Bankrupt Local Government
A Bankrupt Local Government is a financially distressed local government that is a bankrupt entity.
References
2016
- http://www.pewtrusts.org/en/research-and-analysis/reports/2016/09/state-strategies-to-detect-local-fiscal-distress
- QUOTE: .... As many states have learned, however, taking a hands-off approach to local government fiscal health can lead to costly surprises. Several localities have received nationwide attention because of bankruptcy filings in recent years, including Detroit; Jefferson County, Alabama; Stockton, California; and Central Falls, Rhode Island. In addition, the threat of default and possible bankruptcy is looming in Atlantic City, New Jersey. In the case of Detroit, the state of Michigan spent $195 million from its rainy day fund to help the Motor City exit bankruptcy.
In general, however, insolvencies remain relatively rare. Over the past 60 years, only 64 counties, cities, towns, and villages have filed for bankruptcy.7 That is in part by design: Twenty-one states do not allow local governments to file for bankruptcy, and several others place conditions on these filings.8
Although local government bankruptcies are not a widespread problem, many localities struggle to meet the needs of their residents. The concern, as Governing magazine put it, is “the ones on the edge — the ‘distressed cities’ … that likely will never declare bankruptcy but are nonetheless struggling to become economically viable again.”9 There are myriad examples of municipalities and counties in serious enough fiscal distress to erode critical services and hamper the community’s ability to thrive.
- QUOTE: .... As many states have learned, however, taking a hands-off approach to local government fiscal health can lead to costly surprises. Several localities have received nationwide attention because of bankruptcy filings in recent years, including Detroit; Jefferson County, Alabama; Stockton, California; and Central Falls, Rhode Island. In addition, the threat of default and possible bankruptcy is looming in Atlantic City, New Jersey. In the case of Detroit, the state of Michigan spent $195 million from its rainy day fund to help the Motor City exit bankruptcy.
2014
- Liz Farmer, “Bankrupt Cities? What About Distressed Cities?” Governing magazine, March 2014, http://www.governing.com/finance101/gov-bankrupt-cities-overshadow-distressed.html.
2013
- The Pew Charitable Trusts, The State Role in Local Government Financial Distress (July 2013), http://www.pewtrusts.org/en/research-and-analysis/reports/2013/07/23/the-state-role-in-local-government-financial-distress.