The Illinois Comptroller’s April report  is scary reading.  The state is $4.5 billion in arrears on payments to vendors and others (like school districts and service providers) with no end in sight.  The Comptroller expects 2011 to be worse.  The following chart from the report looks to me like a deteriorating structural imbalance moving towards a delicate liquidity [...]

fiscal emergency, fiscal stress, state and local politics, states

An article about upstate New York town of Kingston and their discussion of fiscal stress, union contracts and the debate over Chapter 9 bankruptcy.

Chapter 9, fiscal stress, municipal bankruptcy

I just came across this blog from John Moorlach, Orange County.  Scroll down for a “five year lookback” on the discussion about San Diego, thought you might find it of interest.

fiscal stress, municipal bankruptcy

The financial reform proposals, designed to eliminate systemic risk, could actually trigger another meltdown upon the bill’s passage.  This is due to the ratings notching approach that has given rating credit to government support since the meltdown.  A change in the expectation of support – both emergency and on-going would result in ratings downgrades for [...]

fiscal emergency, fiscal stress, municipal bonds, ratings

I am adding a link to this article that updates Toledo’s fiscal situation.  (See prior post.)  The city is wrestling with a budget gap and trying to negotiate with unions over compensation.  Ohio is a state that has a fiscal emergency program and municipalities may not file for bankruptcy without going through the state.  The state’s [...]

fiscal emergency, fiscal stress, municipal bankruptcy, Ohio, Toledo

The tables below are for contextual reference as state and local governments face draconian spending cuts.   The combination of public policy with the several bubble periods over the last twenty-five years has created a toxic brew.  Some state and local governments are valiantly trying to tackle the issues while other legislatures and councils are more interested in [...]

fiscal stress, municipal bonds, Nevada, state and local politics, states

Here is an interesting clip from MLive about the debate over Flint’s dire finances.   Michigan has a receivership program that has been used a number of times so municipalities cannot just file bankruptcy in federal court without going through the state.  The article poses the sensible, if painful and difficult, questions of concessions on salaries and benefits [...]

Chapter 9, fiscal stress, municipal bankruptcy

Looks like the city is making its best effort to try to resolve budget imbalance.  Ohio is one of the states that has a strong oversight/receivership program and municipalities may not file bankruptcy without approval of the state.  Local governments there do rely on income taxes, which is tough in the current economy, especially in [...]

Chapter 9, fiscal stress, municipal bankruptcy, municipal bond default

Harrisburg, Pennsylvania can’t really afford to pay for the Resource Recovery bonds that it guaranteed.  Their recently adopted 2010 budget does not include debt service for this guarantee (see prior post with link).  It is accepted practice for rating agencies to rate municipally (or state) guaranteed debt off the credit of the guarantor.  Unlike bond [...]

Chapter 9, fiscal stress, municipal bankruptcy, municipal bond default, state and local politics

This link from a recent release by the Brookings Institution, Robert Puentes comments on the New Jersey and Virgina transportation funds.  New Jersey’ transportation trust fund will be spending all of its revenues on debt service by 2011; Virginia’s new governor too, suffers lack of funds for infrastructure improvements.  Concerning gas tax as a mechanism [...]

fiscal stress, gas tax, municipal bonds, transportation