Skip to comments.Bankruptcy filings by California cities may spread
Posted on 10/22/2012 2:41:40 PM PDT by SmithL
So far this year, three California cities have filed for bankruptcy protection, and it's likely they will be joined by at least a few others in the not-too-distant future.
That's not merely journalistic speculation. Moody's Investment Service, which closely monitors state and local governments for the huge municipal bond industry, issued an unusual public warning the other day that other California cities may be headed down the same path.
"To summarize," Moody's said, "we expect more bankruptcy filings and bond defaults among California cities, reflecting the increased risk to bondholders as investors are asked to contribute to plans for closing budget gaps."
Moody's named a number of cities whose fiscal health it will review and implied that some sort of blanket downgrading of local municipal bond issues may result a step that could slam the brakes on governmental borrowing.
Moreover, the distress is not confined to cities, since dozens of school districts are already on state fiscal watch lists and one, Inglewood Unified, was just placed under direct state supervision as a condition of an emergency loan to stave off insolvency.
Each city or school district in bankruptcy or flirting with insolvency is a different case, of course. The city of Mammoth Lakes, for instance, filed for bankruptcy after losing a huge lawsuit over a development project.
But Mammoth Lakes aside, there are also common factors, including a sluggish economy, the state's seizure of redevelopment funds on which many cities had become irresponsibly dependent, overly ambitious spending (and borrowing) for civic improvements, and unsustainable pay and benefit packages for employees.
(Excerpt) Read more at sacbee.com ...
Here’s the thing...at the end of this mess...is fewer services...fewer cops...fewer fire trucks...fewer potholes being fixed. Eventually, business operations will figure out the swing of the state, and relocate to Arizona or Nevada.
“Look to the year 2014. That’s when the big bomb drops. That big bomb is Los Angeles.”
From the replys to the article. I am hearing the same thing. They are trying to hang on until Villagrosa(sp) is out of office.
Geez, ya think??
Amazingly when a state is hostile to business, they get fewer of them and fewer jobs and lower tax collection.
Liberals can’t figure out how that works
No on all the parcel taxes and
No to all the Props that seek to perpetuate this madness called ‘California gubamint’ where ya elect representatives who in turn make the people have to do all their work via initiatives and referendums.. Hiram would be Proud..
No to all props that raise taxes for the children which really fund left wing unions.
No on Prop 31 which will enable the tax and spend cities/counties to spread their debt to nearby counties/cities.
Stockton built a new city hall so opulent they couldn’t afford to even MOVE INTO it..! You should see the Marina —it’s like Bev Hills, or something.
If the state eventually declares bankruptcy, and they have to be run by the other 49, can we revoke their statehood status for a period of time so they are only considered a territory?
At least until they get some financially responsible people in charge?
Bye bye leftist 54 electoral votes.
This is originally from the McClatchey’s Sacramento Bee, the writer cites something from Common Cause and says this group could be linked to the “Koch Brothers or Karl Rove’ but forget to mention that Common Cause is funded by Soros.
Slanted Commie journalists.
“can we revoke their statehood status for a period of time so they are only considered a territory?”
We can. Dust off the Reconstruction statutes.
1. Declare California a state in insurrection.
2. Appoint a military governor along with necessary troops, investigators and judges to clean up the mess.
3. Strip the state of congressional representation.
4. Allow the state back into the Union only if it meets specific constitutional conditions.
“If the state eventually declares bankruptcy, and they have to be run by the other 49, can we revoke their statehood status for a period of time so they are only considered a territory?”
Be careful what you wish for. Territories typically don’t pay Federal taxes. They generally pay to the territory at the same rate they pay to the Federal government. So imagine whatever yahoo californication elected as territorial governor getting the amount of Federal revenue the U.S. currently gets.