MI: nothing new; just some "fluff"; from CNBC; January 30, 2013.
Philadelphia, PA: the city may close 37 schools at the end of the 2012 - 2013 school year.
San Bernardino, CA: the city paid out $2 million in "cash-outs"during the three months just prior to declaring bankruptcy; likely to have broken federal laws; clawbacks possible; December 21, 2012
Detroit, MI: state laying ground for managed bankruptcy. Lessons learned from the 29-day GM bankruptcy.
Detroit, MI: how bad is it? Yes, it's that bad.
Detroit, MI: state government considering dissolving Detroit and letting Wayne County absorb it (wow, something tells me Wayne County would not want it), November 28, 2012.
San Bernardino, CA: votes to cut $26 million from the city's budget. Major austerity program isn't going over well in at least one councilman's mind; facing a $45 million budget shortfall. If the city goes bankrupt, the city will be "taken over" by the county. And that would be bad? November 27, 2012.
Detroit, MI: things may be coming to a head. Detroit may have to use unpaid leave to cover cash shortfall:
Detroit plans to put workers on unpaid leave starting January 1 to prevent the city from running out of money if the city council continues to balk at reform measures and the state of Michigan blocks the release of much-needed funds.
The furloughs and other cost-cutting measures outlined by Mayor Dave Bing and top city officials on Wednesday are meant to offset $30 million that Michigan is withholding from the city unless certain conditions are met.Arizona cities in general: see first comment. A "temporary" sales tax is set to "sunset" in 2013; there was a proposition to extend the "temporary" sales in the 2012 election; it was defeated by a margin of 2 - 1. A sales tax is most regressive. November 20, 2012.
Detroit, MI: city rejects conditions for cash infusion, November 20, 2012.
Detroit will not get a much-needed $10 million after the city council rejected on Tuesday a contract to hire a law firm that was part of a deal to help the city overhaul its finances.
The state of Michigan and its biggest city, Detroit, announced a deal last week that includes several milestones the city must achieve in the next month to receive the $10 million by Tuesday and another $20 million by December 14.
In a voice vote, the city council rejected a contract for the law firm...the city ran out of cash several months ago...Los Angeles, CA: shortfall remains at $215 million; mayor looking to put pension initiative on next year's ballot; union plans to be disruptful; it's all about the unions; Los Angeles was first city identified on this post (see below); then it was $204 million; now it is $215 million. As you scroll through the list, see how many times the word "union" shows up. November 17, 2012.
Atwood, CA: up next could be the city of Atwater, where civic leaders will vote Wednesday night on declaring a fiscal emergency, considered by many to be the first step toward bankruptcy. The city may lay off a quarter of the town's 90-person workforce. The city is reportedly facing $95 million in outstanding debt and a current deficit topping $3 million: $3,500 of debt for each of Atwater's 28,000 residents, a city where the estimated media household income is around $40,000. October 3, 2012.
Mammoth Lakes, CA: some cities in California are bankrupt, not because of unions and pensions, but because of huge payouts to plaintiffs in lawsuits over land use (denial of big box stores to build; banning oil companies from drilling). September 9, 2012.
San Bernardino: bankrupt; can't pass budget; firemen's union deal breaker; when the money runs out, the money runs out. September 5, 2012.
Chicago, IL: is it just me, or does it seem that Chicago is beginning to implode? Murders seem to have gotten out of hand; even by Detroit's standard, murders in Chicago seem out of control. And then there's the impending school teachers' strike, right at the beginning of the school year.
Flint City, MI: the Flint City Council is seeking a court injunction to stop the state's appointment of a new emergency financial manager. The manager says he will continue work until/unless a judge orders an injunction. Either way, the writing is on the wall. Citizens will be able to vote on a ballot measure regarding emergency financial managers this fall. August 28, 2012.
Los Angeles: this was the first city ever posted on this site; it comes up again. Incredibly the article does not provide details of the extent of the deficit. The unions are ready to fight.
Despite years of raising fees, slashing the city workforce and cutting back on everything from swimming pools to sidewalk repairs, Los Angeles officials warn that the city's budget shortfall could top a quarter of a billion dollars next year without additional tax hikes and belt-tightening.Buffett: exits the municipal bond market; sees defaults coming. August 21, 2012.
The city's so-called documentary transfer tax would increase to $9 for every $1,000 of the property's sale value, or $4,500 on a $500,000 home.
The tax increase would generate an estimated $100 million for the city. It would give Los Angeles the highest such tax in the region, far surpassing the 55-cents-per-$1,000 rate charged in Glendale, West Hollywood, Burbank and Beverly Hills. [WOW!]
For months, analysts and elected officials have been signaling that both tax increases and an overhaul of the employee pension system will be needed to keep the city afloat.
El Monte, CA: on the brink.
Compton, CA: #4.
San Bernardino, CA: first time on the list. Files for bankruptcy protection. July 11, 2012.
Scranton, PA: broke. July 10, 2012.
Stockton, CA: how Stockton went broke, July 8, 2012.
Stockton, CA: files; largest city in US history to declare bankruptcy. June 29, 2012.
Stockton, CA: one step closer. June 26, 2012.
North Las Vegas: declared disaster zone; insolvent; will suspend contracts, pensions, pending review; the unions are a big part of the problem, but it looks like there is blame enough to go around to more than just the unions. June 22, 2012.
North Las Vegas: first time to make the list -- and it appears to be debuting at #1 in terms of how soon it could declare insolvency. Again, the unions. June 9, 2012.
North Las Vegas, the fastest-growing large city in the U.S. just five years ago, hasn’t shared in the bounty. Nevada’s third-largest city, whose population more than doubled to 217,482 in 2010 from 1999, is on the verge of insolvency. Facing a $33 million budget gap, elected leaders last week declared a state of emergency and gave the city manager unprecedented powers to suspend union contracts.
But not everyone agrees:
The city fell victim to its own shortsightedness, said Jeff Hurley, president of North Las Vegas Firefighters Local 1607, one of the unions that rejected the city’s latest demands for contract concessions and is challenging the assertion of emergency powers.Detroit, MI: one week. How often do we see these "deadlines" come and go? June 8, 2012.
Stockton, CA: one step closer to bankruptcy. June 7, 2012.
The city of Stockton moved a step closer to becoming the nation's largest city to declare bankruptcy, authorizing the city manager to file for Chapter 9 protection from creditors.$27 million in debt as of July 1; population 290,000 (did I do the math correctly: $93/person? Even a six-person family this debt would be less than $600). From an earlier article: 70% of the budget goes to pensions.
A 6-1 vote after a tense 4 1/2-hour public meeting Tuesday directed City Manager Bob Deis to file if the current mediation process fails. On March 27, Stockton stopped payments to creditors and entered a confidential mediation process under AB 506, a California law designed to slow municipal bankruptcies by forcing all parties to the table.
San Diego, CA: back from the brink; balanced budget and perhaps surplus going forward. Good for them. April 12, 2012.
Los Angeles, CA: Los Angeles' top budget official raised the specter of bankruptcy on Friday in a sweeping report in which he called for new taxes, major pension reform and possibly layoffs.
Rising employee costs combined with flat-lining revenues have left the city in a precarious position. Even after reducing its workforce by 4,900 positions in recent years, the city faces a $222-million budget shortfall, a number that is expected to rise to $427 million by 2014-15. April 6, 2012.
Detroit, MI: The Detroit City Council passed a financial consent agreement Wednesday evening with a 5-4 vote, which grants the city the power to void contracts and slash costs but not provide state funding or loans to bail the city out of its financial problems. Void/rewrite pensions? April 4, 2012.
Detroit, MI: Will run out of cash next month. City council expected to vote today on austere measures; if unable to solve problem, the state can take over. New city manager has free rein on all city expenses including pensions and contracts. April 2, 2012.
Harrisburg, PA: broke. Will skip two debt payments. March 11, 2012.
Pennsylvania's distressed capital city, Harrisburg, will skip $5.3 million of debt payments due next week, the first time the city has defaulted on its general obligation bonds, to ensure there is enough cash to fund vital services.Stockton, CA: three months and counting. The city is already "dead." March 11, 2012.
Pennsylvania's capital of 50,000 people is mired in $326 million of debt due to the expensive retrofits and repairs of its troubled trash incinerator.
Stockton, CA: largest city in the nation to date ready to announce bankruptcy proceedings. The article does not explain the finances, but a comment says 70% of the city's expenses go to retirement costs. February 29, 2012.
Los Angeles: $72 million in debt. Now another $2 million in debt evicting Occupy Wall Street. December 23, 2011.
Detroit: much worse than expected. December 22, 2011.
The report pegged the city's long-term debt, including unfunded pension liabilities, at more than $12 billion. That's $2 billion higher than Dillon's estimate when he asked for the preliminary review earlier this month.Santa Ana: $30 million deficit; $300,000 in reserves; jettisoning jobs by the dozens to keep its head above water; last year the city paid out $11 million for employee pension costs. And the Democratic governor is demanding that unions pay more. Hmmm.
In 2010, the city had net assets worth $265.1 million and long-term debts of $8.6 billion, according to the report and Treasury officials. This year, the value of the city's net assets is a negative number, and its long-term debt exceeds $12.3 billion.
Last year, Detroit had $33 of long-term debt for every $1 of net assets. That number compares unfavorably to even financially distressed cities such as Flint -- already under an emergency manager -- which has only about 59 cents in long-term debt for every $1 of net assets.
Detroit: worse than expected -- without draconian steps now, could run out of cash April, 2012; mayor says assumptions allow to April, 2012, but, in fact, likely to run out of cash by December, 201l. November 17, 2011.
Detroit: likely to run out of cash next year. November 3, 2011. A year from now. Give me a break; that's an eternity for these stories; the can will keep getting kicked down the road as long as city leaders are being paid.
Many cities: draconian cuts. September 27, 2011.
In Cleveland, the school board was to vote Tuesday night on whether to lay off teachers for the second time this year. The school district says it would have to find more than $10 million in cuts to help balance its budget and save the jobs of more than 300 teachers.New Orleans, LA: 1,300 of 1,900 jobs at one manufacturing job supporting will be lost due to end of space shuttle program. For New Orleans, a loss of 1,300 jobs is not trivial. August 2, 2011.
This past summer, the city laid off 319 employees, including 81 police officers.
Central Falls, RI: filed for bankruptcy. Smallest city in smallest state. Annual budget, $17 million; debt: $80 million. Due to pensions and health care costs. Sounds like state employees kept getting better and better deals over the years. This town has been on the list since December, 2010. August 1, 2011. Update: city will pay bondholders first (state law); will guarantee only $10,000 to retired policemen, firemen, other pensioners. August 13, 2011. [Update, April 27, 2012 -- the city could be out of bankruptcy in three months.]
Detroit, MI: $155 million budget deficit and a dwindling population. City will ration resources; giving resources to neighborhoods likely to survive; letting others die. Talk about a dwindling population:
Detroit's population of about 713,000 is down about 200,000 from 10 years ago, according to U.S. Census figures, and has fallen more than 1 million since 1950. Some areas have fewer occupied homes than vacant ones.Birmingham, Jefferson County, AL: getting ready to file for bankruptcy; $3 billion in debt. July 26, 2011.
Chicago, IL: Mayor Emanuel lays off number of union employees; many are seasonal workers. Unions failed to negotiate. July 15, 2011.
Central Falls, RI: Nearing bankruptcy! July 11, 2011 --
Central Falls, one of New England’s most distressed cities, is on the cusp of filing for bankruptcy protection - a relatively rare step for municipalities even in tough financial times. Since 1980, only about 46 cities or towns in the United States have sought such protection, according to James Spiotto, an attorney in Chicago who is an expert in municipal bankruptcies.
Last year, the state took over Central Falls - a city of 19,000 residents with an unadjusted unemployment rate of 15 percent - stripping the mayor of his keys to City Hall and the rest of his authority. That move came after every teacher was fired at the underperforming high school, with most of them rehired later. [Okay.]
South Bend, Indiana: Number 8 in Newsweek's list of the top ten "dying cities" in the US.As state officials try to dig Central Fall out of its financial hole, negotiations are ongoing with labor unions and retirees and cuts are being sought from every corner of the budget. Without major concessions, bankruptcy is a very real possibility. Bankruptcy can take a toll on a city’s reputation and put stress on neighboring communities, which might have to step in to provide services.
It looks like it's all about pensions and health care.
In June 21, 2011, issue of the Wall Street Journal, William McGurn writes that "When the actual census figures came out a few weeks later, it turned out that the population drop was even more sever than the estimates." Further: "It's considered bad form to notice, but one problem might be that South Bend, like at least of its companions on the dying cities list, Detroit, hasn't had a Republican mayor for four decades. Yes, there are badly run Republican cities, and well-run Democratic ones. South Bend, however, is a classic Democratic city, with a classic Democratic approach to business. And it shows."Detroit, Michigan: City population has fallen to 1910's population; falling faster than expected. High taxes and failing schools. March 22, 2011.
Michigan: Governor ready to sign bill giving state emergency powers over cities and school districts facing bankruptcy. Unions will probably take case to state supreme court. March 13, 2011.
St. Louis, MO: population declines eight (8) percent. February 25, 2011.
Providence, RI: Every teacher in the city will receive a letter notifying that he/she will be dismissed effective following the last day of school. The city had a daunting $57 million budget deficit last year; expectations are it will be worse this year ending June 30. February 23, 2011.
Detroit, MI: The state orders Detroit to close half its public schools; will result in school classes going to sixty (60) students in a class. February 21, 2011.
San Francisco, CA: on the verge of bankruptcy; maybe not as soon as rest in this list, but huge debt issues; if around $300 million to $400 million in cuts to employee pension and health care costs are not achieved, the city could face bankruptcy as soon as five years from now. On top of this, Federal stimulus money must be running out. February 18, 2011.
Detroit, MI: May cut number of schools in half, from 142 to 72. January 17, 2011.
Camden, NJ: Cutting half their police force? Then, the very last paragraph, one finds out that the city bulked up its police force some years ago when they received federal funds. January 16, 2011.
Hamtramck, MI: Pleads for bankruptcy; state not ready to accept bankrupt plea. (Hamtramck is "surrounded" by Detroit.) December 28, 2010.
Prichard, AL: Bankrupt due to city pensions. December 23, 2010.
Central Falls, RI: City ready for receivership; $48 million in unfunded pension liability alone; population 19,000; state has poured $604 million into city's school system since 1991 and yet high school was rated one of six worse-performing schools in the state this past year. December 18, 2010.
Harrisburg, PA: Law firm to represent Harrisburg pro bono for Chapter 9 (bankruptcy) filing. Harrisburg has placed freeze on overtime pay for city employees. Harrisburg is being sued for $19 million for missing payments.
Las Vegas, NV: Deepest slide since the 1940s. I assume Nevadans will re-elect Senator Reid anyway. [They did.]
Harrisburg, PA: Bailout! One step closer to bankruptcy. As the stimulus money runs out, is this "the canary in the coal mine"?
Harrisburg, PA: Broke, defaults on bonds; tied to "green energy" facility. September 2, 2010.
Miami, FL: Broke. August 30, 2010.
Camden, NJ: Most impoverished city in the Garden State; will close all libraries; state cut the city's subsidy. August 6, 2010.
Philadelphia, PA: City begins rolling firehouse closures to balance the budget. August 2, 2010.
East St Louis, MO: Cops, firefighters furloughed; city defers $500,000 bond repayment. The money has run out. [I remember how "bad" this city was in the 1980's; I can only imagine how much worse it's gotten.] August 1, 2010.
Newark, NJ: Four-day-work week for city staff; city swimming pool closures; no toilet paper for city facilities. July 22, 2010.
Harrisburg, PA: Update -- it looks even worse now than in April; no progress; $250 million in debt; tied to "green energy" project. Pennsylvania governor offering advice. June 10, 2010.
Detroit, MI: Detroit demolishing homes; shrinking in size; replace homes with parks and farms. Farms inside city limits? May 14, 2010.
Harrisburg, PA: To consider declaring bankruptcy. May not be an option (legally). Huge debt tied to "green energy" project. April 27, 2010.
Los Angeles, CA: The budget crisis has closed 17 courts and may close another 50 courts in September if cash not found; could throw civil and family court into chaos. Actually, maybe lawsuit-crazy Angelinos deserve this.
Los Angeles, CA: Two months ago, the city's deficit was $204 million. The deficit as of today is now $222 million; council still has no plan in place. April 9, 2010.
Los Angeles, CA: The vultures are circling. April 6, 2010.
Detroit, MI: The city will close 44 of 172 public schools at the end of this school year. This comes on top of 29 schools that were closed last fall. March 17, 2010.
Kansas City, MO: city will close almost half its public schools at the end of the year to save money. March 11. 2010.
Detroit, MI: mayor has great idea; unfortunately he will be destroyed politically. February 25, 2010.
Harrisburg, PA: bankruptcy is on the table; $68 million in debt. February 4, 2010.
Phoenix, AZ: $241 million in the hole; new 2% tax on food will raise about $60 million. The tax will only be in effect for five (5) years. Yeah, right. (Note: for those who have forgotten Econ 101, ninth grade school subject, sales taxes are the most regressive kinds of taxes). February 4, 2010.
Los Angeles, CA: $204 million gap; refuses to cut union jobs after members pack council meeting. For those who may have forgotten. February 4, 2010.