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    Entries in bankruptcy (6)

    Friday
    Jan202017

    The Week in Public Finance: Hartford in Crisis, Pension Rates Move Down and More

    Bad News for Hartford, Conn.

    A report from the Yankee Institute this week warned Connecticut’s capital is careening toward insolvency. “Hartford will likely face bankruptcy unless the state intervenes in the coming months,” wrote Stephen Eide, a senior fellow at the Manhattan Institute who authored the report.

    Connecticut has repeatedly struggled with slow growth and state budget deficits, but that economic imbalance is even more exaggerated with its urban centers. The report warns that Bridgeport, Waterbury and New Haven also have declining tax bases and rising pension obligations -- just not to the extent that Hartford does.

    More than one-third of Hartford residents live in poverty, the highest rate in the nation in cities larger than 100,000. What's more, the city has increased its debt and structural budget deficit to stay afloat. Between 2016 and 2018, Hartford’s debt service expenses are projected to increase from $23 million to $45 million, and then reach $60 million in fiscal 2021.

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    Friday
    Dec092016

    The Week in Public Finance: Federal Budget Chaos, a Bankruptcy Win and Pension Portfolios

    BY  DECEMBER 9, 2016
    Chaos on Capitol Hill ... and in Statehouses

    As state lawmakers begin preparing for their fiscal 2018 budgets, their biggest challenge is in the unknown. With Donald Trump’s election, the future for key state and local funding is almost anybody’s guess.

    With Trump in the White House next year, Stan Collender, author of The Guide to The Federal Budget, predicts that a Republican-controlled Congress will move quickly on making major changes before the 2018 midterm elections. But after this unpredictable election, few are willing to predict what exactly those changes will be. All we know now is what’s on the table.

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    Tuesday
    Nov012016

    The Week in Public Finance: Petitioning for Bankruptcy, Lost Airbnb Revenue and Downgrading New Mexico

    BY  OCTOBER 28, 2016

    'Put Bankruptcy on the Ballot!'

    Activists in financially beleaguered Scranton, Pa., are petitioning for a ballot initiativethat would let residents decide if the city should file for bankruptcy. It’s a first-of-its-kind petition and reflects the ongoing frustrations of a city that's been "fiscally distressed" for two decades.

    Scranton is one of Pennsylvania’s Act 47 cities, which designates it as fiscally distressed and opens it up to aid and other resources from the state. The designation also means that the city must comply with certain fiscal requirements, such as developing a recovery plan.

    But Act 47 has had its problems, the biggest being that it doesn’t seem to provide enough oversight.

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    Thursday
    Aug252016

    The Story Behind San Bernardino’s Long Bankruptcy

    Unlike Detroit or Stockton, this California city’s insolvency can’t be blamed on debt or pensions.

    BY  AUGUST 25, 2016

    Four years ago this month, San Bernardino, Calif., filed for Chapter 9 protection. Today, it’s still in Chapter 9 -- the longest municipal bankruptcy in recent memory.

    Why so long? Many blame it on San Bernardino’s lengthy and convoluted charter, a document that gives so much authority to so many officials that it’s completely ineffective. “It gets everybody in everybody else’s business,” said City Manager Mark Scott. “And it keeps anybody from doing anything.”

    As a result, officials have spent the last two years trying to ensure the current charter is not part of the city’s future. A specially appointed committee is proposing to completely overhaul it.

    At issue is that unlike many California cities that either have a strong mayor/council form of management or a strong city manager government, San Bernardino’s is a hybrid, doling out authority to both sides. For example, fire and police chiefs are appointed by the mayor and subject to approval by the council, but report to both the mayor and city manager. This confusing structure played a role in the city’s road to insolvency. “You’d have to say,” Scott said, “the charter made it almost impossible to succeed.”

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    Thursday
    Jul142016

    Puerto Rico's Warning for States, Cities: You Might Be Next

    Gov. Alejandro Garcia Padilla said the island's rescue might simply be a harbinger of things to come on the mainland.
    BY  JULY 14, 2016

    President Obama recently signed into law a highly anticipated -- and much debated -- rescue bill for debt-laden Puerto Rico. While the bill has its detractors, it marks a positive step toward the promise of recovery for the island. But the bill's impact could go far beyond the commonwealth's shores.

    Puerto Rico, like states and many cities, can't legally declare bankruptcy. Saddled with $70 billion in debt, Gov. Alejandro Garcia Padilla's administration has spent the last few years unsuccessfully trying to reach an agreement with creditors. During that time, the commonwealth watched its tax base decline as residents fled stateside and Puerto Rican government entities defaulted on debt.

    That's what life without bankruptcy protection is like for governments, Padilla said this week in a speech at the Brookings Institution in Washington, D.C. He went on to suggest that Puerto Rico, with its smaller economy and population size, might simply be farther along on a path other U.S. governments are also traveling. "We are only ahead of the curve -- the curve that looms for many states and municipalities," he said. "We are forced to try the route that others have not tried before, to knock on the doors that others may need to approach in the not-so-distant future."

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